A case study of key services in Korean cloud gaming market

: Business model perspective

Jaeyoung Park, Seongcheol Kim*
*Korea Univ.

pjyvw@naver.com, hiddentrees@korea.ac.kr*

Summary

Cloud gaming market is expected to grow rapidly as a killer content of 5G which has been settled as
general network condition. However, adaptive business model for cloud gaming services is not clear yet. This study
attempts to identify successful business model customized for cloud gaming service by conducting a case study about
three cloud gaming services available in Korean market.

gaming begins with delivery of gaming action to cloud in

Ⅰ. Introduction
Before the introduction of 5G, cloud gaming was non
marketable service. Cloud gaming is an innovative gaming
format that gamers are provided videos corresponding to
their game play through operation in cloud where game
locates. Since cloud gaming is processed remotely
instead of operating downloaded program in a single
device, 5G which values for great speed, low latency and
hyper connectivity is essential. As 5G has been settled
since 2019, cloud gaming market is expected to grow
rapidly. According to Statista (2021), the cloud gaming
market is set to grow from 0.17 billion dollars in 2019 to
4.8 billion dollars by 2023. It means that cloud gaming is
expected to shift people who do not play game or those
who enjoy console games to cloud gamers who can play
games with any devices, anywhere, anytime. High growth
potential of cloud gaming market attracts major internet
business entrepreneurs such as Google or Microsoft to
promote business. They begin their cloud gaming
services in earnest from 2020.
However, suitable business model for cloud gaming is
not disclosed yet since the market is in early stage. Thus,
this paper tried to discover adaptive business model for
cloud gaming service by conducting case study of
business models for current cloud gaming services
available in Korea.
Ⅱ. Theoretical background
2.1. 5G and Cloud gaming
5th generation of cellular technology (5G) represents
for high speed, ultra-low latency and hyper connectivity.
5G is theoretically twenty times faster, one-tenth less
delayed, and available for ten times more devices than 4G
[1]. These features of 5G are key conditions for cloud
gaming. Cloud gaming demands more system related
requirements than other entertaining contents. Cloud
rendered form. Rendered signal is processed in game
located in cloud. Game scenes streamed back to players
in video form [2]. Therefore, fast velocity and all-at-
onceness of data transmission is important because rapid
exchange between player’s action and corresponding
game video is vital for gaming. Also, higher opportunity
for device connection enables massively multiplayer
online game (MMOG), the most popular game format in
Korea, to set in cloud. It means that 5G is killer system
for cloud gaming and cloud gaming is killer content for 5G.
Cloud gaming is a fascinating service in diverse side.
For gamers, they can enjoy gaming regardless of devices.
Game developers can reduce the cost of distribution
while reach for game is expanded. It is good for service
providers who own cloud resources which were utilized
limitedly before [3, 4]. Therefore, major companies have
entered in this market starting to find new business
model.
2.2. Related Research for Business Model
Business model is crucial concern for every
commercialized service since it is closely related to
corporation performance. Research for analyzing cloud
gaming business model has been conducted in qualitative
way such as interviewing small and medium size gaming
companies or following the change of business model of
specific firm [5]. However, those studies were proceeded
in the period when cloud gaming service was less
developed. As large-scale cloud gaming services opened
to public recently, this paper tries to compare three
different cloud gaming services available in Korea to
analyze business model for this groundbreaking service.
2.3. Case study
This study intends to analyze three cloud gaming
services available in Korea: GeForce NOW, Xbox Game
Pass Cloud Gaming, and GameBox. GeForce NOW and
Xbox Game Pass are global services provided by Nvidia Ⅲ. Conclusion
and Microsoft for each. GameBox is a local service
Analysis for business models of key services shows
provided by KT, major network provider of Korea. All of
difference between global services and a local service.
them has started services from 2020 based on
Global services have strength in supplying licensed
subscription model. Table 1 describes for detailed
games. Especially, Xbox game pass cloud gaming opens
profiles of each cloud gaming services.
Xbox console exclusive games to any subscribers. On the
other hand, a local service has less number of named
Table 1. Profiles of Key Cloud gaming services in Korea games but having an advantage on network management.
Xbox Game Global services compensate their weakness in network
GeForce NOW Pass Cloud GameBox condition by cooperating with local network providers. In
Gaming overall perspective, every service has imperfect business
Launch 2020.09 for PC models. Gefoce NOW is specialized in scale of game
2020.02.04 2020.09.15
Date 2020.10 for IPTV
Developer Nvidia Microsoft KT.
library, Xbox game pass cloud gaming is strong in cloud
Network technology and originality of games, and GameBox
LG U+ SKT KT
Partner distinctively owns 5G network. However, they are weak
Type Basic Premium Ultimate
One-type in each other’s strength. Cloud gaming is the service that
Voucher only possible with the effective combination of network,
Price Free 12,900\ 16,700\ 9,900\ cloud technology and game content. Therefore, business
Library 400+ 150+ 130+ model should be completed by developing three different
Age limit 18+ all 15+
side in balance.
Available
71 22 1
Country

Mobile: Android/ Mobile:

Mobile: Android
iOS(beta) Android
ACKNOWLEDGMENT
Available PC: Windows/ mac PC:
PC: Windows This work was supported by the Ministry of Education of
Platform OS Windows
the Republic of Korea and the National Research
IPTV: U+tv UHD2/3, Xbox IPTV: Gigagenie Foundation of Korea (NRF-2019S1A3A2099973)
U+tv Free2 console 1, 2
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users contents
Subscription: Extra The lowest
Profit Free service for existing subscription fee
Formula +Subscription subscribers but the for any kind of
highest in price network users
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Processor Unit, Direct
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The largest ownership for
Resources technology, Xbox
game library by 5G network
console games
linking steam
engines
Servicing with Servicing with the
Key Only conducting
local network biggest local
Processes local business
partner network partner