The PS5 and Xbox Series X won’t compete with Stadia: But Amazon might

Cloud streaming services like GeForce Now and Stadia will not compete with the Sony PS5 and Xbox Series X games consoles for quite some time, according to industry experts.

Future Source market analyst, James Manning Smith told Trusted Reviews that while game streaming services like Stadia and GeForce Now will revolutionise the market, they are too young to compete with traditional consoles, like the PS5 and Xbox Series X.

“Within the next 5 years we do not expect a significant shift away from traditional games hardware, with fully cloud based gaming platforms not having a significant impact to the sales of the PS5 and Xbox Series X in this time.”

Related: PlayStation 5 vs Xbox Series X

GlobalData senior thematic analyst Rupantar Guha mirrored Smith’s sentiment suggesting technological issues mean that, while cloud gaming will become more common, it will initially be complementary to consoles.

“In 10 years, a significant amount of games will be hosted in the cloud and accessed via thin-client PCs, consoles, or mobiles. But the latency related challenges in cloud gaming will prevent it from taking over the industry completely. Streaming games via the cloud is a more complex process compared to streaming one-directional videos, due to the constant interaction of the game with the users and vice versa,” he said.

“So cloud gaming will require suitable hardware to overcome the latency issues at the source, which will be provided by the platforms. Thus, we believe that cloud gaming will emerge as a service on the gaming platforms, as opposed to representing direct competition, at least for the foreseeable future.”

This is the strategy Microsoft has taken with its Xbox platform. The firm launched the beta version of its Project xCloud streaming service last year. The service is designed to sit alongside the firm’s Xbox and Windows games offering and let users stream titles they own, or have rented, to mobile devices over the cloud. Sony has a similar PlayStation Now service, but this is currently limited to the firm’s consoles and PCs.

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Smith said the only company that could potentially change this is Amazon, which is rumoured to be working on its own cloud gaming service.

“Amazon’s gaming arm has remained quiet on the possibility of competing in the cloud gaming space, however with the company’s expansion into subscription video and music, and AWS’ leading position in data-centre provision, it seems likely that Amazon will also enter cloud gaming,” he said.

“Amazon would be uniquely positioned to develop a USP in gaming, not only due to its Prime services, but also due to its ownership of Twitch, the leading gameplay streaming website. It is very likely that the company would leverage this in any future foray into gaming.”

Microsoft and Sony’s next generation consoles are both forecast for end of year releases. Sony unveiled the PS5’s first set of titles last week. These included Horizon Forbidden West, Resident Evil 8, Marvel’s Spider-Man: Miles Morales, Gran Turismo 7 and Ratchet and Clank: Rift Apart.