The games industry’s reliance on cloud services has grown substantially, with spending reaching $8.5bn across both servers and backend services in 2024, according to Omdia’s Games Tech Market Forecast. When factoring in a broader range of operations solutions, this figure rises to some $12.9bn. This is almost 20% of total spending on games technology and equates to more than 5% of the entire value of the games market.
More and more games companies are recognizing the central importance of developing an effective cloud strategy, but in many cases, the thinking remains reactive and underdeveloped. It is still common for game studios to seek piecemeal solutions as the need arises rather than developing a cohesive overall strategy. This approach is highly unlikely to result in an optimized tech stack and can easily result in both running unnecessarily high costs and failing to secure the most technically effective solutions.
On the flipside, it is also becoming increasingly critical for cloud platforms themselves to dedicate sufficient attention and resources to the games market. Hyperscaler platforms, by definition, work across a wide range of industries, and despite the considerable size of the games market—some $222bn as at 2024—games companies still account for a small share of the overall cloud computing market. However, with the needs of the industry becoming increasingly specialized, the platforms that best cater to those specialized requirements are the ones that will ultimately win out.
Finally, the rise of artificial intelligence (AI) is compounding these trends in both directions. Cloud platforms are at the heart of the emerging AI ecosystem, used for building, training, and operating AI models. For the rapidly growing share of games companies looking to leverage AI, this is quickly becoming a core component of any serious cloud strategy. Meanwhile, for the platforms, AI potentially represents the biggest shift the cloud business has ever seen. That makes this a moment in which the
potential for disruption is high—emerging players have far greater opportunities to break through, while incumbents will have to work harder than ever to maintain their positions.