The Big Problem for All the New Gaming Platforms

Google and Apple were the first to unveil a “Netflix for video games,” but Microsoft has the big-name games.

Tech giants are piling into the $180 billion video game industry. On March 25, Apple Inc. announced a subscription service called Arcade that will let people play high-quality games through the internet instead of having to spend hundreds of dollars on a standalone console or more on a high-end gaming PC. For a monthly fee, users will get as many as 100 exclusive games. Arcade was unveiled just days after Google announced a similar service, Stadia. If so-called cloud gaming takes off, it could be the biggest change in the industry since Nintendo Co. made Mario and Luigi living room fixtures in the 1980s.

Google and Apple aren’t alone. Microsoft Corp. is also developing a service, which will be available to the public by yearend. Amazon.com Inc. has a similar product in the works, according to tech news site the Information. As with TV and music, the companies that run the internet see video gaming as a natural adjacency for their influence. Streaming games requires expensive data centers to process all the action and high-speed internet cables to move it around the world in real time. Those are things only the tech giants have. “Cloud gaming creates this moment in the industry where the multibillion-dollar companies like Google and Amazon have a chance to buy their way in,” says Joost van Dreunen, co-founder of industry analyst SuperData Research. “This is a high-stakes poker game, and not everyone gets a seat at the table.”