There aren't many business models in the tech world. As soon as a new successful model appears in one vertical, entrepreneurs start trying it on for other industries. Subscription streaming, popularized by Netflix and Spotify, is logical to use for games after movies and music, and it will radically change this market

Music, videos, and games are the most popular digital content: in 2017, they accounted for about $45 billion in the United States, according to PricewaterhouseCoopers. At the same time, the game market is twice as large as the video and music markets combined. Analysts predict that the global gaming industry will reach $138 billion in 2018, and within 5 years its size will exceed $200 billion. This is many times more than the revenue of the music industry ($20 billion), although it is still less than digital video ($540 billion).

Both in music and video, the streaming model has already won leading positions. To assess its scale, just look at the Netflix statistics: video streaming pioneer accounts for 15% of all global Internet traffic, and in the US during peak hours, its share can reach up to 40%. In music, in 2017, the revenue of streaming services exceeded the revenue from other types of music distribution for the first time (the mark passed by video in 2016). Moreover, in the past few years, streaming has helped to stop the long-term trend of falling industry revenue associated with declining sales of discs. It is expected that by 2025, streaming will occupy at least three-quarters of the entire market, and the model of selling music on physical media that has existed for more than a hundred years will come to almost zero.

It seems that the streaming model is ideally designed for games. In addition to ease of use, cloud games can overcome the technical and financial constraints that users face. A sufficiently powerful personal computer for games costs at least $ 1,500 and requires an update at least once every 3 years. Popular consoles on the market are also not cheap, and games for them can often cost $50-100. Even worse, most games are limited to a single platform, and users don't have the ability to play on different devices.

In cloud games, the client device — whether it's a computer, TV, phone, or tablet-turns into a terminal for entering commands and displaying the actual image of the game, and all processing of the process and image formation takes place on a powerful server connected to the Internet. The user can play the same game on any device that has a screen and an Internet connection, including the most demanding technical characteristics of the game. So why is cloud gaming still not popular?

The first experiments, 2007-2013. After the success of Netflix streaming, several companies entered the game streaming market and managed to attract the attention of investors. One of the most famous, OnLive, received more than $50 million in investments and gained 2.5 million users.

The key problems of the companies of that period were technical difficulties with the implementation of high-quality service. If the user doesn't notice a couple of seconds of video buffering in the case of Netflix, then two seconds in the game can separate a win from a loss. This, in turn, shows the importance of having access to a developed infrastructure. But if Netflix can support almost 150 million users on other people's servers, the existing cloud infrastructure is often not enough for streaming games, which seriously complicates the model itself. As a result, most of the first stage companies were either closed or absorbed, and the market took a break for several years.