GoKawiilDespite never gaining the same traction as major gaming consoles or premium gaming PCs, cloud gaming services have steadily persisted since their rise in the 2010s. Cloud gaming services let people play video games by streaming them live over the internet. The pitch is that you don’t have to buy expensive PC gear or invest in a game console plus the price of individual titles to play AAA (or lots of not-quite-AAA) games; you just need to stream them with a subscription.
Sure, Google’s ambitious Stadia gaming service shut down in 2023, but similar services that offer streaming video game play over an internet connection from Nvidia, Microsoft’s Xbox, Sony’s PlayStation and Amazon’s Prime have kept the dream alive.
But cloud gaming services have struggled to go mainstream due to the inherent challenge of delivering consistent gameplay in an inconsistent world of laggy internet connections and millions of hardware options. (A recent New York Times headline: The Best Cloud Gaming Services Aren’t Great (Yet).) And now they may be facing an even bigger challenge: the cost of providing their services is skyrocketing, as demand for AI compute power and other data needs is making the services that data centers provide much more expensive.
As Chris Plante, co-founder of Polygon and writer and podcaster at Post Games, describes it, cloud gaming has been a “white whale” for gaming companies for the last decade. However, demand has fallen short of expectations, and costs are now rising.
“Companies sold audiences on the idea of cheaper compute that could be leased from a data center, only for data center compute to become more expensive than ever, leaving those companies with a sales pitch that no longer adds up,” Plante said.
The idea that the math behind cloud gaming no longer makes sense is starting to ring alarm bells in gaming communities. A recent Guardian story asked simply, “What happened?” to the promise of cloud gaming, and pointed to limits imposed on services like Nvidia’s GeForce Now and Xbox Cloud Gaming this year as an indicator that we may see some options disappear. A BigGo Finance analysis published this week said cloud gaming is being squeezed by big tech’s AI infrastructure needs, with some of that demand driven by the same companies that offer these cloud gaming subscriptions.
What’s changed this year in cloud gaming?
At the start of the year, all users of Nvidia’s GeForce Now, including those who’d been grandfathered in for the prior year, were subject to playtime limits on their accounts: 100 hours, with the option to roll over 15 hours of unused time per month.
That meant players who were already paying $10 to $20 a month for one of the game streaming plans would need to pay an additional $3 to $6 for an extra 15-hour block of time, depending on their tier.
Also this year, Microsoft’s overhaul of its Game Pass program, which has included price reductions, placed similar limits on Xbox Cloud Gaming usage that will go into effect in November. When that happens, Game Pass Ultimate subscribers will be capped at 15 hours of cloud gaming per month, while Premium and Essential subscribers will get 10 and 5 hours, respectively. All tiers will have the option to pay extra for more cloud gaming, but Microsoft has not revealed what overages will cost. The company said at the time, “Moving to monthly limits allows us to keep offering the service while continuing to invest in its reliability and performance. We understand that for some players the practical result is a higher cost.”
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