Cloud Gaming is something we thoroughly enjoy here at Cloud Dosage. Whether it’s playing modern hits like Halo Infinite or obscure retro games like GreeBit, cloud gaming will be a big part of the future of gaming. But, many cloud gaming platforms like Xbox Cloud Gaming, Amazon Luna and Antstream Arcade all require an upfront subscription!? Why is this? In this article, we’ll to do our best to explain our theories on why this is the case.
Free “Gaming” Can’t Pay The Bills
Let’s start with the obvious point… Llet’s say you play Fortnite on Xbox Cloud Gaming (the only free game available to play without Game Pass). The longer you play Fortnite without paying to use the server, the more Microsoft will lose out server costs. This includes the cost of the energy to power the server. A server is basically a computer that is located in a data-center, and it needs to be purchased and powered just like a computer at your home. This is the primary reason why most cloud gaming services – including those like Xbox Cloud Gaming, NVIDIA GeForce NOW and Amazon Luna which are run by trillion-dollar companies – encourage you to sign up for a subscription. And, for small independent companies like Boosteroid and Antstream Arcade charging money is a necessity just to keep the lights on.
Google Stadia actually had a free platform where gamers could pay once to “own” a game and then stream it for free forever. But, despite having the backing of a trillion-dollar search and advertising company, Stadia’s economics didn’t work. Perhaps a gaming behemoth like Steam could afford to offer a free cloud gaming service utilizing the revenue their storefront brings in daily. But, at this point, why would they? Doing so, would cut into their overall earnings. And here is the thing – if they didn’t charge, the more people that used the service, the more it would cost the company. That type of monetary scaling doesn’t attract a lot of investment!
Licensing Games Is Expensive
The next point we’ll discuss is the cost of actually getting games on these cloud gaming services. As you may know, Google spent tens of millions of dollars to get ports of Red Dead Redemption 2 and games from Ubisoft.
Xbox, Amazon, PlayStation and Antstream most probably have to pay out large sums of cash to get developers and publishers like EA, Ubisoft, 2K Games and Team17 to put just a couple of games on their subscriptions. Antstream for example used to have a free platform where you could watch ads to get access to its library. However, that plan is no longer offered most probably due to the cost of licensing games and server maintenance.
You don’t necessarily have to combine a game subscription with a cloud gaming subscription. But, giving users the ability to play games they already own (e.g. via Steam) on a cloud service isn’t exactly straight forward. You need a license to host games in the cloud! NVIDIA found this out the hard way when they were forced to remove hundreds of games from their library at the request of publishers.
After learning its lesson, NVIDIA now requires Publishers to “opt games into GFN” before they are available. Some major publishers like 2K and Sony are unwilling to do so without a pay-check.
Brand Loyalty Programs Discounts Can be a Factor
Let’s move on to our final point: brand loyalty. Xbox Game Pass, Playstation Plus, Netflix and Amazon Prime all offer their cloud gaming services bundled in with other subscriptions. This is used as a way to keep customers loyal to their services. If you want to be technical, these services are “free” addons to things that you are already paying for. While they may look free, you are actually still putting down your credit card.
However, as mentioned above, not all cloud gaming offerings can bundle their subscriptions with other services. Platforms like Boosteroid and Antstream lose out on this opportunity. The loyalty to a brand also makes it more likely a customer will subscribe to one cloud gaming platform over another. The company whose service is being paid for will benefit.
In the end, every cloud gaming service needs to find a way to recoup its costs and earn some profit. It may seem like $10 to $20 a month for the ability to stream games from the cloud is a lot. But, keep in mind that console costs (*cough* PS5 Pro *cough*) are approaching $1,000, and you can get 4-10 years of Cloud Gaming time for that price.
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