Alphabet’s GOOGL division Google has been firing on all cylinders to expand presence in the cloud gaming space backed by growing initiatives for its game streaming platform, Stadia. Notably, the game streaming platform was publicly released last month.
Moreover, increasing investments by Google to bolster presence in the cloud gaming market, which holds immense potential, is likely to drive growth in the near term.
Notably, the company has recently acquired Typhoon Studios, a video game developer startup based in Montreal, Canada. This move is a testament to the intentions of Google.
The latest buyout is likely to enhance Google’s gaming skills. The startup has a dedicated team comprised of individuals carrying gaming expertise, which will be integrated into Stadia Games and Entertainment.
We believe the move will help Google in delivering enhanced gaming experience to players, which in turn will bolster the adoption rate of Stadia.
Cloud Gaming Space Holds Promise
The search giant has been focusing in the cloud gaming market for quite some time now.
Per a report from MarketsandMarkets, the global cloud gaming market is expected to reach $3.1 billion by 2024, by witnessing a CAGR of 59% between 2019 and 2024.
According to a report from Global Market Insights, the market is anticipated to see a CAGR of 30% over a period of 2019 to 2025.
According to Valuates Report, this particular market is projected to reach $740 million by the end of 2025, witnessing a CAGR of 41.9% between 2019 and 2025.
We believe that the company is well-poised to penetrate rapidly on the back of its Stadia expansion initiatives. The latest move is in sync with this strategy.
Typhoon Studios that specializes in triple-A game development is a valuable addition to Google. The buyout is likely to strengthen the company’s gaming content portfolio. Notably, the startup is currently working toward the release of Journey to the Savage Planet on Jan 28, 2020.
Additionally, Google itself is developing 450 games currently, which will be released on Stadia in 2020 and beyond.
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Intensifying Gaming Battle
The presence of an upbeat potential in the cloud gaming market has not only attracted Google but other tech giants like Amazon AMZN, Microsoft MSFT, Facebook FB and Tencent.
Facebook has recently acquired a Spanish cloud gaming company, PlayGiga, in an effort to gain foothold in the market. Moreover, the social media giant offers Facebook Gaming, which allows users to livestream their gameplay.
Further, Amazon is gearing up to announce its cloud-gaming service, which is expected to release in 2020. Moreover, the service will come integrated with Twitch, which offers video game streaming services.
Meanwhile, Microsoft is planning to launch its cloud-gaming platform — XCloud in 2020, which is currently in public beta stage.
Tencent is set to launch cloud gaming in China. The company has recently teamed up with NVIDIA whose GPU technology will power Tencent Games' START cloud gaming service.
Nevertheless, Google’s growing game streaming initiatives are likely to strengthen its competitive position against the abovementioned companies.
Moreover, Google’s cloud-computing strength remains a major positive as it strives to offer low latency, which in turn is likely to deliver better gaming experience.
Currently, Google’s parent company Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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