Why cloud gaming isn't a market...

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[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & company founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s.]

We’re back! Did you enjoy our short holiday in the middle of last week, or were you too busy feeling guilty about the other 15 GameDiscoverCo newsletters you have stacked unread in your inbox? (We hear we do that to people - sorry, not sorry?)

Plenty to talk about, this time out. And we’ll start out with a look at why market definitions can sometimes be a bit of a mess, when it comes to overarching game industry trends…

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Why cloud gaming isn't a (single) market...

Sometimes, when we realize GameDiscoverCo could be considered a ‘research firm’, we shudder a little bit. Why? Because ‘hot market is big soon!’ reports are the most obvious - and perhaps the least helpful - stock in trade of some of these companies.

Sure, it does provide catchy headlines. But don’t you think most of these reports - on eSports, AI, and even cloud gaming, often get reduced to hype cycle-related ‘piece of paper you wave around in meetings to justify spend’, rather than real, qualitative research? We do. (Even those that do it more responsibly feel pressured to show big growth.)

And one of the most interesting aspects of ‘big buzzword’ trends is asking - is that market really a market? We think AI and metaverse are obvious examples of those right now. But cloud games has been on the ‘what really is it?’ radar for much longer.

So it was interesting to see UCL School Of Management faculty member Joost Rietveld submit a public comment [.PDF] to the UK’s Competition Authority over the Microsoft x Activision Blizzard merger investigation, entitled ‘Cloud Gaming Is Not A Distinct Market’. It pushes back on the CMA’s previous comments that “cloud gaming services should be considered as a distinct market to console and PC.”

We asked Joost about why he decided to do this, and he said: “Initially it looked like if the CMA was going to block the merger, it would be over concerns relating to the console space. The 'cloud gaming theory of harm' was always the weaker and more speculative amongst the agency's concerns. Thus, when the CMA announced it would drop its 'console gaming theory of harm' and narrow the scope of its investigation to cloud gaming, I felt it was time to get involved.”

How cloud gaming breaks down, submarket-wise…

And Rietveld does so, suggesting that “we cannot combine all cloud gaming services into a single, clearly defined market definition”, and providing the following sub-definitions:

• Cloud gaming as a feature:“Cloud streaming is offered as part of a consumer-facing distribution platform. It is included within a bigger bundle of services provided by the platform. Exemplar: Microsoft Game Pass.”

• Cloud gaming as a platform:“A platform provides a consumer-facing distribution platform on which all available games are streamed from the cloud. This is a standalone cloud gaming service. Exemplar: Amazon Luna.” 

• Cloud gaming as a complement: “A specialized cloud-streaming technology is offered to downstream consumers who adopt it to stream a subset of games they purchased elsewhere. Exemplar: NVIDIA GeForce Now.”

• Cloud gaming as an input:“A specialized business-to-business cloud streaming technology. It can be recombined or rebranded by downstream customers who present it as their own to their consumers. Exemplar: Ubitus.”

These are all complex, interacting business models, folks - hardly a monolithic ‘cloud gaming’ block that can be measured easily. We’re not saying that the CMA shouldn’t try to analyze this - they looked at PlayStation vs. Xbox cloud streaming in some detail.

But we suspect that the biggest growth of cloud gaming in the medium term is going to be ‘cloud gaming as a feature’, particularly for more casual play. This is why the ‘play on cloud’ option of Xbox Game Pass on Series consoles is the killer-est app we’ve seen for cloud gaming.

Want to try one of the hundreds of Game Pass games, but you don’t have hard drive space - or don’t want to deal with a multi-gigabyte download? Just hit the handy cloud icon and you can play that game in real-time. (If you have enough bandwidth, cap and throughput-wise, of course - another reason that cloud gaming isn’t always perfecto.)

And as Joost notes by way of conclusion: “Consumers’ willingness-to-pay for standalone cloud gaming services apparently is low and this is perhaps the strongest indication that cloud gaming should not be considered a distinct market.”

Anyhow, since the definition of cloud gaming is muddled, it looks like Microsoft’s tactic of signing its titles with other cloud gaming providers like Ubitus and Nvidia may placate the regulator, despite not being a big concession in real-life market terms. (Microsoft says in a recent filing that its remedy is a “royalty-free worldwide license which is generally available to consumers and cloud gaming providers.”)

This also points to the difficulty of defining any market in games, especially with titles increasingly becoming cross-platform and cross-delivery mechanism. And honestly, this is why probably why the Microsoft x Activision acquisition shouldn’t be blocked, even if it’s a classic ‘big get bigger’ roll-up. The facts are just too murky.

More TikTok lessons from Landfall? We got ‘em…

Landfall’s head of community Hanna Fogelberg has kindly followed up a previous Twitter thread on TikTok success for the Totally Accurate Battle Simulator devs with a brand new one, one year later and 1.5 million TikTok followers/25 million Likes (!) in.

You may recall that we’ve previously interviewed Landfall CEO Wilhelm Nylund on the irreverent Swedish devs’ approach to discovery. And Hanna’s new thread continues their practical, but offbeat line of thinking. Here’s her top tips:

• Combat ‘posting fatigue’ by being not grinding yourself to death: Hanna says: “We’ve posted over 680 videos and eventually, the creative momentum ran out for me… I no longer force myself to post videos but try to create them when inspiration strikes, and although it has affected the growth, our views are pretty much the same!”

• Use reposts/remixes to work smarter, not harder: TikTok users don’t watch every video you do! So you can recycle, “either by repurposing older viral videos, making ones with similar content, or straight up using a formula.” Hanna notes that this TikTok video with 2.6 million views was the same visuals from another TikTok posted a year ago, but answering a different question!

• Think intelligently about viral TikTok formulas: clever video pacing can pay dividends, and Fogelberg reveals her fave: “old clip of game/calmer clip of game + transition in the music/beat drop + new/cooler clip of game = viral video.” Here’s an example from Landfall (4.3m views) for their upcoming title Haste: Broken Worlds.

• Some bonus tips that we thought were great: these are also great points: “People have a short attention span, cut any pauses in dialogue and edit videos with that in mind… don't be scared of mistakes and typos - sometimes I even leave them in to drive engagement.”

This is also an interesting & legit point to end on for higher-profile creators: “We're no longer as personal on the platform as we once were and show our faces less, because we got uncomfortable with the parasocial relationship some of our community had towards us.”

I think about this too - because the GameDiscoverCo newsletter and I may have a parasocial relationship with you, for example! (But it’s not visual, and our audience isn’t quite as young as TikTok. So I think we’re probably all safe.)

The game discovery news round-up..

Since we haven’t posted a free newsletter since last Monday, we have nearly 30 pieces of news to parcel out to you, between today and Wednesday. So let’s get started:

• What is Netflix up to recently, platform-wise? Hiring former Halo writer and head of creative Joseph Staten“as Creative Director for a brand-new AAA multiplatform game and original IP”, that’s what. (Wonder if that’s the already-announced LA Netflix internal studio - they seem pretty serious about this ‘game platform’ thing.)

• Interesting survey data on UGC? As part of a blog post about Fortnite Creative’s expansion, Ampere Analysis shared the above graph from its Q4 2022 consumer survey, showing that Fortnite players are more interested in making in-game content than the median. (And that interest drops off with age for all players.)

• Copying a similar, successful model in Japan, Nintendo has announced Nintendo Live in Seattle this September. It’s an “in-person event for fans of all ages… experience Nintendo Switch gameplay, live stage performances, tournaments, photo ops, and more.” Wonder how close it will be - geographically and time-wise - to PAX West?

• A new Wall Street Journal profile of the VR space has some intriguing Quest 2 sales data, via ‘documents viewed by the Journal’: “Beat Saber… has generated $255 million in sales over its lifetime through October [2022 and] was played monthly by 1.47 million active devices, the documents show. As of October, Beat Saber was one of 14 Quest games to have grossed more than $20 million, out of about 500 in the store.”

• The Ubisoft+ subscription service, which costs $18 per month for ‘Multi-Access’ use of most AAA Ubisoft titles, now includes the Xbox. Players “just need to connect their Xbox Live account to Ubisoft Plus”, and Ubi explained to GI that “we want to reach a new population of gamers”. They’re also (minorly!) signing indies - wonder if any non Ubisoft-published titles could get Ubisoft+ Xbox access?

• Why are there so many misleading or non-’representative of the game’ ads for mobile games? Because “35% to 46% of gamers across the regions reported they would not stop playing the game immediately after realising the ad represents non-core gameplay”, according to Nexters. So it’s still effective UA. But depressing, right?

• PlayStation deets: the console’s top downloads for March 2023 are dominated by Capcom’s Resident Evil 4 (duh!), with VR shooter Pavlov atop the PSVR 2 downloads. And April’s PlayStation Plus Game Catalog line-up is pretty decent again, including Riders Republic, Kena: Bridge Of Spirits, Paradise Killer & more.

• Did you know that third-party creators in the Roblox UGC ecosystem can now create limited-edition items? There’s some almost NFT-like rules, too: “Limiteds can be resold, and the original creator earns 10% every time the item is resold… there's an uploading fee creators must pay, including for limiteds they give away for free.”

• A sobering Reddit post here from The Wreck co-creator Florent Maurin. Despite critical acclaim for the evocative 3D visual novel, “we sold around 1000 copies on Steam, and roughly as many on consoles.. it took around ten days for the game’s sales to settle on a couple copies a day.” (This is ultimately about discovery & reach, which makes it hyper-relevant.)

• As Game Pass continues gunning for the moon, it’s added those 40 new PC Game Pass countries it was testing back in February. It’s mainly smaller territories in Europe, South America & the Middle East, but it adds up to - we’re guessing - hundreds of millions of extra possible Game Pass subscribers.

• Microlinks: somebody studied YouTube Shorts with a total of 3.3 billion views to understand how the algorithm works; PlayStation may have finally stopped sending ‘thank you for your purchase’ emails for PS Plus games ; you can search for games, entertainment, and apps using the refreshed console search page thanks to Xbox’s April OS update.

Finally, taking inspiration from other media, do you know how famed Japanese manga magazine Weekly Shonen Jump (Dragon Ball, Demon Slayer, etc!) manages discovery? This Matt Alt article on the ‘human algorithm’ of manga points out:

“Jump’s strict editorial system, which harnesses decades of sales data and know-how, shapes concepts before they even hit the page. But equally important is feedback from the end users. Every week, readers in Japan are asked to rank their favorite stories. Titles that underperform are cut without mercy.”

As well as story rankings, looks like interactive character polls are big in manga, both in & out of Shonen Jump. We found this Naruto character poll, for example:

As the story says: “Fans around the world will have a chance to vote on their favorite characters between now and January 31, 2023, and series creator Masashi Kishimotowill even draw a short manga based on the number one character.” A cool idea for engagement - and spinoff micro-projects - for big game franchises, maybe?

[We’re GameDiscoverCo, an agency based around one simple issue: how do players find, buy and enjoy your PC or console game? We run the newsletter you’re reading, and provide consulting services for publishers, funds, and other smart game industry folks.]