The rapid growth of artificial intelligence and the expansion of cloud computing infrastructure may transform the future of the video game industry. According to a new research report, the cloud gaming market will reach a value of $38 billion by 2035; a shift that could gradually displace home game consoles from their current position in the market.
New research from Bloomberg Intelligence shows that the expansion of AI data centers and the development of cloud computing technologies pave the way for significant growth in online game streaming services. This shift could, in the long term, substantially reduce users' need to buy dedicated game consoles.
According to the report prepared by Nathan Naidu, an analyst at Bloomberg Intelligence, increased use of AI data centers and cloud infrastructure expands users' access to cloud gaming services worldwide while also improving the economics of providing these services.
Meanwhile, AI will play a dual role in the future of the gaming industry. On one hand, this technology can reduce the costs of delivering services and on the other, strengthen the infrastructure required to run games over the internet.
Another factor affecting the growth of this market will be the expansion of advertising-based revenue models. It is predicted that advertising will become one of the main drivers of cloud gaming service development from the beginning of the next decade, enabling a wider range of users, especially in emerging markets, to access these services.
Will home consoles become a niche market?
The findings of this research indicate that with the expansion of cloud gaming, home consoles may gradually lose their position as one of the main products in the video game market and become products for a more limited group of users.
One reason for this prediction is the increasing complexity of video games through the use of AI. As games become more advanced, the need for higher processing power also increases; an issue that could make the development and release of new hardware generations more challenging.
In such circumstances, running games on powerful data center servers and streaming their video over the internet may be a more efficient solution than designing and releasing entirely new consoles every few years.
This change could affect the traditional model of the gaming industry, which has largely relied on selling dedicated hardware and releasing new console generations.
Sony and Nintendo versus the cloud gaming revolution
According to the report, major gaming companies are not equally positioned to face such a transformation.
Nintendo, the Japanese game console maker, has so far considered cloud game streaming only a minor part of its business strategy. For this reason, the company may face greater challenges adapting to a market that is moving toward cloud services.
In contrast, Sony is expected to be better positioned due to its more advanced cloud gaming and remote access infrastructure.
The PlayStation Plus service and the PlayStation Portal device, which enable remote access to games, are among the advantages that can help Sony adapt to future market changes.
These predictions are made while Bloomberg Intelligence's research suggests that the expansion of AI and cloud computing could change the structure of the video game market in coming years; so that access to games over the internet gradually becomes more important than owning dedicated hardware.
However, the report does not speak of the definitive elimination of home consoles, but rather outlines a future in which these devices may no longer be ubiquitous consumer products.