Clouds on the Horizon

Section A

The case study explores a generation of video games from consoles, PC games, Video games to the latest trend cloud gaming technology. The exponential growth of video gaming industry to the point of rivaling Hollywood is remarkable (Hagiu & Herman, 2014). The unpredictable nature of financial profitability of the video game industry has been highlighted with the rise and fall of several reputable firms. Video gaming industry technology is heavily patented and it makes certain companies gain immensely as long as they enjoy their success until that time they are replaced by new firms with newer technologies (Hagiu & Herman, 2014). Recent developments such as mobile gaming and PC games have helped increase the popularity of cloud gaming. Cloud gaming operates on a simple canon of having a parent company host the computing intensive game resources, while client devices connect remotely to the servers. Cloud gaming enables a wider array of users enjoy resource intensive games via their limited computing devices (Hagiu & Herman, 2014). Cloud computing continued enjoying unprecedented growth and profitability until it all ended in 2012 sending companies into huge operating losses (Hagiu & Herman, 2014). Cloud gaming seems to have entered a cautious phase as major cloud gaming providers are executing measured strategies. It seems that the huge loss of investment by HTC and others in the OnLive venture served as a warning in cloud gaming (Hagiu & Herman, 2014).

Section B

Some important question warranting discussion could include:

  1. Do video gaming firms intend to shift from traditional gaming platforms to cloud gaming or is it just another product line to try out?
  2. What were the contributing factors to the failure of cloud gaming during the subject period?
  3. Beyond the technology, what other factors influenced the demand for particular video games development?
  4. What are the effects of video games on the targeted audience?
  5. Should cloud gaming be judged solely on activities of current market leaders?

Section C

What were the contributing factors to the bubble burst of cloud gaming during the subject period?

Cloud gaming technology was developed and focused on effective functionality. OnLive and Gaikai are examples of cloud gaming firms that have produced cutting edge cloud gaming and will continue enjoying remarkable profits. However, subjected firms end up restructuring or having to wind up operations. The answer lies in the fact that cloud gaming products focused on enabling technology and forgot to factor in their targeted market. Teenagers are by far the highest consumers of cloud gaming products. Most of these teenagers are still under guardian patronage or in various institutions of learning. Parents and learning institutions filter or restrict network bandwidth for their teenagers or students in a bid to cut addiction and enhance productivity. For console and PC games, guardians and learning institutions have dismissible control on teenagers’ gaming habits. However, for online gaming, parents can apply parental controls over the network. The lack of express control of network resources at home and school implies that teenagers interested in cloud gaming are greatly restrained. A depressed market will ultimately result in low sales (Hagiu & Herman, 2014). Another possible contributing factor at a time is the increasing popularity and affordability of mobile gaming. The explosion of android operating system coupled with its open source nature opened up the world for budding game developers. The mobile gaming products serve to satiate the market that cloud gaming and PC games cannot penetrate. Smartphones, being personal devices, provide a personal guarantee of restriction-free gaming moment (Hagiu & Herman, 2014).

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Thirdly, cloud gaming suffered a major blow in 2012 because the respective firms failed to appreciate the potential distraction people get being online, thanks to the Internet access. Quite often when people go online, they tend to engage in other online activities. The need for continued Internet access for gaming via cloud gaming makes cloud gaming synonymous with purchasing bandwidth or opening a webpage. Low Internet connectivity or lack of Internet connectivity heralds a disruption or end of the gaming session for the subject user. Due to the nature of video games, users will opt for “offline” gaming technologies and later share results via social media platforms.

Lastly, even with the other conventional gaming technologies such as consoles, PC games and others, parents and psychologists continue to warn of the negative impact video games have on teenage players. Such undesired effects include violence, living online, ergonomics and addiction. The nature of cloud gaming is that it exposes teenage players to harmful activities on the Internet. Guardians and learning institutions often cite bandwidth consumption as the reasoning for restricting cloud gaming sites when in essence it is to protect teenagers from deviating to harmful content sites. Cloud gaming like other conventional gaming products increases physiological arousal such as fight response. Cloud gaming increases the tendency for aggressive behavior among players. Most guardians continue to discourage the idea of their kids spending more than 12 hours playing video games. Console, PC games and mobile gaming are tolerated because they do not require a teenage player to be connected to the Internet. The need for continued stay in a fixed position for cloud gaming unlike mobile gaming makes the cloud gaming habit be strongly associated with detrimental habits that can lead to obesity. In a nutshell, parents and psychologists would purchase or condone other gaming platforms over cloud gaming. The influence of parents on cloud gaming adoption by their kids may have led to a drop in sales of cloud gaming.

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