Streaming game services to hit $400M in 2014

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.

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.