Play High-End Games on Servers Half a World Away – How Does Cloud Gaming Work?

How does cloud gaming work

Gamers and gaming enthusiasts have been witness to a fast and steady evolution of video game hardware and software over the last few decades. We went from spending time in arcades playing Pacman to having personal consoles to play video games in the comfort of our bedrooms. Now we’re playing games in virtual reality.

And the most recent development might prove to be the most ambitious one – as well as the most promising. Cloud-based gaming is a hot topic in the gaming sphere. But the details of the whole concept are still unknown to some, which is where we come in.

How does cloud gaming work? Is it a recent invention or something that’s been in development for a while? What are the pros and cons of it? Read on to find out about cloud gaming.

How Does Cloud Gaming Work?

Cloud gaming works by streaming games directly onto the user’s device. The games are run on remote servers in locations, often far away from the client. This means that those servers do most of the “heavy lifting” in rendering your games.

By heavy lifting, we mean all the heavier processes a device has to go through to run and render a game. Lighter processes, such as mouse movement and general input, have to be carried out by the client’s device.

Since this way of playing games is retrieving a game from the cloud, it is also referred to as cloud gaming (though gaming on demand and game streaming are also used). This is of course different from the way games are usually played – wherein a game is run locally on whatever platform the user plays on.

Needless to say, all of this is achieved through the power of the web, so cloud gaming falls under the online gaming “classification.” Let’s look into this whole concept – the future of gaming as some would call it – in more detail.

Cloud Gaming as a Concept

Man working with big data on cloud computing system

Cloud gaming servers perform the same type of service as VODs (Video on Demand), such as Netflix. You pick any title you wish – it does not have to be compatible with your console – and the game is streamed onto your device with next to no strain on your hardware.

The games stored on those cloud servers are accessed from far away and streamed just like a normal video on the user’s platform of choice.

The servers completely remove the need for two traditional types of accessing and playing games – using hardware (such as discs) and downloading games. With the ability to pick and choose any title on demand, buying physical or virtual copies of the games becomes redundant.

The software on the user’s device takes care of the inputs, which travel back to the original server and are played out in the game. There are even services in the cloud gaming sphere that allow clients access to a virtual desktop, where they can download games and install them like they would on their own PC.

So, since cloud gaming is a developed concept already in use, when did the idea behind it become a reality? When was the first version of such a server established?

Previous Attempts at Cloud Gaming

The idea behind cloud-based gaming comes from the first days of the new millennium. A Finnish cloud gaming company, G-cluster, proposed the idea of cloud gaming at E3 in 2000. By the year 2005, their first version was commercially available. That initial version allowed access to PC games stored on their servers.

G-cluster relied on VOD, middleware providers, and set-top box manufacturers to deliver their service to networks.

The networks used portals to offer the games to users. After years in the cloud gaming world and some market changes, a different game plan was needed – bigger server manufacturers and a direct supply of games to clients. Focus shifted to IPTV users, who at the time numbered in a handful of millions.

Telecommunication companies saw cloud gaming as another possible means of income. In 2010, France got its first such gaming service. More soon followed SFR’s service, which has been operational ever since. Talk about the right choice.

Other companies and investors didn’t sit idly by. A few more tried out the cloud gaming industry. However, infrastructure concerns and costs led to few serious contenders. At least until 2010 and the advent of Gaikai.

Gaikai originally never intended to provide users access to full games, but rather video game demos – which would make its platform a sort of online advertisement area. The company’s success spoke for itself and made Gaikai a hot commodity. Companies like Electronic Arts readily supported Gaikai and had working relationships with it.

In 2012, its success had a monetary value to it, and that value was in the $300 million range. Gaikai was sold to Sony Computer Entertainment and became the basis for Sony’s PlayStation Now service. That, in turn, became a part of the Playstation Plus service.

Sony would also buy Gaikai’s less successful competitor, OnLive, which allowed the company to study and control these cloud gaming inventions – and maybe even make some improvements.

Latest Developments

Video game developers brainstorming

The 2010s brought other companies’ attention to cloud gaming. In 2012. Nvidia launched what is today known as GeForce Now – then branded as Nvidia Grid. Its hardware relied on Nvidia’s own GPUs (graphic processing units). Nvidia’s Shield, a device for Android TVs, was used as the host of the Nvidia Grid.

Coupled with multiple cloud gaming providers’ services (G-cluster, Ubitus, Playcast, among others), it initially offered access to only a limited number of console games. The Grid expanded to PCs in 2017, allowing clients to import games from their Steam accounts and run them remotely.

The decision to import games from other libraries was met with opposition from publishers such as Activision and Bethesda, among others. They argued that the games purchased in those libraries were meant exclusively for use on PCs, not for any cloud-based services. This meant that Nvidia had to end that endeavor and pull the games from its platform.

Alongside the Grid, a platform called GameCloud was launched by Ubitus. This platform was launched as a white-label service, meaning any provider could use it while marketing it as its own creation and offering on-demand gaming to their clients. Ubitus tech was used to stream Dragon Quest X on the Nintendo 3DS in Japan in 2014.

Leading Names in the Industry

The latter half of the 2010s saw more development of cloud gaming possibilities. French-based platform Shadow offered clients the ability to rent out a remote desktop running on Windows 10, with access to Intel Xeon and Nvidia Quadro hardware.

The service was initially restricted to a smaller geographical area to ensure better performance but began expansion to the United States at the tail end of the last decade. Google, Electronic Arts, and Microsoft all soon joined the cloud gaming venture.

Google announced that it was starting development on Project Steam, which would later turn out to be its Stadia service. Microsoft would use its Microsoft Azure tech and start developing its Project xCloud – or as it is known today, Xbox Cloud.

Microsoft Azure is its very own console computing platform, which made the development of the Xbox Cloud a bit easier for Microsoft’s team. Electronic Arts’ announcement remains only that to this day – an announcement.

Its Project Atlas is certainly an ambitious venture where the company is looking for ways to integrate machine learning and AI with its Frostbite engine, allowing cross-platform gaming.

Another industry leader, Apple Inc., wanted to completely block cloud gaming applications from all its services, claiming that developers could bypass security checks on the iOS and add games before they became available on the App Store.

Apple had a change of heart, however, and eventually allowed cloud-based games on its devices.

The caveat was this – each game had to be available as an individual download on the iOS Store, and clients had to access the game through the Store.

Among other current projects, Amazon’s Luna offers games through a channel-style subscription service. On launch, Amazon’s and Ubisoft’s games were available. With so many current cloud gaming options available, predicting what the future might bring is impossible.

Possible Future Improvements

We mentioned how cloud gaming servers are comprised of high-end hardware that carries the heavy load of rendering blockbuster games. An integral part of that process is graphics processing units or GPUs. Normally, as a client is playing a game, a dedicated GPU gets assigned to them, which provides them with the best possible performance.

However, that also leads to a great waste of resources. With possibly hundreds of thousands of clients, the same number of GPUs would be necessary. A proposed solution is sharing the graphics processing unit’s resources between clients. With resource scheduling algorithms in place, GPU usage would become more sustainable.

For example, if a client is using only a fraction of their dedicated GPU, the rest can be used to help run someone else’s gaming experience more smoothly. This form of resource-sharing was an impossibility in the past because resource-sharing algorithms just weren’t up to par to provide a smooth experience.

With recent advancements, almost all of the GPU’s original power can still be used even while it’s split between many users. All thanks to better resource-sharing algorithms. And to help with any latency issues, more algorithms could be developed. Namely, algorithms focused on predicting a client’s next input.

A concept called “negative latency” was proposed by Stadia engineers where the algorithms would predict a user’s input so well that latency would basically be nonexistent.

Companies Utilizing Cloud Gaming

Friends playing games

As we’ve mentioned, multiple companies have gone into the cloud gaming business, to various successes.

Talking about currently available cloud gaming options, we would have to mention the following:

  • Xbox Cloud
  • Nvidia GeForce Now
  • PlayStation Now (now incorporated into PlayStation Plus)
  • Shadow
  • Amazon Luna

Xbox Cloud

Xbox Cloud is Microsoft’s cloud gaming service. Officially announced in 2018 as Project xCloud, it was released in beta in 2019 and was later offered as part of Xbox Game Pass. It offers clients the chance to play any games from the existing Xbox library (at the time of launch) while also being able to play new games from the Xbox Series X.

The service works with almost any controller, including Sony Dualshock4, and any Android smartphone and tablet with at least an Android 6.0 operating system. Browser-based gaming is also available for Game Pass subscribers on their Windows 10 devices.

Nvidia GeForce Now

GeForce Now has an extensive library of 1500+ games available for streaming on demand. Considering the humble beginnings, the current number of games in their library is more than impressive. Its servers employ Nvidia Tesla graphic cards, which allow for streaming at up to 4K and 60 fps. However, lower resolutions and frame rates are supported for those with slower internet connection.

PlayStation Now

The PlayStation Now was the first cloud gaming platform on consoles. Clients could play PS4, 3, and 2 games on their PlayStation 4, 5, or Microsoft Windows PCs. Clients couldn’t directly download a game to their PC, though they could still stream on them.

Streaming could’ve been done without an internet connection, but it was necessary to verify yourself every few days – and that did require an internet connection. Later, with the expansion of PlayStation Plus, PlayStation Now was incorporated into that service. It boasted a library of 800+ games, with new titles being introduced every month.


Shadow does not only offer the ability to stream games but also to rent out whole desktops remotely. Shadow uses Windows 10 servers to stream games. However, their gaming library is non-existent – because you can download any game from any library or launcher you wish!

Amazon Luna

This is Amazon’s answer to other cloud gaming competitors such as GeForce Now or Xbox Cloud. It offers more than one hundred games in its library and even the ability to stream your gameplay on Twitch. Amazon Luna uses Amazon’s own AWS (Amazon Web Services) to provide clients with as low a latency as possible.

Advantages of Cloud Gaming

Developer testing video game

The most significant advantage of cloud gaming is certainly its low upfront cost.

Cloud gaming services eliminate the need to buy expensive, high-end gaming hardware. With high-speed internet and an average gaming setup, one could enjoy blockbuster games. Installing games on your device would also be a thing of the past. There would be no need to download games or buy discs and similar hardware to install a game.

Cloud gaming services would also be available on a variety of devices, from smartphones and tablets to personal, low-performance computers. The input could be done through virtually any commercially available console controller, keyboard, mouse, mousepad, or even a smartphone or tablet.

Disadvantages of Cloud Gaming

The cost of providing well-performing, high-end servers is not negligible, especially considering the shift from traditional distribution means to a digital frontier. Another one of the few caveats of cloud gaming seems to be the necessity for clients to be able to stream the games in high-quality video.

And that requires a reliable internet connection with high speed and low latency. Latency is a term that should be familiar to most gamers. Though you may know it under the more common name – lag.


Latency in online gaming is referred to as lag. It represents the time delay between an input to a simulation (in this instance, a video game) and the visual or auditory response. The most widespread reason for lag in online gaming is network delay.

Online gaming, and thus cloud gaming as an offshoot of it, can be victims of the effects of latency. It is the woe of every avid online gamer. In cloud gaming, fast input and response times are necessary for a seamless performance and are rewarded by the game – by performing timely animations, for example.

Slower response times may punish the player in various ways, typically contributing to a loss.

Problems with Infrastructure

We mentioned the use of GPUs in cloud gaming and how currently each user gets assigned a personal graphics processing unit while playing a game. Now we need to consider that any semi-decent cloud-gaming service offers thousands of servers to thousands of players worldwide. Since those servers are hardware, physical storage space is a necessity.

Hence server farms and data centers housing thousands upon thousands of servers need to be built – each consuming large amounts of power to run the servers seamlessly. And since latency is such a big issue in online gaming, all service clients need access to high-speed internet with low latency.

Latency is an important factor in games that require fast and precise input, like first-person shooter games. To combat high latency, attempts were made to cache data, which could be recovered at will when necessary. But we will have to wait for a more concrete solution to the latency issue.

Closing Remarks

Cloud gaming may seem like a thing of the future, but it is already here and has been for nearly two decades. While your first question may be “How does cloud gaming work?“, the better question would be “Why isn’t it talked about more?”

Cloud gaming services offer solutions to some of gamers’ biggest problems, like the high cost of top-of-the-line equipment. But it also raises other questions related to the sustainability of such services.

With a need for expansive server farms, and thus raw materials to build and maintain those servers, the expenses of cloud gaming could outweigh its blessings. Still, the idea and realization behind cloud gaming is a concept that should excite gamers around the world.

Especially those with shallow pockets but a big passion for video games.

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