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Whatever happened to 'the power of the cloud'? | Opinion

This week saw another cloud-chasing outfit exit the scene as Improbable sold off Midwinter to pursue the metaverse

This week marked another milestone for cloud gaming, as yet another outfit with aspirations to revolutionize the industry with games only possible with cloud computing gave up on those dreams after years of work and millions of dollars spent.

QUOTE | "As part of our announced focus on the metaverse, Improbable announced the divestment of its non-metaverse focused content teams at the start of the year." - Improbable CEO Herman Narula, explaining why the company this week sold Midwinter, the last of its internal game developers established to create games that would showcase the power of its SpatialOS cloud computing technology.

[An Improbable representative reached out after publication of this article to say the company has not exited game development because its services business has a co-development studio and its UK studio focused on metaverse experiences might possibly make games as part of that remit.]

QUOTE | "A lot of people just can't believe that we think games are important... It is gaming that is our central focus, core vision and direction. All of the founders are passionate gamers, that is what we talk about and think about. It is great that our raw technology has applications in many different areas, but for us it is gaming first." - Narula, speaking to us in 2017, after the company raised $502 million in investment from SoftBank.

Despite Narula's insistence back then that the company's work on virtual worlds was "as important and significant as AI or space travel," Improbable just isn't as interested games these days. Instead, it has pivoted to the metaverse, the new market of the moment where a little interesting tech with unclear applications and a lot of vague promises can go a long way.

With the finalization of its departure from cloud gaming, Improbable becomes the latest in a string of companies to have promised a cloud-powered revolution and then failed spectacularly to deliver anything of the sort.

The cloud let games like Midwinter's Scavengers pack a lot of players into the same space. Entertaining them was a different matter

QUOTE | "Microsoft has hundreds of thousands of servers and dozens of data centers geographically distributed all around the planet, and Xbox One has the ability to instantly tap in to that limitless computational horsepower." - Xbox One engineering manager Jeff Henshaw in a closed-door meeting with journalists at E3 2013, explaining how "the power of the cloud" would forever change the types of games it was possible to make.

As an example, Henshaw explained how cloud computing would let the Xbox One track the orbital velocity of 330,000 asteroids instead of the mere 40,000 the system could track on its own without an online connection. Unfortunately, the kids these days don't appreciate tracking orbital velocity of asteroids like they used to, and it never caught on with the Xbox One. The big payoff to the system's cloud hype was a Crackdown 3 multiplayer mode that arrived more than five years into the system's lifespan and almost held its own against the cloud-less 2009 Xbox 360 game Red Faction Guerilla.

Imagine buying Xbox One based on cloud promises and waiting five years to get one mode in Crackdown 3

But the technology is cool, right? Surely having all that extra horsepower at one's disposal could make games more fun, particularly in a field where technological advancements have so often opened up entirely new genres and creative possibilities. Square Enix thought as much when it formed Shinra Technologies in 2014, but less so when it shut them down in 2016 due to a lack of interested investors.

Curiously, even as former Square Enix president and CEO Yoichi Wada was heading up Shinra, he should have been well aware of the problems that cloud-powered games are facing.

QUOTE | "Looking at AAA games, they've kind of come to a crystallization. They're getting really pretty, and they're costing too much. It's really hard for people to recoup the cost of the game. On the other end, a lot of the growth is in mobile or casual games. And the market's growing there. But what you're seeing is a gap between those two. And you're probably going to see a burst of the bubble in AAA. I think AAA is not sustainable as it currently is, as per the cost structure I mentioned." -- Wada, in a 2015 interview about cloud tech in the year-and-a-half span where Shinra was a going concern.

If AAA development was unsustainable because of the higher-resolution assets, larger and more complicated worlds, and feature sets that non-cloud consoles could enable, what did Wada think would happen if cloud computing could deliver on the promise of "limitless computational horsepower"?

Whatever the case, Shinra wouldn't be the last company to throw money at the idea. Google famously built out its Stadia streaming technology almost to the point of release before it decided it should spend a bunch of money to make first-party AAA games showcasing the cloud, and then lost interest and shut them down in a fraction of the time it would take to make a normal AAA game from scratch, much less one grappling with revolutionary new technology and novel gameplay mechanics.

GameStop was another company invested in the cloud with its acquisition of Stream Labs way back in 2011. While that was primarily going to be an on-demand cloud streaming service along the lines of OnLive, PlayStation Now, or the Xbox Game Pass streaming feature, the retailer also teased it as having far greater potential. It wouldn't really fulfill any of those hopes though, and the company gave up on it in 2014.

Cloud computing still has its supporters, however, including companies involved in previous busts.

QUOTE | "[Square Enix] has identified AI, the cloud, and blockchain games as focus investment areas under its business strategy and will engage in aggressive research and development efforts and investment in these areas." - In its latest earnings release, the Final Fantasy maker told investors its head is still in the clouds.

And then there's Ubisoft, which was an earlier supporter of both Shinra and Stadia -- Assassin's Creed Odyssey was the original public test game for Google's streaming tech -- and has finally decided to go it alone with its recently announced Scalar cloud tech.

Ubisoft has been interested in cloud gaming for years

Time will tell if they finally find an application that actually improves the game experience for players or solves a real problem for developers, but there's a pattern of behavior among these companies, an affinity for throwing money at novel-but-impractical technologies sold with a concerning lack of concrete ideas or use cases to justify their existence, but an abundance of nonsensically hyperbolic promises.

QUOTE | "When I look for the metaverse, I see it in Dante, or perhaps somewhat lower brow, Harry Potter, or any other virtual world created by human beings over the last few thousand years. I think the metaverse is a return home. It's a return back to a world of useful and powerful ideas that guide us and grow us and inspire us. It's a return to the warmth of what human beings can bring to the world, and somewhat away from the consumerism and mechanism and focus on production that has dominated a lot of technological evolution of the last 100 years." - Narula, explaining last September why he thinks the metaverse is more legitimate than past tech ideas that promised a better world and failed to deliver.

It's not just the metaverse that Narula is high on as a panacea for the world's problems. He's also keenly interested in blockchain, naturally.

Speaking of which, you might have also noticed that Ubisoft, Square Enix, and GameStop are three of the most vocal proponents of blockchain gaming within the traditional game industry these days, even if the developers' efforts to date with Ghost Recon and Castlevania have been deeply unimpressive proofs of concept, and the retailer's NFT push is "almost here" right when the NFT market itself seems to be almost gone.

The cloud, the metaverse, blockchain... These all look like marketing-driven tech solutions in search of problems. And it's conceivable some of them will find a problem well-suited to their solution, but it's neither guaranteed to happen, nor guaranteed to be as lucrative as these companies are expecting.

Regardless of whether we treat the companies pouring millions of dollars into these spaces as snake-oil salesmen or merely snake-oil consumers, everyone in the industry should take their assessments around the future of gaming with a healthy dose of skepticism, or they won't be the only ones taking a bath thanks to "the power of the cloud."

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Brendan Sinclair avatar

Brendan Sinclair

Managing Editor

Brendan joined in 2012. Based in Toronto, Ontario, he was previously senior news editor at GameSpot in the US.