Which Model for Cloud Gaming?

The cloud gaming service OnLive is in trouble, with a significant restructuring with resulted in half of the employees being made redundant, and the CEO stepping down. Whilst the future of OnLive is uncertain, another cloud gaming service, Coreonline – run by the developer and publisher Square Enix – has emerged, offering a different model to the incumbant options. Coreonline will run in-browser on an ad-supported basis, where watching adverts will unlock minutes of gameplay. Once those minutes run out, you will have to watch more adverts to keep playing. There is also the option to skip ads by paying for individual levels, or the whole game itself.

Coreonline launched with two relatively old games, with the promise of more titles to arrive in the future, but even when they do, it is unclear whether the notoriously fickle gaming community will be persuaded by ad-supported gaming. There is of course a precedent for something similar, ‘freemium’ mobile gaming has become the highest revenue generating model for mobile phone game developers. On the other hand, it may become more like Spotify, where the majority of revenue comes from paying subscribers, not advertisers.

There is increasing competition within the marketplace, with Sony buying out Gaikai and Gamestop planning to introduce a service of their own, however, there is still space for new entries into the market, to tap into a potentially vast market for cloud gaming. Whatever the outcome, cloud gaming is still a new service, and the questions about the best model may become more apparant as it matures.