As the cloud landscape begins to take shape, analysts anticipate that some publishers are taking a wait-and-see approach.
Last week, Nvidia’s GeForce Now cloud gaming service exited its beta, and brought its “bring-your-own-games” business model to an estimated 300,000 users. Now, just a week later, GeForce Now has hit its first major stumbling block: Activision Blizzard has chosen to remove all of its games from the service.
“Per their request, please be advised Activision Blizzard games will be removed from the service. While unfortunate, we hope to work together with Activision Blizzard to reenable these games and more in the future,” Nvidia said in a forum post.
As of today, GeForce users will no longer be able to play World of Warcraft, Overwatch, or the Call of Duty series on the service. No reason was given for the decision, but some are speculating that Activision Blizzard may be aiming to start its own streaming service, or may have reached an agreement with other cloud gaming platforms. Activision Blizzard did not answer GameDaily’s request for comment.
For David Cole of analyst group DFC Intelligence, this move represents increased competition in the rapidly-growing cloud gaming arena.
“This is a sign of coming tensions in the cloud space as traditional publishers try and stay relevant,” Cole told GameDaily.
Regarding the potential of a new streaming service from Activision Blizzard, Cole sees that as unlikely. “There is a lot of speculation including that they are working with Google, starting their own service etc. I don’t really buy any of it. Mainly I think streaming is not a moneymaker for Activision but it is a huge threat to their core business. I see this more as a reaction to perceived threats as they try and maintain control of their product line,” he said.
Recent earnings reports from Activision Blizzard have resulted in a bit of a bump to the company’s stock prices, but Cole pointed out that there has been investor concern surrounding the long-term performance. A handful of PR nightmares plagued Activision Blizzard last year, including some high-profile departures, followed by massive layoffs in February. In October, Blizzard banned Hearthstone pro Blitzchung after his public display of support for protesters in Hong Kong, and consumer reaction to Warcraft III: Reforged has been middling at best. For these reasons, the Blizzard audience is showing signs of decay, Cole said.
Last week, Piers Harding-Rolls, head of games research at analyst group IHS Markit, predicted that GeForce Now would net 280,000 paid subscribers by the end of 2020, and Activision Blizzard’s decision to pull out of the service does not change his outlook. In fact, publisher scrutiny is an important part of the growing process for burgeoning services like GeForce Now.
“I previously predicted that more games would be withdrawn from GeForce Now, due to the changing dynamic of services and storefronts in this space, so this type of action has been factored in,” Harding-Rolls told GameDaily.
That doesn’t change the fact that the move is disappointing for Nvidia and GeForce Now users. For Activision Blizzard, the road ahead is foggy, but Harding-Rolls points out that there are several potential avenues, including returning to GeForce Now.
“Activision may be tempted back if Nvidia increases its subscription price and seeks to monetise free users giving both parties more to work with,” he explained. “It may be waiting to see how the cloud gaming landscape pans out, and has decided to remove the games from GeForce Now to plan its next moves. It makes sense to remove the games if it is undecided--this avoids letting down users further down the line that might have invested time and money in Activision Blizzard games specifically to play through GeForce Now now that it has officially launched.”
Harding-Rolls said that Activision may be planning its own cloud service, but he agreed with Cole that it’s not very liikely. A more plausible next step, he said, is for the company to offer a subscription service, which it could piggyback onto existing services like Google Stadia.
“Taking a varied approach is perhaps a more sophisticated strategy than allowing all its PC games to be streamed for free (once purchased of course!) through GeForce Now. It is likely it will take a multi-channel approach to cloud gaming, putting content on a number of services,” he predicted.
Whatever the future holds for GeForce Now and Activision Blizzard, there’s no denying that the whole situation is borne from the rapidly growing cloud gaming market. Harding-Rolls believes that we’re seeing a sort of positional jockeying among big name publishers as things begin to take shape. Cloud will no doubt figure heavily into the next generation of consoles, so it’s understandable that some companies might be biding their time as things shake out a bit more. All things considered, GeForce Now losing Activision Blizzard games is likely just a pebble in the cloud landslide.
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