Cloud games are farther away.

Editor’s note: This article comes from the WeChat public account “Guotai Junan Securities Research” (ID: gtjaresearch), author Guotai Junan Securities research.

After a month’s delay, the 2020 college entrance examination finally ended.

The annual content-sharing activity of “what are you doing after the college entrance examination in that year” was once again talked about by the marketing people, the “throwing away schoolbags, rushing to the Internet cafe” section, like folk customs, said goodbye to youth Part of many rituals.

However, the most difficult candidates for this year’s “born in SARS and admitted to the new crown” are in an era where everything is possible.

Online courses help them to complete the final sprint before the college entrance examination. Capitals who are struggling to explore the way of promotion are happy to see their success, and set their sights on the places where the students really desire-cloud games.

According to the data from Tencent Research Institute, as of September 2019, at least 152 companies worldwide have entered cloud games, and Google, Microsoft, etc. are all active participants.

But will the game on the cloud become a castle in the sky?

01Seemingly acquaintance

Middle-aged people in the investment industry trying to distinguish between “cloud games” and “online games” may feel the power of years again.

Simply put, cloud gaming is to transfer a game that originally needed to run on a personal terminal to a cloud server for running, while the personal terminal only needs to transmit video images and operation information with the cloud server.

In theory, users only need to have a “watch video” screen to play all types of games on all platforms-“even play, you can play anything”.

Image source: Guotai Junan Securities Research

This is also the most well-known advantage of cloud gaming at the moment: the threshold for hardware devices is greatly reduced.

In the field of games, “3A masterpieces” are often used to summarize high-cost, high-volume, high-quality singleMachine game works. The excellent picture quality and complex motion design of these works also put forward extremely high requirements for players’ peripherals.

Taking Wilderness 2 as an example, the recommended configuration includes 12GB RAM memory, Nvidia GeForce GTX 1060 6GB / AMD Radeon RX 480 4GB graphics card, i7 processor, and at least 150GB of available storage. Generally more than 6500 yuan.

If you are running on a cloud game framework, the requirements for the device will mainly focus on the display effects and processor, and the threshold for getting started is greatly reduced.

In addition, the development of cloud game mode will also make game developers more likely to break the restrictions of the platform, and get rid of the control of distribution channels by big manufacturers.

Large hardware manufacturers such as Sony, Nintendo, and Microsoft all take game copyright sales as the core and load game content on their own game hardware. To play these games, players must first purchase a PS4 console and matching controller. The three major platforms of host, pc and mobile games require completely different operating equipment and feel.

Cloud games can integrate game content from multiple platforms and provide a rich and diverse game library. And the multi-end synchronous archiving provided by the cloud service allows users to share game data on different devices.

This has a great impact on the current game industry ecosystem: publishers, game platforms, game developers and players are facing upgrades or changes.

Data source: Tencent Research Institute, Guotai Junan Securities Research

Finally, the encryption and storage of cloud servers can ensure the security of data more than the traditional local storage of data. In addition, because the game is running in the cloud, it can also prevent plug-ins and other behaviors that disrupt the fair game environment from the source. Therefore, cloud gaming is expected to provide a safer and fairer gaming environment, which will greatly promote the fight against game fraud and illegal production.

02Ordinary charging mode

Breaking device restrictions and playing large games at any time is exciting, but cloud games look like they are in profit modeStill follow the old path of the grandfather.

In the main industry chain of cloud games, there are three components:

▼ Cloud game industry chain

Image source: Guotai Junan Securities Research

Unlike the traditional way for users to directly download games to their personal game library, cloud games are more similar to the cloud server and optional game library shared by many players, so the fees for playing rights are also different from traditional games. :

  • Basic subscription system: Users pay a monthly membership fee to cloud game service providers to enjoy all games in the game library. This is the most profitable model currently used by cloud games.

  • Separate purchase system: purchase the right to play a single game. It is not exactly the same as the “buy-out system” of most traditional play modes, and users can pay different fees according to the length of play in a particular game.

  • Comprehensive charging system: combining the above two charging methods.

▼ Payment system for some domestic and foreign cloud game products

Source: Youzi.com, China Electronics Network, Guotai Junan Securities Research

Three different charging methods have their own advantages and disadvantages:

1. Basic subscription system

Similar to the monthly membership of music and video apps, after paying the membership fee, you can enjoy all the content in the game library. The low-cost and all-inclusive package can attract many low-budget gamers.

However, a simple monthly fee is difficult to maintain the costs of game distribution copyright, streaming, server rental, etc.