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(Don’t) Get Off My Cloud! Where will Cloud Computing take the Gaming Industry?

Over the last 18 months, I’ve been asked on more than one occasion what I think about Cloud Computing (CC) and implications for the gaming industry. To be very honest, I had been bluffing my way through these conversations for some time and it wasn’t until I was at a video game conference in Malta earlier this year that I really got to grips with what CC is all about.

For those of you who still have no idea what I am talking about, at a very basic level, CC means that users obtain or use information from another server. In practical terms it refers to software hosted and accessed online, rather than on physical hardware or servers (Google Docs being the software application that I am – and probably most other academics I know are – most familiar with). In essence, CC involves an external third party storing and/or hosting data and/or applications for the company using the service. Although CC is a relatively new term, the underlying idea (and arguably the technology) has been around for some time.

So what does this all mean for the gaming industry? In the last decade online gambling has started to take off and is slowly displacing offline gambling activity. Although the number of people who gamble online are in a small minority, internet access has become cheap and other external factors (such as national smoking bans and online gambling being seen as providing ‘good value’ for players) are starting to impact on the offline leisure industry (including gambling).

There are of course a number of reasons why gaming companies are moving into Cloud Computing. Advocates of CC are almost evangelical in their praise for what it can offer companies. Many commentators refer to CC as “a game changer”. In relation to video gaming, I have even seen CC described as a “console killer” as gamers will be able to play from anywhere on any device that has internet access (such as their iPads). In this context, “cloud gaming” can stream ‘on-demand’ games to players who don’t want to buy expensive and/or bespoke hardware. For instance, the millions of Farmville players on the social networking site Facebook shows the impact of games using CC can potentially have. Furthermore, as Eric Knipp (Principal Research Analyst at Gartner Research) says:

“Companies use a variety of tactics to crack the golden egg. Some include basic table stakes – easy to use, well-documented programming and/or packaging interfaces, reliable monetization mechanisms, digital rights management, and reasonable revenue splits with game publishers and developers. Additional tricks of the trade include support for game-enriching hosted capabilities (like multiplayer, matchmaking, player-to-player relationship management (a.k.a. “friends”), product recommendation engines, and player ranking systems). Marketplaces must balance their efforts to attract both the gamer and the creator” (http://gametheoryonline.com/2010/09/03/cloud-computing-changes-video-games/)

Almost every article I have read typically asserts that if implemented and used correctly, CC brings a number of immediate benefits to commercial online companies to help them “stay ahead of the curve and the competition” including (i) increased performance and efficiency savings, (ii) enhanced security, (iii) increased reliability, and – arguably the most important – (iv) reduced financial costs. The reduced costs primarily come from companies being able to try out new applications without having to invest in potentially expensive information technology infrastructure. Additionally, company start-up costs are likely to be lower, and the cost of using CC storage and services are likely to be cheaper than the cost of maintaining its own servers.

Gaming businesses will need to offer services in the way that customers want them. In the gambling market, the most obvious application will be when large amounts of people want to gamble or bet on a particular high profile sporting event simultaneously and/or at short notice such the FA Cup final or the Grand National. The other area where CC is likely to be of help in the gambling arena is for gamblers who play games in multiple media including the internet, mobile phones, and interactive television. CC allows gambling to be available 24/7 even when people are on the move. Other benefits include (i) the opportunity for social gameplay (i.e., playing along with many other gamblers), (ii) the opportunity for servers to be added on a daily basis, (iii) games can be reconfigured automatically, and (iv) services can be corrected with relative ease.

The move towards cloud computing in the gaming industry is starting to happen. Earlier this year, Bet 365 (the British online casino operator) adopted a cloud computing solution to reduce the latency of its core betting system as a way of improving gamblers’ experiences on its website. In layman’s terms, it speeds things up for those accessing the website and can handle large simultaneous demand. The use of CC in Bet 365’s ‘In-Play’ betting system now means that punters can increase their stake in less than two seconds and can support up to a few million gamblers concurrently.

Successful gaming companies are likely to be those that cater for what their customers want. There appears to be a demand from gamblers for access to a much larger number of events and markets. Cloud Computing appears to provide the infrastructure for how the demand can be met – even if it is unpredictable!

Dr Mark Griffiths, Professor of Gambling Studies, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK

Further reading

Griffiths, M.D. (2011). Technological trends and the psychosocial impact on gambling. Casino and Gaming International, 7(1), 77-80.

Griffiths, M.D. (2011). Gaming convergence: Further legal issues and psychosocial impact. Gaming Law Review and Economics, 14, 461-464.

King, D.L., Delfabbro, P.H. & Griffiths, M.D. (2010). The convergence of gambling and digital media: Implications for gambling in young people. Journal of Gambling Studies, 26, 175-187.