Data Centers and Canada’s Gaming Industry: A Look at the Challenges, Trends and Opportunities

June 11, 2020

Gaming During COVID-19

With many people staying indoors and practicing social distancing during this unprecedented time, feelings of social isolation and loneliness are unfortunately becoming increasingly common. As people in social isolation look for new ways to stay occupied and entertained, many are turning to video games.

Video games were once widely perceived as anti-social; however, the World Health Organization, which previously cautioned against playing too many video games, launched, in March,  #PlayApartTogether, a campaign encouraging people to stay at home and practice social distancing. WHO partnered with some of the biggest gaming studios/companies in the world for this campaign, including Twitch, YouTube Gaming, Amazon Appstore, Riot Games, and Snap Games, to name a few. 

Canada’s Gaming Industry and the Evolving Landscape

The video game market is staggering in size, surpassing both the film and music industries. In Canada, the video game industry contributes $4.5 billion CAD to Canada’s GDP annually, according to a new study from the Entertainment Software Association of Canada (ESAC). There are also around 700 active game development studios in Canada, with 82% of Canadian game studios based in Quebec, Ontario or British Columbia. Dontnod Entertainment, a developer known for titles such as Life is Strange, Remember Me and Vampyr, has announced they will be opening a studio in Montreal this June.

People are attracted to gaming for many reasons - games offer an escape, can be relaxing, and of course, are fun and entertaining! And in the presence of a global pandemic, they also provide opportunities for people to socialize and connect with their loved ones and even with people from all over the world. 

However, the video game industry is expected to change dramatically over the next few years, with cloud gaming, the rise of digital distribution, and more streaming platforms among some of the biggest trends. The global video game streaming market is predicted to grow by 27% a year between 2018 and 2026, according to Zion Market Research. Live streaming is more popular than ever, with new players like Facebook Gaming emerging and competing against streaming giants like Twitch and Mixer. In March this year, viewership on Twitch rose by 10% in just one week, according to the streaming software company StreamElements — which conducts regular surveys of the streaming landscape with its analytics partner

With this evolving landscape comes some new challenges for the gaming industry. A new Ernst & Young study found that 70 percent of game industry senior executives said the next five years will be more challenging than the last. This is largely due to the surge of new games and competitors carving up market share and causing a talent shortage. Furthermore, it’s expected that most AAA titles will be distributed through the cloud within five to 10 years, and therefore companies will need to embrace the rise of cloud gaming and adopt the latest technologies to succeed. In the previous months, we have seen giants launch their own cloud gaming service, with Google Stadia and GeForce Now, to name a few.

One of the biggest barriers for cloud gaming is the current lack of infrastructure and support systems available. Game streaming services operate on a centralized cloud, and as a result, there is often a lag for gamers who live far away from the data centers hosting the games they want to play. This is a particularly big issue for multiplayer games and esports tournaments. 

The Role of Data Centers in the Future of Gaming 

Cloud gaming is a booming industry and game developers are looking for data center partners to help provide the best gaming experience to users. In addition, with more games targeting smartphone users, there will be an even greater focus on edge data centers that offer fast interconnection capabilities. 

Headquartered in Montreal, one of Canada’s leading markets for data centers, we at eStruxture are set up to support the future of gaming. In fact, eStruxture has six data centers across Canada (three in Montreal, two in Vancouver and one in Calgary). Our three data centers in Montreal all offer high density deployments, ideal for compute and data-intensive game developers. 

Furthermore, through partnerships with cloud enablers and cloud providers, eStruxture offers abundant, ultra low latency connectivity options, so customers can create any combination of on-ramps and cloud architectures they require. Lastly, we offer the proximal locations game developers and their end-users need to ensure low latency gaming experiences. 

As the landscape of gaming continues to change, our customers will be prepared to take on these inevitable challenges with the support of our data centers.

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