Centralized vs. Decentralized Cloud Gaming

The estimated value of the global gaming industry was around 242 billion USD in 2023. Some projections estimate the gaming industry might reach a staggering 583 billion USD market cap in 2030. 

The 2030 projection for cloud gaming sits at a massive 84 billion USD market valuation. According to this data, cloud gaming will make up 15% of the whole industry by 2030. This is a 14x increase compared to the current modest value of approximately 6 billion USD. But, what is the role of blockchain technology, cryptocurrency, and decentralized cloud infrastructure in the gaming industry’s future?

Cloud-based infrastructure is vital in developing the global gaming industry, enabling gamers to play games easier than ever. Providing digital storage and streaming services for gamers has been pivotal for the development of the gaming market. However, traditional cloud infrastructure is heavily centralized and has various limitations regarding speed, scalability, and costs. 

Implementing blockchain in cloud-based gaming and using smart contracts for gaming on decentralized clouds can improve user experience.

Let’s examine centralized and decentralized systems in cloud gaming to understand how these solutions work. We will also analyze how decentralization can propel the cloud gaming sector to new heights.

Cloud Gaming: The Future of the Gaming Industry

Although cloud gaming is currently a small portion of the gaming industry, it's rapidly growing. The projected growth rate by 2030 is a clear testament to its rising prominence. The key strength of cloud infrastructure is that it removes the burden of using expensive gaming hardware from gamers. 

With cloud computing, users don’t need to spend high amounts of money on state-of-the-art computers with strong GPUs. Cloud gaming democratizes access to gaming. Anyone can play their desired game through a cloud service. Of course, the service needs to support that particular game. 

Cloud gaming services provide the hardware gamers need to play high-end AAA games without owning robust hardware. Users can pay cloud service providers and essentially rent computing power to play games. Instead of strong GPUs and abundant processing power, users just need an internet connection to engage in quality gaming. 

With cloud gaming platforms, gamers don’t need to worry whether their hardware meets the requirements for trending games.

However, traditional, centralized cloud gaming infrastructure isn’t flawless and has various limitations. That’s precisely what decentralized cloud services like Aethir are tackling. 

Now, let’s examine how centralized cloud gaming infrastructure works compared to decentralized cloud solutions.

Centralized Cloud Infrastructure

Centralized cloud infrastructure is the original technological iteration of cloud-based services. In the gaming sector, the first attempts at centralized cloud gaming happened in the early 2000s. 

Cloud gaming services like Game Cluster and OnLive pioneered the concept of cloud gaming. These and, later, similar services all used a centralized infrastructure model, dependent on centrally controlled servers. Expensive server data centers were responsible for providing the processing power for running games.

Even many leading big-tech companies, such as Google, Microsoft, and Amazon, launched their cloud gaming services. Centralized cloud infrastructure allows players to enjoy a wide variety of popular games. However, these centralized systems proved to be quite expensive and not very cost-efficient. 

Many centralized cloud services use a dedicated GPU model that allocates an entire GPU to a single user. A centralized operational model dedicates one GPU per active user. This often leads to a vast amount of unused processing power. That’s because games rarely require the whole capacity of a high-end GPU, leaving excess power unused.

Decentralized Cloud Infrastructure

Decentralized cloud infrastructure has an entirely different approach to providing cloud gaming services. Instead of operating centralized servers, a decentralized network architecture allows service providers to distribute their infrastructure globally in hundreds or even thousands of locations. This enables decentralized services to take advantage of edge computing. Networks that use edge computing provide processing power directly, physically as near as possible, to the end-user. 

Shortening the distance between cloud resources and end-users is highly beneficial for gamers because it lowers latency.

Also, the decentralized nature of such networks enables GPU-pooling by sharing processing resources and combining processing power. Different GPUs that are part of the network can share processing power and channel it to the nearest user.

Cloud gaming services can maximize their efficiency and eliminate unused GPU capacity through a decentralized network. The network can operate cost-efficiently, saving power and maximizing gains. However, if a cloud gaming infrastructure lacks decentralization, optimizing performance in real time can be quite difficult. Taking advantage of idle GPU processing power is impossible if there is no decentralized network structure.

Centralized cloud gaming services were an excellent solution for the Web 2.0 era. However,  the Web 3.0 revolution is here, and it’s all about decentralization.

The Limitations of Gaming on Centralized Cloud Systems 

Some critical limitations of centralized cloud gaming services are latency issues, scalability, and pricing.

The number of players shifting from traditional to cloud solutions is rising in a rapidly growing cloud gaming market. The growing influx of users demands high scalability from cloud gaming services. 

Centralized cloud systems can have difficulty handling a high influx of new users. Usually, centralized systems maintain their servers in a limited number of locations. These data centers are responsible for providing gaming services to users in a vast geographical area. 

When the distance between end-users and the cloud infrastructure is high, gamers can experience high latency. Latency issues can considerably impair the overall gaming experience. 

A lag of just a few tens of milliseconds can mean the difference between loss and victory. In a fast-paced FPS game or a tense AAA racing title where every millisecond matters, lagging is unacceptable. Nothing is more frustrating for players than losing an in-game opportunity because of high latency.

When it comes to pricing, centralized cloud gaming services often charge hefty fees.  That’s because they are unable to utilize untapped processing power that would enable them to boost their efficiency. Furthermore, maintaining centralized data centers is quite expensive and puts a considerable financial burden on service providers.

Advantages of Decentralized Cloud Infrastructure in Gaming

Decentralized physical infrastructure (DePIN) efficiently solves all issues plaguing centralized cloud gaming. A decentralized cloud gaming network can eliminate high latency by distributing the network’s infrastructure. Instead of concentrating thousands of GPUs in a data center, the network spreads across a vast geographical area. 

Network participants pool and share processing power to ensure players get access to the power they need. Moreover, all users receive power from the sources physically closest to their location. Thanks to edge computing, players can get processing power delivered to them lightning-fast, without latency issues.

By distributing infrastructure, decentralized cloud gaming networks can offer cheaper services to both enterprise-grade clients and individual gamers. Decentralized physical infrastructure, networks use power highly efficiently because of internal power sharing and pooling.

Also, decentralized cloud services don’t need to maintain expensive server facilities. All of this enables service providers to maximize gains and thus afford to provide cheaper services to users. Low prices democratize access to high-end gaming in developing global regions, considerably lowering the entry barrier for gamers.

Furthermore, decentralized cloud gaming can utilize cryptocurrency and power GameFi projects. With blockchain and smart contracts for gaming on decentralized cloud networks, players gain access to the Web 3.0 economy.

Implementing Blockchain in Cloud-Based Gaming

By using blockchain networks and smart contracts for gaming on decentralized cloud infrastructure, cloud services are ushering in the era of Web 3.0 gaming. While traditional AAA titles are retaining their market dominance, the blockchain gaming market is steadily growing. The number of blockchain gaming studios and the quality of blockchain games is increasing thanks to Play-to-Earn games. The NFT impact on the gaming industry has had a key role in the adoption of blockchain gaming. 

Since decentralized cloud infrastructure utilizes blockchain technology to ensure complete operational decentralization, implementing blockchain in cloud-based gaming is a logical step. The gamified economic model of Play-to-Earn games isn’t viable for centralized cloud infrastructure. Centralized systems lack the mechanics to facilitate fast in-game transactions of digital assets securely. On the other hand, Web 3.0 games enable secure transactions in gaming with blockchain technology.

With the increasing popularity of blockchain games, decentralized cloud gaming service providers are gaining the upper hand. Consequently, centralized services can’t compete because of their lack of support for blockchain technology.

NFTs and Cryptocurrency in Decentralized Cloud Gaming

Blockchain gaming depends on cryptocurrency, and the NFT impact on the gaming industry is becoming increasingly prominent. NFTs allow users to tokenize in-game items like equipment, characters, virtual real estate, and much more. 

By using secure transactions in gaming with blockchain technology, users can freely transfer NFTs between themselves. Gamers can trade NFTs on digital marketplaces, powered by blockchains. Decentralized cloud infrastructure can effortlessly host in-game NFT markets. Users can freely execute blockchain transactions with their crypto wallets, on a decentralized gaming service.

Of course, to do so, players need to use cryptocurrency, which makes in-game transactions highly convenient. Crypto transactions don’t require bureaucratic procedures associated with bank card payments. Users can facilitate cryptocurrency payments through the blockchain while playing their favorite Web 3.0 games on decentralized cloud infrastructure.

Conclusion

Centralized cloud gaming services have been a valuable development step for the gaming industry. Traditional cloud gaming provides a viable alternative to purchasing expensive gaming hardware. Unfortunately, as this article shows, it has multiple limitations. 

Regarding scalability, latency, pricing, and technological innovations, decentralized cloud infrastructure is several steps ahead of its centralized counterpart. The Web 3.0 era uses blockchain technology and relies on decentralized infrastructure to provide services. Decentralization ultimately brings faster, more reliable, scalable, and cheaper services to end-users. 

Thanks to decentralized cloud infrastructure that utilizes edge computing and blockchains, decentralization empowers gamers and enterprises worldwide.