We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Facebook's Entry Stirs Up Competition in Cloud Gaming Space
Read MoreHide Full Article
The cloud-gaming space is heating up with Facebook jumping on the bandwagon of tech companies exploring this rapidly-growing space. Notably, the social media giant recently acquired Spanish cloud gaming company, PlayGiga in an effort to get a foothold in the market.
Facebook has been focusing on expanding its gaming efforts to diversify its revenue source. In 2018, the company launched Facebook Gaming, which allows users to livestream their gameplay, much similar to Amazon’s (AMZN - Free Report) Twitch.
Per a CNBC report, Facebook Gaming has more than 700 million monthly users.
Cloud Gaming Holds Solid Prospects
Cloud gaming, also known as “Netflix of games” or “gaming on demand”, has become an attractive space due to stellar growth projections in consumer spending.
Per Global Market Insights data, the cloud gaming market is expected to be worth $8 billion by 2025, witnessing CAGR of 25% from 2019 to 2025.
However, the biggest roadblock behind the adoption of cloud gaming is latency, which is the lag time between pressing a button on a controller and the responding action occurring on screen. Having local servers, better wireless controller hardware and the rapid development of 5G can help offset the issue.
This is why major cloud-computing providers like Alphabet (GOOGL - Free Report) division Google, Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) and Tencent have significant growth opportunities in the cloud-gaming market.
Let’s dig deep to find out what these giants are doing to gain a foothold in this promising space.
Year-to-Date Price Performance
Google & Microsoft Racing Ahead
Google publicly released Stadia on Nov 19 in selected countries. The premier edition is currently available for $129 with an optional Stadia Pro subscription of $10 per month.
Stadia enables users to stream games online on any device, such as smartphones, laptops, desktops and tablets. Moreover, users can play games on televisions with the aid of the Chromecast media stick connection.
Google is banking on its cloud-computing strength to offer a superior player experience by lowering latency. Additionally, Stadia’s dedicated controller connects to the Internet directly via Wi-Fi, further lowering latency.
However, Stadia received mixed reactions from critics due to its slightly inferior graphics compared to consoles and limited selection of games.
Meanwhile, Microsoft is gearing up to launch its cloud-gaming platform — XCloud in 2020, which is currently in public beta at the moment.
The platform will be available on phones, tablets, set-top boxes, TVs, which has a screen and an Internet connection. The platform is planned to be a complementary service to Microsoft’s Xbox One games consoles.
Moreover, the company recently partnered with South Korea based SK Telecom to bring 5G based cloud gaming to Korea. It also partnered with rival Sony for the joint development of cloud solutions in Microsoft Azure to support their respective content and game streaming services.
Microsoft has data centers around 54 different regions, globally. The company is relying on its Azure cloud-server network to serve players request locally, which will help reduce latency by shortening the distance between the end user and the data center.
Tencent & Amazon in the Fray
Tencent, one of China’s biggest gaming companies, recently partnered with NVIDIA (NVDA - Free Report) to bring cloud-based PC gaming to China.
Notably, Tencent Games’ START cloud gaming service, which began testing earlier this year, will be powered by NVIDIA’s GPU technology. The service will allow gamers to play AAA games on underpowered devices.
Tencent can leverage its own cloud infrastructure to stream games in China. Notably, the company holds rights to some of China’s biggest gaming titles.
Further, per CNET, Amazon, which already offers video-game streaming services via its Twitch platform, is planning to announce its cloud-gaming service. It is expected to release in 2020 and come with Twitch integration.
Notably, Amazon is a dominant name in the cloud-computing market courtesy of its Amazon Web Services (AWS), which offers significant leverage.
Per data from Canalys, AWS dominated the cloud infrastructure market with 32.6% market share, trailed by Microsoft Azure at 16.9% and Google Cloud at 6.9%.
Image: Bigstock
Facebook's Entry Stirs Up Competition in Cloud Gaming Space
The cloud-gaming space is heating up with Facebook jumping on the bandwagon of tech companies exploring this rapidly-growing space. Notably, the social media giant recently acquired Spanish cloud gaming company, PlayGiga in an effort to get a foothold in the market.
Facebook has been focusing on expanding its gaming efforts to diversify its revenue source. In 2018, the company launched Facebook Gaming, which allows users to livestream their gameplay, much similar to Amazon’s (AMZN - Free Report) Twitch.
Per a CNBC report, Facebook Gaming has more than 700 million monthly users.
Cloud Gaming Holds Solid Prospects
Cloud gaming, also known as “Netflix of games” or “gaming on demand”, has become an attractive space due to stellar growth projections in consumer spending.
Per Global Market Insights data, the cloud gaming market is expected to be worth $8 billion by 2025, witnessing CAGR of 25% from 2019 to 2025.
However, the biggest roadblock behind the adoption of cloud gaming is latency, which is the lag time between pressing a button on a controller and the responding action occurring on screen. Having local servers, better wireless controller hardware and the rapid development of 5G can help offset the issue.
This is why major cloud-computing providers like Alphabet (GOOGL - Free Report) division Google, Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) and Tencent have significant growth opportunities in the cloud-gaming market.
Let’s dig deep to find out what these giants are doing to gain a foothold in this promising space.
Year-to-Date Price Performance
Google & Microsoft Racing Ahead
Google publicly released Stadia on Nov 19 in selected countries. The premier edition is currently available for $129 with an optional Stadia Pro subscription of $10 per month.
Stadia enables users to stream games online on any device, such as smartphones, laptops, desktops and tablets. Moreover, users can play games on televisions with the aid of the Chromecast media stick connection.
Google is banking on its cloud-computing strength to offer a superior player experience by lowering latency. Additionally, Stadia’s dedicated controller connects to the Internet directly via Wi-Fi, further lowering latency.
However, Stadia received mixed reactions from critics due to its slightly inferior graphics compared to consoles and limited selection of games.
Meanwhile, Microsoft is gearing up to launch its cloud-gaming platform — XCloud in 2020, which is currently in public beta at the moment.
The platform will be available on phones, tablets, set-top boxes, TVs, which has a screen and an Internet connection. The platform is planned to be a complementary service to Microsoft’s Xbox One games consoles.
Moreover, the company recently partnered with South Korea based SK Telecom to bring 5G based cloud gaming to Korea. It also partnered with rival Sony for the joint development of cloud solutions in Microsoft Azure to support their respective content and game streaming services.
Microsoft has data centers around 54 different regions, globally. The company is relying on its Azure cloud-server network to serve players request locally, which will help reduce latency by shortening the distance between the end user and the data center.
Tencent & Amazon in the Fray
Tencent, one of China’s biggest gaming companies, recently partnered with NVIDIA (NVDA - Free Report) to bring cloud-based PC gaming to China.
Notably, Tencent Games’ START cloud gaming service, which began testing earlier this year, will be powered by NVIDIA’s GPU technology. The service will allow gamers to play AAA games on underpowered devices.
Tencent can leverage its own cloud infrastructure to stream games in China. Notably, the company holds rights to some of China’s biggest gaming titles.
Further, per CNET, Amazon, which already offers video-game streaming services via its Twitch platform, is planning to announce its cloud-gaming service. It is expected to release in 2020 and come with Twitch integration.
Notably, Amazon is a dominant name in the cloud-computing market courtesy of its Amazon Web Services (AWS), which offers significant leverage.
Per data from Canalys, AWS dominated the cloud infrastructure market with 32.6% market share, trailed by Microsoft Azure at 16.9% and Google Cloud at 6.9%.
Zacks Rank
While both NVIDIA and Microsoft currently carry a Zacks Rank #2 (Buy), Amazon, Facebook and Alphabet have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2020?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>