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While a lot of focus is placed on iGaming, a segment that is showing significant growth is the cloud gaming market. According to recent reports, cloud gaming is reaching all-time highs. The industry is predicted to bring in approximately US$4.3 billion in 2023, which is more than double 2022’s total.
Australia is an emerging market in cloud gaming and is predicted to have a market of up to US$419 million by 2027. While the industry is primarily focused on general gaming, the technology is expected to evolve into the iGaming space as well.
Gambling Insider recently reported on a study on the cloud gaming market. According to the study, total revenues are expected to reach US$4.3 billion in 2023. This would be a 62% increase over the US$2.67 billion collected in 2022. If the market matches expectations, it will represent the largest growth to date.
The market has seen significant growth in the last five years. In 2018, the entire market was only worth US$580 million. Not surprisingly, the United States is the largest market and is expected to generate US$1.2 billion in revenue in 2023. Other top countries include Japan at US$364 million, the UK at US$198 million and Germany at US$179 million.
Aussies love gaming, in particular online pokies, and the numbers from cloud gaming are backing this up. Per Statista, Australia is expected to bring in US$102.3 million in 2023. This number is expected to grow by approximately 42.26% annually through 2027. By then, the Aussie market could be worth up to US$419 million.
Presently, user penetration in Australia is expected to be around 18% in 2023. That number is expected to reach 29.2% by 2027. That could represent up to 8 million Aussies gaming via the cloud. The average spend per player is expected to be around US$21.60.
The Aussie market has grown 10x in the last six years. In 2017, Australia only represented US$12.19 million in revenue. Last year, the market reached an all-time high of $64.12 million. Based on present expectations, the market will nearly 7x in the next four years. This will be an almost 20x in growth over the decade.
Cloud gaming works on a similar concept as other cloud services. Players can connect to a service like Xbox Live and play console, PC, or online games without additional software or hardware. Instead of downloading the latest games onto your local device, you can effectively live-stream the game.
There are advantages for both sides. For players, you don’t need to install numerous games or worry about device compatibility. In some cases, playing cloud games can prove cheaper than traditional games. For developers, they only need to develop their games for the cloud platforms and servers. They can sell the games to the services rather than worrying about providing copies of games for download.
Companies make money in multiple ways. The first is by charging a service fee for the gaming platform or a fee for the individual games. Next, many games have in-game purchases where players can buy additional content, power-ups, or other game objects.
Cloud gaming is a relatively new technology, but some operators are already looking at how to incorporate it into online gambling. This could prove to be wildly advantageous to Australian online casinos. For example, a casino could develop its own gaming platform that players can connect to rather than worrying about accessing an online website.
Also, casinos could offer alternative ways of funding accounts that would be legal to players. Instead of making a gambling deposit, players could buy an in-platform currency that could be used for gambling. When it is time to cash out, this currency could be reconverted into AUD or any currency and sent to the player.
Like most emerging technology, this is not something you’ll likely see in the short term. However, with the massive growth that cloud gaming is enjoying, it is just a matter of time before top iGaming companies start offering it as an alternative to traditional online casino gambling.