Nvidia GeForce Now to reach more consumers via browsers; Hits 4m registered users
GeForce Now’s service reach is the biggest of any cloud gaming service globally
Nvidia is pushing ahead with its cloud gaming PC strategy and extending reach to modern browsers initially through Chromebooks, but potentially to all relevant connected devices in the future. This could mean streaming games to a browser on a PC, smartphone or tablet. Streaming to the iOS version of Chrome is unlikely to be supported - Google’s Chrome browser version of Stadia is not yet playable on iPhone or iPads – so usinf Chrome is not a workaround to the current lack of native cloud gaming apps available on the App Store. However, Nvidia has stated that it believes it will be able to stream GeForce Now to any WebRTC compliant browser on whatever device. Currently Safari on iOS is WebRTC compliant so conceivably iPhone and iPad users could access GeForce Now through the browser in the future.
Nvidia has been steadily increasing its potential reach for GeForce Now over the last few months. In June 2020, the company announced that it was making its app available to all Android TV devices, having originally been focused on its own Shield TV streaming set top box. This gives it better reach onto TV screens as it does not have a presence on gaming consoles. The combination of Android smartphones (3bn + installed base), Android TV (120m+ installed base), PCs (1.2bn+ installed base) and Chromebooks through the Chrome browser (40m sales) means Nvidia’s service has the potential to reach the most users out of any of today’s active cloud gaming services. Currently the service is available in North America, Western Europe, Russia, South Korea and soon in Taiwan. Registered users have grown from 1 million in February 2020 to 4 million today largely due to its free tier. The service is streaming 15 million hours of content every month.
GeForce Now continues to be differentiated from Google’s Stadia
GeForce Now’s support of the major PC gaming storefronts and its server architecture resulting in no porting overhead for PC games, means that it remains successfully differentiated from Google Stadia. The challenge for gaming PC-based cloud gaming services which require you to bring your own games, is the lack of appealing bundled content on offer. However, GeForce Now has grown its support for over 70 free to play games, many of which are hugely popular including Fortnite, Apex Legends, League of Legends, and World of Tanks giving it a portfolio of content to offer to both free users and premium subscribers. What is lacking is exclusives, as other PC-based cloud gaming services will also support many of these games, but Nvidia can successfully differentiate on price of service entry, which is currently free. Stadia also has a free tier, but all other services do not.
Telco partnerships are a commercial model worth pursuing
Telco interest in cloud gaming remains high, both from mobile operators pushing their 5G services and from fixed broadband players looking to defend their market position. Nvidia now has four telco partners: in Russia (Rostelecom), in South Korea (LG U+ and SoftBank) and a newly announced deal with Taiwan Mobile. These are markets which have a long history of PC gaming but that are now more firmly entrenched in smartphone gaming. Under these partnerships, GeForce Now is bundled into a telco offer and some of the bundle revenue is shared with Nvidia for managing the content, streaming tech and servers. These commercial deals therefore offer Nvidia an important revenue stream, something which is sorely lacking in relation to most of its users across its direct-to-consumer offer in North America and Western Europe.
The question of commercial viability remains
In its current commercial configuration, the direct-to-consumer GeForce Now offer in North America and Europe is in no way profitable as for most users the service is free and even the premium subscribers pay a very low monthly price for priority access. This is unsustainable and will inevitably change in the future. How could Nvidia start to drive meaningful revenue from GeForce Now?
- It could change the pricing structure and remove the free tier; or add more expensive tiers and migrate users to higher value subscriptions
- It could secure more telco deals in Western markets to drive B2B revenue streams
- It could develop entirely new B2B revenue streams: for example, by offering instant play premium PC game demos, and actively marketing these games to its audience
- Eventually it could negotiate some share of sales made through storefronts via its cloud service. Note this last idea, while a valid opportunity, is very unlikely to implemented. Nvidia has committed to not pursue this type of relationship to secure more buy-in from publishers.
None of these approaches are necessarily a route to profitability considering the infrastructure and service delivery costs associated with cloud gaming, so the fundamental question remains: What is Nvidia's strategic aim with GeForce Now? Nvidia’s participation in cloud gaming is partially driven by a need to be active in the market because cloud gaming has the potential to disrupt its core GPU business and shift consumer spending away from hardware to services in the cloud. Nvidia wants to be active at both ends of the market to make sure its leading position is not eroded as the transition takes hold.
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