PlayGiga Case Study
PlayGiga is a cloud-based gaming services company that aims to engage more ISPs by offering its cloud-based gaming platform to include high-quality games. These games can then be accessed by ISP subscribers on various smart devices at lower costs. The company has already engaged two ISPs, Telecom Italia and Turner Media Group, in order to make available their cloud-based gaming services to subscribers through these two partners. The company has offered the following benefits to its partners: richer media library content, better audience reach, and the general increase in subscribers. It also plans to expand their ISP partnership further but it first has to deal with several obstacles such as the gamer’s perception on game quality, infrastructure constraints, past performance of similar companies, and others.
PLAYGIGA’S PROFILE AND SELLING STRATEGY
PlayGiga is a technology company based in Spain that offers a recent type of service innovation called Games-as-a-Service. It has developed a proprietary technology that relies on cloud virtualization to optimize its platform and enable the real-time delivery of a premium gaming experience. PlayGiga’s platform can allow gamers to access high-quality games from multiple devices such as TVs, mobile, computers, and other smart devices at a lower cost and without the need to purchase expensive gaming consoles.
PlayGiga also aims to make high-end gaming easily available at an affordable price for everyone and not just for gaming hobbyist. Currently, only those who are heavily into complex games were the ones setting aside huge budgets to be able to buy costly gaming devices, software, and game packages. Furthermore, the high cost of purchasing new releases makes it all the more expensive to continue pursuing the hobby.
PlayGiga’s platform is different from other businesses who sell their game streaming solutions directly to gamers. The company is currently the only one that provides a cloud-based gaming platform directly to businesses such as telecommunication companies, internet service providers, and media firms who are already providing video and music offerings to their subscribers. Recently, it was able to secure a deal with Telecom Italia and Turner International which will enable the availability of PlayGiga’s game streaming platform to both companies’ subscribers.
On top of the platform, PlayGiga will also offer to these partner companies their expansive library of 140+ games that were licensed from more than 40 popular game publishers. The company hopes that their partner companies can gain more customers once their current media libraries are enhanced with cloud-based game streaming features. Users can just pay a set subscription fee to gain unlimited access to game streaming features. With this lower cost option, the ISPs can reach more customers who are not regular gamers such as families and lower income groups. Furthermore, even if the cost is reduced, high-quality game graphics can still be provided as cloud-based services like this are not resource intensive. Games can also load faster with lesser setup needed.
With this kind of business model, PlayGiga and its partner companies can provide a streaming service for games just like what Netflix did for movies and Spotify for music. The company believes that the future of games includes making games available for streaming on any connected device.
As there was no direct mention in any article of how PlayGiga was able to sell their services to their current ISP partners, we can assume that they have used the benefits and general selling strategies mentioned above to engage these companies. With regard to the deal amount of the partnerships, there were no available figures found after searching extensively in various reports, articles, and databases. There was only a mention of the following revenue-sharing model where revenues can just be divided among all the major parties involved in the partnership such as PlayGiga, third-party telecom or ISP companies, and the games’ license owners who can get 20% of the earnings.
PlayGiga was able to partner with Telecom Italia, Italy’s biggest telecommunications' provider. The company has developed TIMGames which has been added to the current roster of media content such as TV shows and music that are already being offered by the telecom company. Telecom Italia’s subscribers will be able to access more than 100 high-quality game titles as a result of this addition. The current subscription rate is at €4.99 per month.
PlayGiga has also partnered with the Turner Media Group, one of the world’s biggest private broadcasters to develop GLOUD, a cloud-based game streaming service that can be accessed from various devices such as MACs or PCs for a set monthly fee. There will be 45 games in the library that will be available to the subscribers without needing to pay for any additional storage or single games. GLOUD is initially available in Argentina and Chile from Turner’s Argentina branch as the company starts the expansion of its digital media services across Latin America. The monthly subscription cost is 222.90 in Argentinian currency and 7,735 in Chilean currency.
PLAYGIGA’S BARRIERS TO SELLING
Currently, PlayGiga only has two ISPs as its current partners. There is no mention in any reports or articles on specific reasons why PlayGiga was able to engage only two telecom partners even after five years of operation. Given this, we can just infer on the reason based on certain parallelism happening in the cloud-gaming services arena.
PlayGiga hopes to engage more companies in the future as they believe that the future of gaming involves paid subscription streaming services.
However, the company first has to overcome several barriers that are currently keeping it from expanding further. Some of the challenges encountered by cloud-gaming companies were shown in an article that was released three years ago. The content of the article is still relevant as PlayGiga stated that they will keep on taking progressive actions to overcome the barriers stated in the article.
In order to expand further, cloud gaming companies like PlayGiga have to compete first with bigger firms like Sony or Gamefly who usually end up buying lesser players. PlayGiga is already aware of this reality and they have mentioned that their approach can help them expand further. One approach is their own go-to-market strategy where they have started the development of pilot initiatives in Europe, Latin America, and Asia. In these programs, PlayGiga hopes to partner with various companies in order to lower the cloud-gaming costs and acquire their current subscribers.
Another obstacle encountered by companies who are planning to offer cloud-based gaming services are infrastructure limitations. Electronic Arts is also planning to offer a cloud-based gaming service but has encountered some infrastructure concerns along the way. The company is hoping that these limitations can be addressed by upcoming new technologies in order for their games to be made more affordable for everyone. For PlayGiga, their own cloud-based game streaming services are already available in partnership with two ISPs. However, since it is currently one of the few companies offering the service commercially, there might be an underlying concern that the service may not fully work due to perceived infrastructure limitations.
We can also refer to an article that was released three years ago to explain the challenges of cloud-based gaming. The contents are still relevant since we can draw some assumptions from the article on why cloud-based gaming services are slow to expand.
In the article, it was mentioned that OnLive, one of the first companies to offer cloud-based gaming services has already stopped offering the service. Challenges encountered by the company include low gamer adoption due to low-resolution games, large bandwidth requirements, and slow loading times. Investors of OnLive lost millions as a result of the company’s bankruptcy and eventual shutdown. This has made people wonder if cloud-gaming is still the way to go. Although PlayGiga is offering a more advanced cloud-based platform to address these concerns, there might still be a stigma attached to this kind of service given the issues with previous cloud-gaming companies. Companies might still be making sure that the service is stable and will be widely adopted by everyone before partnering with firms such as PlayGiga. This might have explained why they only have two partners even after five years of operations.
PlayGiga’s strategy to sell their cloud-gaming services to ISPs includes highlighting its improved cloud-based gaming platform containing high-quality games that can be accessed on multiple smart devices at lower costs. The company has already partnered with two ISPs, Telecom Italia and Turner Media Group, to be able to provide its cloud-based gaming service to subscribers through these two partners. The company has offered the following benefits to its partners: richer media library content, better audience reach, and a general increase in subscribers. The firm plans to partner with other ISPs in the future but it first has to overcome several barriers such as gamer’s perception of the quality of the games, infrastructure limitations, past performance of similar companies, and others.