Streaming game services to hit $400M in 2014

Screen Digest report predicts slow start for services like OnLive, Gaikai; gamers won't have reason to sign up until next generation of consoles forces upgrade expenses.

Earlier this month, game streaming service OnLive dropped its monthly subscription fee plan, making the service that much more attractive to PC gamers who want to play the latest titles but don't have high-powered hardware. But even without a surcharge, market research firm Screen Digest predicts it will be a few years before OnLive--and competing services like Gaikai--will take off in any appreciable way.

Getting streaming services to work on more than just PCs will be key to their success, according to Screen Digest.

A new report from Screen Digest predicts that streaming game services will bring in $332 million in North American revenue in 2014, with Western Europe accounting for an additional $79 million. However, those totals are predicated on game streaming services surviving some lean times in the interim.

The firm believes that gamers' buying habits won't shift in the short term or the medium term or until the value proposition improves. According to Screen Digest, gamers in the West already have PCs and consoles capable of playing the latest titles. As a result, people won't have reasons to turn to streaming services until a new generation of games forces them to invest in expensive hardware upgrades, making streaming services a cost-effective alternative.

"On a stand-alone basis, it looks as though [streaming game] services will have a tough time initially," said report author Ed Barton. "Key to their future potential will be territorial expansion and broadening the target platforms away from the PC into connected TVs, set top boxes, mobile platforms and possibly games consoles."

The appeal of game streaming services is that they allow gamers to play graphics-intensive games in high definition on virtually any PC or Mac without the need for a high-end graphics card. The first such service to launch, OnLive accomplishes this by streaming the games from various server farms all over the nation, which do the heavy lifting in terms of graphics. A small, Roku-like Microconsole is also planned for release that will give the same functionality to any television it is hooked up to--provided the owner has an Internet connection over 3Mbps (5Mbps is recommended). The service has also recently entered a Wi-Fi beta, with a smartphone version also in development.

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Discussion

41 comments
slyhawke
slyhawke

On the topic of 'owning the game', I own all three current consoles and a nice computer (granted its busted right now :() and I just don't think I could say I 'own' all of my games. I do have the box, the disk and possibly a single player experience, but the second I want to play online, get a patch, or download additional content, I'm relying on my internet connection and the digital distribution services to get me there. Registering is another major thing thats restricting just how much you 'own' a physical disk. My Splinter Cell: Conviction won't even start up for me until it verifies with the Ubisoft servers that I can. Steam, PSN, Xbox Live are all forms of digital regulation and distribution that have been widely accepted. However, you lose quite a bit of those games you 'own' if anything happens to them. Sure they are a little steadier then Onlive is now, but time will tell how stable it becomes. I remember Steam being the bane of most pc players out there. Luckily, they continued to improve and gamers continued to give them a chance. You may not like the idea of not having the physical copy for collectible or sentimental value and thats OK, just don't try and say that having that copy makes you immune to faulty services or unstable internet issues.

robin1232
robin1232

@gamerpipe With the time it takes to finish some games these days, it seems to me like a waste of money to actually purchase games. On Onlive, you can rent them for 5 days, which will cost you around $8 and renting it twice will be enough for finishing most modern games.

robin1232
robin1232

I love Onlive, since they have their Wifi beta my connection is fast enough to stream the stuff, from Europe! True, it's a bit slow sometimes, and it might take a couple of tries to connect, but everything that can make me play games on Mac OS-X is good.

Toysoldier34
Toysoldier34

@gamerpipe They have had some good deals on there. Currently I think lots of games are 33% off. Also, when Mafia 2 came out if you bought it within the first couple days then you got a voucher for another full game free. I don't know any other stores that have buy 1 get 1 free on brand new games. Though I don't buy from there much they do have a lot going for them. In the very least instant demos is pretty good and you can rent games.

Toysoldier34
Toysoldier34

@SolidTy Why are your comments always bold?

Toysoldier34
Toysoldier34

I like OnLive. I don't use it tons since I have a nice PC, but I would use the TV adapter and I use it on my laptops or on public computers that normally can't run games.

gamerpipe
gamerpipe

Just save some money and buy real console/PC and buy physical copies, if you don't want to pay $60 for a game, then just wait couple of months until prices drop or you find a used one. services like onlive sounds a waste of time and money. unless they have monthly fee to play any game ,I don't see its worth vs risks.

UncleAnesthesia
UncleAnesthesia

Digital distribution is already here, and I like it, but I don't want a monthly rate to play games I don't own... The next step should just be a console with a big SSD and a solid Marketplace/PSN game purchasing setup. SSDs last for millions of hours and would out-survive discs and be cheaper once their price hits rock bottom in a couple of years. Hell, they could give you the entire game on a high-speed flash memory cartridge and it would - once again, in a few years - be cheaper than blurays.

fester420
fester420

I don't like the streaming idea, but I'm all for digital downloads. It would be nice to not have to get up every time I want to change the game I'm playing. Plus you don't have to worry about scratched discs and you own the content for life so if you delete it you can always redownload it.

optimus
optimus

XBOX LIVE or PLAYSTATION PLUS may someday simply be portals to games and both the live and psn stores would evolve. I can already buy full games on psn like warhawk or comic jumper on live arcade so it's not as big a jump from today to cloud based gaming where all you need do is connect and play. Yes everyone must get fiber and for a song but why create an xboxnext or ps4 when you could have a system the size of an asus o!play air which would be very portable and outside the game discs you couldn't tell the difference when playing. I'd be far happier if both ps+ and live still were by the year as i hate monthly fees where the $$$$$ would be isn't just in the stores online but selling you more storage in the clouds so you could access more games at any given time. The only downside would be if for whatever reason your internet crashed fade to black.........everything no netflix/hulu or gaming without a hdd backup or game media. Whether we want it or not the game industry does and we will be there soon count on it because xbla and psn have already gotten us used to digital content heck itunes anyone-does anyone still buy cd's-nuff said.

Sweendrix
Sweendrix

Personally, I think these services suck. Are you telling me that I don't get to own the game? I'll take a home console and everything that it offers any day of the week.

grasshopper6
grasshopper6

I like buying and having the game on media disc

rarson
rarson

The monthly subscription is not the problem for OnLive. Currently, there's a few things holding it back: 1. Lack of affordable bandwidth (and caps from providers even if they can handle it) 2. Lack of games on the service 3. Inconsistent video quality 4. Increased lag, even on high speed connections 5. Additional charges for games By far, the biggest problem right now is bandwidth, and it's going to take years before enough people have it and can make streaming games a significant distribution method. I know for a fact that a lot of people in the US are still on dial-up (and I feel really bad for those people).

leeko_link
leeko_link

It's a cool service and all but paying full price for games you don't own will one day bring regrets.

Ex-DarkBlade
Ex-DarkBlade

I wonder why I got thumbed down on the last comment?

Ex-DarkBlade
Ex-DarkBlade

They won't survive. It's matter of time before the big boys join cloud steaming game.

LindBergh2007
LindBergh2007

They don't even realize that SEGA will be rolling out a digital streaming console out next year. Set to be annouced at CES 2011. Besides On-live will never take off, the download idea will but Onlive won't.

DragonRift
DragonRift

I don't want my entire game library locked inside a service, because if you lose that service for whatever reason, there goes all the games you bought along with it. Like Ice_man_1985 said: Physical discs will always be preferred. It's nice to have something physically there after I buy it.

l777l
l777l

I hope the day when streaming/cloud services get (more) dominant are far away. It's probably the pinnacle of digital distribution and as such bad for consumers (ownership, control, price, collecting...) -- while there are some advantages.

daabulls23
daabulls23

It's a huge assumption that they will be in business for that long.

dipsetboy17
dipsetboy17

i like hard copies of my games. sure, there are exceptions to this like the down-loadable games on psn and xbox live that i bought, but the rest of my games are physical.

gameking92
gameking92

@ balintcsikos graphics don't make the game, they just enhance the experience. the first games (with when compared with todays graphics, really bad graphics) could be good too.

FinalKloud
FinalKloud

if they gave me every game from every console from the start of videogames up untill now, i would greatly consider it. But untill then i already own everything i wanna play.

balintcsikos
balintcsikos

If poeple won't buy new hardware then companies wouldn't have to produce them and research for better ==> entertainment companies couldn't make games with better graphics ==> less people will play games

mouthforbathory
mouthforbathory

These services sure do have their critics (I for one), but there are plenty of people who find this very attractive. Personally I am against cloud computing (which this promotes) on the lower level typical consumer basis. It has the ability to completely circumvent the conventional ideas of intellectual property and ownership which are important, not only for software ownership, but for things you yourself create. If you only have a remote terminal to access stuff that is yours/you created, then it blurs the line of who really owns the data or creation because it's not on your hardware. It also makes your data susceptible to attacks or theft. Online of course throws software/license ownership out the door and if your internet connection goes to ****, or if you have a data cap, then you're royally screwed. This is one reason why I pretty much always buy retail copies of games, even if they use SecuROM or Steamworks or whatever. I have the disc. The disc security could be hacked, and I still can play the game I payed full price for. As for actual game runtimes, I've heard that many of the games are not "maxed out" like expected, and 1080p isn't going to happen without huge amounts of bandwidth, hell no perfect stream without artifacts is going to happen...........and back to the ISP data caps lol.

salvucci91
salvucci91

I remember when this was first announce, and I was so pumped about it. But yep, I won't be signing up for a while; too many companies that aren't on the same page.

deadesa
deadesa

cheaper? Just cause 2 is 49.99 through onlive i got it for 39.99 new at gamestop. To me it seems most of the games run about the same price. PC games anyway, console games is a whole different animal.

bluefire1360
bluefire1360

I find it quite interesting, I would love to try out one of these services. I mean the games are cheaper, and I don't really care that much about owning the game physically if I can cut 20-30 bucks off the game price, and save thousands of dollars on future hardware to play the games.

deadesa
deadesa

No thank you, pay essentially full price for a game you don't even own? Call me old fashioned but I like to know I actually own the GAME rather than just the rights to play it when my Internet works

atopp399
atopp399

God they just won't let it die. Gamers are not going to want this crap. Just like 3D. It is a fad and will never become mainstream. A huge, huge portion of video game money comes from parents buying their kids games. This will never ever take over for that reason alone.

shadowkeeper05
shadowkeeper05

I've used Onlive since July and I'm extremely impressed. I would have gladly paid $15 a month to access their service, but now that its free its just icing on the cake. It runs perfectly on my crappy school laptop, which I plug into a 47" TV with a simple video cable, and hook up an xbox controller via USB. The experience is comparable to owning an Xbox and not having to pay for XBox live...I imagine it will only improve as game developers flock to the benefits of Streaming Providers

Barighm
Barighm

Can't say I disagree with them. If anything, I can see a lot of developers ditching their publishers so they can release their games directly through these services. Why allow a publisher to mainstream your game and take most of the profit-just so they can print the discs and game box-when you can avoid all of that and release just the digital game itself? I'm expecting the developers to make the decision for us. Wouldn't be the first time corporations forced everyone away from a reliable medium just to buy a new technology (VHS to DVD players). But hey, if I'm wrong, no biggie. I'd rather buy a PS4 anyway.

Zero5000X
Zero5000X

They need to pull a Netflix and work out deals to get it integrated into TVs, BD/DVD players, and other devices so that people don't have to buy the microconsole.

Trogeton
Trogeton

On pc??? what's the point.. most games people stream are console games

Lucky_Fetus
Lucky_Fetus

I wonder if it lags. If not it might be cool. You'll still have to subscribe to a lot of the top games anyways (SC2, etc.) cause you can't play without an account.