– How does cloud gaming work, and how is it profitable?

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I know the very basics. Cloud gaming uses the equipment of a provider to run the game, and it is streamed to the customer. This is where my knowledge ends and confusion begins. Let’s say you are playing an Xbox game. If you use Microsoft’s Xbox, those aren’t cheap. And you are only paying a small monthly fee, so how is it profitable? Wouldn’t you have to play for years to cover the cost of the equipment that is actually running the game?

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Anonymous 0 Comments

Console games are subsidized by licensing games; Sony and Microsoft sell consoles at release for a loss and make up the money through game license deals and accessories and the computer hardware is used maybe 10% of the time if you pay 2 hours a day. With a cloud streaming service there is less wasted hardware time since it’s being utilized at a much higher rate. Game streaming companies are essentially paying the upfront costs for the hardware and selling it to use so it can be utilized at a much higher rate.

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