Tencent, Alibaba, and Huawei have all entered the market. How far are we from the era of TV cloud gaming?

Chinese living room games are a concept that is brought up by various industries every once in a while.

The "ban" on game consoles has been lifted, and living room games are going to "rise";

OTT smart set-top boxes are becoming popular, and living room games are on the rise;

Domestic TV game consoles are launched, and living room games are going to "rise";

The domestic 3A game "Black Myth: Wukong" became a hit, and the living room game is about to "rise";

Google, Microsoft, Amazon, and Nvidia are planning cloud gaming, and living room gaming is about to "rise";

Now, as Tencent, NetEase, China Mobile, China Unicom, China Telecom, and Alibaba have all entered the cloud gaming market, living room games are about to "rise" again.

However, amidst the waves of rise, China's living room game is like Schrödinger's cat, always in a superposition state of "decline" and "rise".

However, every time Chinese game players go to "observe" with great anticipation, the Chinese living room gaming industry often "collapses" in an instant back to the state of "the earth is white and clean".

However, this is not the case in the European and American markets.

In 2019, in the North American game market, large-screen TV console games accounted for 48.8%, while this figure was only 0.3% in China. This huge disparity in numbers is often used to prove the huge development prospects and commercial value of Chinese living room games.

Now, as Internet giants have entered the cloud gaming market, the same rhetoric has been used to promote TV cloud gaming. Some media claim that large-screen cloud gaming in the 5G era will save Chinese living room gaming and will become a $2.5 billion market worldwide by 20203.

So, will TV cloud gaming be the savior of Chinese living room gaming?

Are we destined to be apart from living room games?

There is a very pessimistic view that the concept of "living room games" may have become a permanent false proposition in China and will never become mainstream.

As a highly sticky entertainment activity, the development trajectories of the gaming industry vary greatly from country to country, and often show a "first-come, first-served" pattern.

For example, in North America, after the Atari shock, ET was buried in the desert, and PC games became the only choice for North American gamers, so much so that many gamers at the time even had programming skills. In American film and television series, we can see that HardCore players are all PC gamers.

In Japan, the most popular games among the general public are from the Big Three, Nintendo's Game & Watch. Console games are at the top of the game contempt chain. Japanese PC game companies can only use "erotic" private goods to seek a place in the market. I won't give examples here.

As for China, the game "ban" in 2000 put an end to the "endless fun" brought by "Subor", and since then it has been out of touch with the global game market and has become a toy for a small number of underground players. Although the game ban was lifted in 2014 with the opening of the Shanghai Free Trade Zone, the fate of console games being marginalized has not been saved.

Today, China is the world's largest market for PC games and mobile games, and mobile games are still eating into PC games. According to data released by the China Audio-Video and Digital Publishing Association Game Working Committee (GPC) and International Data Corporation (IDC), in 2019, the two accounted for 68.5% and 30.9% respectively. From the above picture, console games are a radius on the pie chart, 0.3%, because the angle is so small that it is difficult to call it a sector.

In the Chinese market, it is unlikely that a "strong man from heaven" will save the living room game from disaster. Even if cloud games provide a good enough experience, it is estimated that it will be difficult to shake the position of mobile games within ten years. It is almost impossible to achieve a 48% market share of the game market like North America.

Cloud games have been on the stage many times, but they still cannot play the leading role

Judging from market analysis and data models alone, cloud gaming on smart TVs does have a lot to tell.

As the natives of the ocean of bits, people born in the 1990s and 2000s have begun to gain control of the living room. The big screen is no longer just a place for the elderly to watch anti-Japanese dramas and gossip about family life, but has given smart TVs greater room for imagination.

Compared to the cramped mobile phone screen and the computer screen in a corner, the large screen in the living room is undoubtedly a more suitable gaming carrier. The same picture, on a 75-inch screen and 5.1-channel speakers, brings a world of difference to players.

In addition to being able to directly reduce the hardware threshold of game consoles by thousands of yuan, cloud gaming also allows players to switch seamlessly between mobile phones, PCs, and smart TVs. Playing mobile games and PC games on TV seems to be a good selling point.

At many TV new product launches held recently, we saw that major manufacturers more or less mentioned cloud gaming. As a reflection of the diversity of entertainment, it is also a response to satisfy some players who have expectations for smart TVs.

However, if we have paid attention to the development of the smart TV industry in the past few years, we should still remember the glory of the past. At that time, many domestic game companies made targeted developments specifically for smart TVs, and even Apple equipped the Apple TV 5 with a remote control with a touchpad.

Unfortunately, smart TV games ultimately could not escape the fate of being a flash in the pan.

On the one hand, smart TVs are several years behind smartphones in hardware configuration and are basically unable to run popular games smoothly.

On the other hand, smart TVs do not have touch screens, which means that TV version games need to be developed specifically for TVs and also support Bluetooth controllers.

Moreover, smart TVs on the market do not come with game controllers randomly attached. No manufacturer will increase the hardware cost for such a niche demand, which makes it difficult for game companies to adapt games to the confusing Bluetooth controller specifications on the market.

Although cloud gaming can solve the first problem well, the handle problem is more serious on the cloud gaming platform.

Mobile games are not adapted for controllers, and the experience of mapping virtual buttons with controllers is very poor. PC game controllers are already very standardized, but they are different from the common mobile phone Bluetooth controllers on the market. Most of the mobile phone Bluetooth controllers on the market lack many buttons, such as L3, R3, etc. Different cloud gaming platforms support different controllers, and the adaptation is confusing.

Of course, TV cloud gaming cannot avoid the shortcomings of cloud gaming itself, and can only make them worse. For example, network problems. The network status of each player's home is the biggest uncertainty in the cloud gaming experience. What's more, many smart TVs don't even support 5G WiFi, let alone WiFi 6. It's okay for watching videos, but the high network requirements of cloud gaming are difficult to fully meet in terms of hardware on existing smart TVs.

Combining the above factors, we can find that although cloud games appear more and more frequently at smart TV product launch conferences, it is always the same few cloud gaming platforms that make their debut. Unlike the scene where various TV manufacturers have invested heavily in the content market, everyone just regards third-party cloud gaming platforms as a selling point and a gimmick for TV. Very few smart manufacturers are willing to really invest real money in cloud gaming.

At present, cloud game players are still concentrated among game developers (Tencent, NetEase, Zhongyou Mobile Games, etc.), operators (China Mobile, China Unicom, China Telecom), cloud game technology solution providers (Wei Ling Times, Sibo Cloud, etc.), and cloud service providers (Tencent Cloud, Alibaba Cloud, Huawei Cloud, etc.). Smart TV manufacturers have not actually taken any actual action on cloud games and are mostly waiting and watching.

Poor business model performance makes cloud gaming difficult to attract investors

Cloud gaming is an extremely asset-intensive industry that requires not only high bandwidth fees, but also the deployment of a large number of server nodes to provide a stable gaming experience for every player.

But even if server rooms can be built every 300 kilometers, cloud gaming can hardly be called an excellent business model.

You can imagine that the Internet industries that have formed or are close to forming a monopoly, and the tracks that giants are scrambling to occupy, all have one thing in common in their business models, which is the ability to utilize economies of scale to significantly reduce marginal costs and make marginal costs infinitely close to zero.

In other words, for each additional user, Taobao, Toutiao, Meituan, and Honor of Kings will hardly increase costs but can generate additional revenue. Such a business model can bring exponentially increased profits.

In contrast, in the cloud gaming industry, every additional player requires the server to provide corresponding computing power. The number of users and computing power consumption increase linearly, and the marginal cost is almost fixed, which makes the profit ceiling of the cloud gaming industry not high.

Therefore, based on the current technology, cloud gaming is not an ideal business model and is unlikely to attract capital, which is very unfavorable for asset-heavy industries.

To sum up, although the concept of cloud gaming has been dissed from many angles, it is because the current cloud gaming industry is still in its infancy in terms of server construction, software marketing, platform operation, copyright layout, and technology accumulation. What the future will be like is uncertain.

Ultimately, the factor that currently restricts cloud gaming is actually funding. As long as the money is in place, server construction, node coverage, product marketing, etc. can all be accomplished smoothly.

It is understood that there are already cloud gaming solution providers developing technology that can significantly save computing power, which can reduce computing power consumption for the same user experience by more than 90%. This technology has been verified by data and it will not be long before it is officially released.

When the business model is optimized by technology, profit-seeking capital will inevitably enter quickly, and it is believed that the cloud gaming industry will soon usher in an explosion. Of course, in the short term, cloud gaming will still exist in the Chinese gaming market as a supplement to mobile games and PC games. As for whether games can return to the living room, it ultimately depends on the product itself to see whether cloud gaming can provide a gaming experience that the public is willing to pay for.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.