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Sony CEO Kenichiro Yoshida warned earlier this month that the business of cloud gaming remains “very tricky,” even after years of companies attempting to figure out how to run such services at a profit.
Speaking to the Financial Times, Yoshida pointed to latency as one of cloud gaming’s biggest issues—servers require fast response times, or games will feel sluggish—and the inefficiency of running specialized data centers 24/7, when demand is stacked toward the post-work evening hours.
“I think cloud itself is an amazing business model, but when it comes to games, the technical difficulties are high,” Yoshida said. “So there will be challenges to cloud gaming, but we want to take on those challenges.”
Yoshida added that Sony had to find ways to fill “dark time,” referring to the period of the day when game servers tend to be idle. According to FT, Yoshida said Sony had taken advantage of the lighter processing loads to further train GT Sophy, an AI intended to do for racing game Gran Turismo what IBM’s Deep Blue did for chess.
“The dark time for cloud gaming had been an issue for Microsoft as well as Google, but it was meaningful that we were able to use those [quieter] hours for AI learning,” he told the paper.
Sony discontinued PlayStation Now, its on-demand game streaming service, in 2022 and merged its functionality with its tiered PlayStation Plus service. Game Rant reported in late May that of the roughly 47.4 million subscribers to PS Plus, around 8 million are subscribed to PS Plus Premium, the tier that supports streaming. FT reported Microsoft claims its own Xbox Cloud Gaming service has over 20 million users (one of the key issues that UK regulators cited in their efforts to block Microsoft’s acquisition of game publishing giant Activision Blizzard).
According to the Economist, research firm Ampere Analysis estimates streaming still accounts for under a penny of every dollar spent on gaming. Google shuttered its Stadia service earlier this year after failing to attract a significant audience.
However, Ampere data also shows game subscriptions have taken off big time and now account for around 7% of total gaming spend. Microsoft is in the lead there at 57%, the Economist reported, though that model may run into difficulty if providers find subscription-based access to game libraries doesn’t make as much revenue as selling individual copies.