Cloudy, with a chance of failure

So the topic for this post, if you didn't catch the pun, is the cloud. Or more specifically, streaming games from “the cloud”. For those who don't know what I'm talking about, here's the websites for “Gaiki” and “OnLive”.

Or more specifically, the idea is simple. You, the player, sit at your, whatever. Nigh any internet connected device will do. That device reads your inputs, the controls you are sending, and sends them flying off over the internet to a computer somewhere far away. That computer then runs the game itself, and sends back the resulting outputs. E.G. The audio, video, and maybe rumble of the game you are playing.

Now, let's go over this in more detail, step by step and note any advantages and disadvantages to this approach.

First, your input. You are using whatever you have access too. A gamepad, a touchpad, mouse and keyboard. This is no different than any other video game though. Even if they don't use it often both the 360 and PS3 could support a mouse and keyboard. i.e. advantage/disadvantage is nil. Well, it's not. But I'll get to that.

Second, your “input”, your control of the game, is streamed over the internet. Your device, possibly compresses the data, sends the data out to the receiving computer. Problem one, this adds lag. Specifically lag from you pressing a button to the reaction of that button press coming back to you.

All other video game distributions are played locally. Meaning your input goes from the controller to the device, and that's it. “The cloud” adds going across the internet. To some, this is bad. To the likes of John Carmack (Rage, Doom, etc.) Turn 10 (Forza Motorsport) and the makers of Call of Duty the input lag of your controller to your console (and to your screen) is already too high, to them and to many consumers the faster and smoother the response of the game, the better.

The same can be said of e-sports players. In fact anyone competitively playing Call of Duty, Starcraft 2, League of Legends, or whatever popular competitive game comes up is not going to be happy with anything that adds extra lag. That's an entire section of gamers, of consumers, that won't be happy with streaming from the cloud.

But, the disadvantages don't end their for this upstream. Next we'll consider the Kinect, or rather any high bandwidth controller (right now only cameras, but you never know.) As you should know upstream bandwidth for near any consumer broadband connection is going to be much lower than the downstream bandwidth. And Microsoft's Kinect already uses over 1.5 megabytes per second, or rather over twelve megabits per second of bandwidth.

Meaning that the ability of most consumers to send this sort of information across the internet is going to be difficult. We can compress the data more, it's true. But with an average upstream bandwidth connection in the US of less than one megabit per second even high rates of compression aren't going to be enough for even the limited bandwidth of Kinect at the moment, not to mention any potential competitors or successors. Limiting the types of inputs (controllers) available to use, especially when they've grown to be a bright spot for innovation in the industry, is a definitive disadvantage.

But let's move on to the computer that's running your game. This will be something off in an air cooled room, with a handful of IT staff watching over servers that look much like any other. You connect, pick your game of choice. And start to play.

First things first for this, and that's picking your game of choice. Assuming you have the availability of any game, it's still not going to cost less than any other game. On the positive note, there will be relatively zero distribution costs for developers/publishers. No disc, no box, no store shelf, no inventory to manage etc. But wait, that's not quite right. Again I'll get to that in a moment.

Secondly there will be no piracy. But there's a big caveat too that, and that is that there will only be no piracy if cloud streaming is the sole option. As soon as it's available to be stored locally then some bored programmer somewhere in the world will inevitably make it available to pirates.

Moving on, and back to the machines running the games themselves. The operating theory here is virtualization and elimination of excess cost. Virtualization as in not everyone on the planet will be playing games at the same time. So if two people would play at different times, aggregated over all as in “X people wanting to play right now minus Y people wanting to play overall” or “Total capacity versus actual demand at the time”. Getting back on track, you'd need less gaming machines overall to still allow everyone to play whenever they wanted. Thus lowering the cost of purchasing hardware for, ultimately, the consumer. Sort of, getting to that.

Here our lag problem crops up again. Because of course the farther away a server is physically from a client the more lag you get. As stated above lag is already a problem, and anything that can be done to minimize it should at least be considered. More practically if companies want their games to be playable at all over streaming then they'll need their servers to be at least somewhat local.

Since east coast US consumers aren't going to be transmitting and receiving from a server in Shangai due to this, this breaks up the advantage of “virtualization” mentioned earlier. Now you need servers in (or very near) all the right time zones ready to go for whatever your max capacity is, no matter what. The second someone sees they can't play their own game because the server is too busy is the second they switch to something else. A hyperbolic statement perhaps, but probably not far off the mark.

Another interesting consideration is initial investment costs. Since consumers will no longer be directly involved in purchasing the hardware any real or even hypothetical streaming company will have to make a large initial investment in the hardware itself and hope that they'll be successful enough to pay it off somewhere down the line. While console manufacturing also incurs a lot of risk due to heavy investment in design and etc., it's worth pointing out that streaming from the cloud doesn't offer remarkably better opportunities for new players to enter either.

Let's get to, who's paying for these computers the player is playing on anyway? Well, the consumer ultimately does of course. In the current home console scheme the consumer pays both directly and indirectly. $200-$300+ for the console itself, depending of course. And indirectly, part of their money for each game they buy going to the console designer/manufacturer to pay for their profits and initial design investment.

This leaves streaming as having the benefit of no initial layout for buying games. Now onto the indirect, “hidden” costs of purchasing a game. Does it seem likely that streaming services will be able to charge more for their games because of a lack of initial layout of payment? An interesting conundrum. That's certainly part of the case for the PC this generation. While games remained $50 on their people willingly payed $60 for the same game on consoles in exchange for a much lower initial layout.

But, there are other things to consider. The benefit of consoles being much simpler, and thus much harder for the consumer to break. Also a note on instant gratification, or near enough instant. No long boot time of the pc, selecting the game, etc. This too is what their extra $10 a game bought. Streaming offers only one extra benefit, and that is there is no hesitation from purchase of a game to playing it. No download, no physical store, bought and played. However this is a benefit that will rarely rear it's head versus getting a game started.

Thus I believe that streaming will have little chance to allow higher cost games to pay for the infrastructure necessary. This means that there will be little benefit for publishers, the cost will be coming out of each game purchase quite similarly to if they sold the games on today's (or tomorrow's) consoles.

Now let's back up a minute... I mentioned other benefits of the console versus the pc, but what other benefits will the console offer versus streaming? One of the most popular activities today on the Xbox 360 is viewing other forms of entertainment. Streaming from Netflix is incredibly popular, for example. And so part of that initial $250 or whatever is going towards a device that can stream entertainment as well.

Further we can leave it to the creativity and imaginations of software developers and the console designers to see what other uses these machines can offer. As an example that such is possible, a clothing store is already using Microsoft's Kinect device to virtually overlay clothing onto people standing in front of it, displaying for them what the clothes would look like on them. And it's quite possible to match them up to the right size at the same time. Improved online clothes shopping is certainly not a force to underestimated, and this is just one example of something that would be practicably impossible for a cloud streaming approach to replicate.

Thus having no initial investment costs, while an advantage, is not as large a one as one might first suppose. Moving finally to the fact that the computer in a room somewhere has computed the game and is now streaming the response across the internet back to you.

More lag comes in here, but we've covered that, so let's get to the advantage. You, the consumer, are now receiving it on any internet connected device with a screen you wish. That's cool, undoubtedly. You can play on a netbook, on an ipad, on your phone for all the service cares. The question then arises... who would really want to?

Not many watch movies on their phone, not many choose to sit down with their netbook and watch the next epic chapter of HBO's A Song of Ice and Fire. And not many people will, most of the time, want to play their triple A game on a mobile device's small screen. The ability to do so is certainly an advantage, but it's not nearly as much of an advantage as some would portend. To paraphrase someone trying Batman: Arkham Asylum on their I-Pad “I'm amazed it worked!”

That's it, it was a novelty. They didn't want to actually play it on their Ipad. They had their big, immobile tv to do that. It was a tech novelty, something cool to look at once. And while there are plenty of uses cases, “Bring your game to your friend's house as easy as that!” The primary use is still going to be little different from where and when you have your console or pc or etc. with you anyway.

So, lets check off a list:

Pros: No initial cost for a system, a decent advantage. Incredibly portable, a decent advantage. Instant gratification from buying to playing, a very small advantage.

Cons: No user made software modifications, I did not mention this but the practice is still popular for certain games on the pc, thus a small disadvantage. Lag, a mid level disadvantage. Limited controller options, another mid level disadvantage, livable certainly but not wanted.

If we were to believe this then it would seem that streaming comes out, around nil. Offering advantages balanced out by disadvantages. To those consumers who most desire the pros mentioned, and/or are least affected by the cons mentioned streaming may then seem and excellent choice. But there's two more things I'd like to mention.

Personal Computing devices are not going anywhere, and they can already play games.

It may sound simple, but computers still sell well, tablets appear to be on the rise, I already mentioned the extra functions modern consoles can provide. And there's a small trend that may eventually grow of allowing ever more powerful smartphones to connect to other devices and be used as a more general purpose computing device.

Imagine for a moment a world where you would lay your cell phone down, and it would wirelessly connect to your larger monitor/tv, speakers, mouse and keyboard and be perfectly usable as a pc. And the main point of all these things is that they too can play games. And ever more popular laptops, phones, and tablets are all just as portable as the cloud, moreso because you don't need to be connected to the internet at all times.

While these may lack the “simplicity” factor of consoles and streaming they are getting ever closer to doing so. This of course eliminates one of the cloud's biggest advantages, and comes with none of the disadvantages.

There could be a lot more to discuss. The idea of a “home cloud” where your Playstation 4 sitting at home could stream inputs and outputs to other devices. Or netflix like game subscriptions services or etc. But I am aware of those and this blog post could go on for a lot longer if we discussed such things. But instead I'll leave you with one last thought.

There is one huge disadvantage for the cloud. One that, were it to occur, could spell doom for the entire concept. If the streaming company you bought your games from shuts down, your game is gone. It's history, wiped out, your purchase eliminated.

It is not hard to imagine how consumers will feel about this. How their friends, aquaintances and people they don't even really know on social networking sites will feel when they see how “easily” hundreds if not thousands of dollars can disappear due to no particular fault of their own. If this happens consumer confidence in cloud streaming could, potentially, collapse to the point where the entire thing is not viable to even try again. Depending on the amount of customers affected, perhaps for a very long time.