COVID-19 Pandemic Impact: A Drastic Increase in Online Services and Content Consumption Will Bolster Cloud Gaming Revenues to US$4.5 Billion by 2024

image
ABI Research whitepaper identifies the short-and long-term impacts the global pandemic will have on Video and Cloud Services
25 Mar 2020

The need for social distancing and sheltering in home during the COVID-19 pandemic could accelerate the adoption of cloud gaming services among new gamers who are looking for additional sources of entertainment, giving a bump to this market which has recently seen some lackluster launches and issues with content, reaffirming the original forecast of nearly US$4.5 billion in revenue by 2024 – so long as cloud gaming services can support a higher load of concurrent users and provide a good first impression, states global tech market advisory firm, ABI Research

“The impact of the COVID-19 has and will continue to take a toll on the global economy until it is contained. But not all markets are equally impacted, and the cloud services and content markets are a prime example,” says Michael Inouye, Principal Analyst at ABI Research.

Public events and gatherings, as in other markets, have been negatively impacted, with closures, delays, and reduced attendance. “As more of the public spends more time at home and indoors, the other component of the media and entertainment market in some areas is receiving a boost. School closures, for example, are giving a bump to video gaming and Over-the-Top (OTT) streaming. More broadly speaking, the more time people spend at home, the greater the importance of OTT streaming, video games, and social media in media and entertainment and maintaining social connections,” Inouye explains. “For non-gaming households starved for new content and entertainment, subscribing to a cloud gaming service is a good option to add a gaming platform without making significant investments into new gaming hardware.”

In the short term, while there are certainly manufacturing shortages and challenges, some aspects of the consumer electronics space, such as game consoles, have not experienced a significant impact to date and more importantly, the future launches of next-generation consoles are still planned for the end of 2020. “Problems with this launch, however, would certainly reduce the revenue expectations for retail and the console gaming market at large, but could offer a window for nascent cloud gaming services to generate additional exposure. Similarly, a protracted struggle to contain the virus will make it increasingly difficult for studios and content producers to produce and adhere to release schedules, disrupting the flow of content and potentially causing issues with services,” Inouye points out.

The longer-term will certainly yield more significant problems for all companies throughout the media and entertainment landscape. “Proactive protections, such as altering release windows and adapting pricing and business models have already started to happen. Services and operators should continue with these experiments, work on refining the business and pricing models, and once things return to a semblance of normalcy, evaluate the prospects of continuing to employ some of these initiatives - this applies to all services, but pay-TV in particular. Companies in the video industry are working to position pay-TV operators as cross-platform services, but operators need to better support customers who are accustomed to adding and dropping OTT services freely and extend this flexibility across the board in order to reduce churn and better serve as the future aggregation point for media and entertainment services,” Inouye recommends.

For a clearer picture of the current and future ramifications of COVID-19 across technologies and verticals, including  Video & Cloud Services, download the whitepaper Taking Stock of COVID-19: The Short- and Long-Term Ramifications on Technology and End Markets

About ABI Research

ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.

ABI Research 是一家全球性的技术情报公司,拥有得天独厚的优势,充当终端市场公司和技术解决方案提供商之间的桥梁,通过提供独家研究和专业性指导,推动成功的技术实施和提供经证明可吸引和留住客户的战略,无缝连接这两大主体。

For more information about ABI Research’s services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific, or visit www.abiresearch.com.

Contact ABI Research

Media Contacts

Americas: +1.516.624.2542
Europe: +44.(0).203.326.0142
Asia: +65 6950.5670

Related Service