Cloud Gaming

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——The Strategic Technology Trend Reshaping Interactive Entertainment

Course: Strategic Management of Technological Innovation

Presented By Yuehan Zhang (Hannah), Yuyuan Wang (Alice) and Xi Yong

9/30/2025

Agenda

• Introduction
• Why Now – Drivers
• Strategic Trend Characteristics
• Gartner Hype Cycle Position
• Business & Social Value
• Risks & Challenges
• Conclusion & QA

Yuehan Zhang

What is Cloud Gaming?

Games run on

remote cloud servers

No downloads or

hardware upgrades

Streamed to any device

(PC, phone, TV, and even….

the watch!)

Instant access

Yuehan Zhang

Broadband

&

5G Growth

Cross-Platform Demand

New Monetization Models

Technical Architecture

Cloud: Game server clusters + GPU virtualization

Components : Edge computing + 5G networks + Video encoding optimization

Why is Cloud Gaming Emerging?

Yuehan Zhang

Real Cases

https://about.fb.com/news/2020/10/cloud-gaming-meet-facebook-gaming/

Yuehan Zhang

1

2

3

4

Pervasiveness

Sustainability

Predictability

Significance

Strategic Trend Characteristics

Yuehan Zhang

Pervasiveness

Cross-Industry Impact

Covers game developers, cloud service providers (AWS, Microsoft Azure, Tencent Cloud), telecom operators, and hardware manufacturers(NVIDIA - GeForce).

Multi-Device Accessibility

PC / mobile / TV / handheld / in-vehicle infotainment (Xbox × LG automotive partnership).

Broad User Reach

AAA access on low-end devices; expands to casual players and emerging markets.

Integration with Entertainment Platforms

Merges with streaming hubs (Netflix, YouTube) and smart-TV app stores.

Yuehan Zhang

Sustainability

Continuous Capital Investment

Tech giants such as Microsoft, NVIDIA, Tencent, and Amazon have invested for years in infrastructure and platforms.

Subscription Models

Services like Game Pass and GeForce NOW provide stable recurring revenue streams to support long-term growth.

Infrastructure Upgrades

Broadband, 5G, and edge computing continue to improve, reducing latency and lag issues.

Yuehan Zhang

member C

Cloud Gaming's Predictable Trajectory

Clear Technology Roadmaps

Major tech companies are investing heavily in edge computing infrastructure and AI-driven optimization specifically for cloud gaming applications.

Bandwidth Infrastructure Growth

Global 5G rollout and fiber expansion are systematically reducing latency issues that previously hindered cloud gaming adoption.

Analyst Confidence

Multiple industry forecasts consistently highlight cloud gaming as a key growth sector, confirming long-term market viability.

Yuyuan Wang

Transforming Gaming's Business Landscape

Business Model Revolution

Traditional one-time purchases are evolving into subscription services, advertising-supported models, and hybrid monetization strategies that create recurring revenue streams.

New Market Entrants

Telecom operators and streaming platforms are entering gaming ecosystems, viewing cloud gaming as a strategic component of their broader service offerings.

Global Access Democratization

Cloud gaming removes hardware barriers, enabling players worldwide to access AAA gaming experiences without expensive consoles or high-end PCs, potentially expanding the gaming market exponentially.

Yuyuan Wang

Gartner predicts cloud gaming will reach the Plateau of Productivity by 2026–2028, as infrastructure maturity aligns with market demand.

2020–Now: Trough of Disillusionment

High-profile closures including Stadia, Meta's gaming initiatives, and TikTok's gaming platform highlighted implementation challenges and market readiness gaps.

Gartner Hype Cycle: Cloud Gaming Evolution

2

3

4

1

2010–2015: Innovation Trigger

Early pioneers like OnLive demonstrated concept feasibility but faced technical and market limitations that led to initial failures.

2016–2019: Peak Expectations

Major launches including Google Stadia, Microsoft xCloud, NVIDIA GeForce Now, and platforms from Tencent and Alibaba created massive industry excitement.

2026–2028: Slope of Enlightenment

Improved infrastructure partnerships and refined technology implementations will drive the industry toward sustainable productivity and mainstream adoption.

Yuyuan Wang

​

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• New Revenue Models – Subscription and hybrid monetization (ads + subs + in-game purchases) generate recurring income.
• Market Expansion – xx games accessible on low-end devices and emerging markets, broadening the player base.
• Cost Optimization: Less reliance on expensive consoles; companies shift focus from hardware sales to services.

Business Value

• Accessibility & Inclusion – Lowers entry barriers, making high-quality gaming available to more people.
• Eco-Friendly Impact – Reduces e-waste and improves energy efficiency through centralized data centers.
• Cross-Platform Integration – Merges with platforms like Netflix and YouTube, building stronger global gaming communities.�

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Social Value

Xi Yong

Business & Social value

Technical Risks

• Device Compatibility: Different decoding capabilities across devices create inconsistent experiences.

Business & Content Risks

• Competitive Pressure: From traditional console/PC markets and rival cloud platforms.

Consumer & Market Risks

• Trust Issues: High-profile failures (e.g., Google Stadia) have hurt consumer confidence.
• Experience Variability: Network quality differences lead to uneven user reviews.�

​

​

Xi Yong

Risk & Challenges

• Cloud gaming is a transformative trend that shifts the industry from hardware-driven to service-driven models.�
• It offers new revenue streams, wider accessibility, and eco-friendly benefits, but faces hurdles in latency, licensing, and user trust.�
• Currently in the Trough of Disillusionment (Gartner Hype Cycle), yet with advancing 5G, edge computing, and stronger partnerships, the industry is expected to reach mainstream adoption by 2026–2028.�
• Success depends on infrastructure maturity, innovative business models, and rebuilding consumer confidence.

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Xi Yong

Conclusion

Thank

You

Xi Yong