Video Games and the Cloud

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With the cloud computing market estimated to be worth $241 billion by 2020 its no doubt that it is major business. What used to be mainly a B2B service is now being used by consumers on a day to day basis whether its for storing documents or consuming entertainment. Spotify and Dropbox are classic examples of cloud services which are really popular with consumers.

1 industry where the cloud is also huge is video games specifically ones designed for your android phone or tablet. Nobody can doubt the success of Angry Birds which has now passed one billion downloads.

Despite this and the obvious value in cloud based games it was announced that On Live, an on demand video games service was snapped up by a venture capital group for only $4.8mn. Experts had previously claimed that the company could be worth as much as $1.8bn.

According to experts if the offer had not taken place OnLive would have struggled to preserve & market their patents & Intelectual property minimizing their bargaining strength considerably. Investors in the company are thought to have lost millions as they were informed they'd only be compensated if any cash was left over when debts had been paid. Some of the investors include BT, HTC and AT&T.

On live utilises the cloud to let users play premium games over the net without using a console. Users can even play video games on their tablet, smartphone or tv set. OnLive and rival services are believed by some to be the future of the gaming industry and it is easy to see why with OnLive having over 1.5mn active users.

The announcement comes after a big year for the cloud gaming market which saw OnLive rival, Gaikal snapped up by Sony for $380mn. With Sony currently producing the Playstation 4 it is expected Gaikal's technology will be used.

With Sony clearly making a move in to the cloud video games industry it's intriguing to see whether Microsoft and Nintendo will make a similar move. Both firms rely fairly heavily on the cloud offering services such as Netflix and BBC iPlayer through their consoles.

If they don't Sony could see themselves standout in the console industry particularly offering users the ability to play video games without their console. Only time will tell how the industry will change but 1 thing is certain, the clouds will not be clearing anytime soon.

Alex Smith is a technology blogger interested in BYOD and Insight Cloud Computing solutions.
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