Research from Bloomberg Intelligence projects that games streamed over the internet will expand into a $38 billion market by 2035. The shift, driven by artificial intelligence and expanding cloud infrastructure, threatens to push traditional video-game consoles into niche status as rendering moves away from local living-room hardware.
The shift relies less on traditional video streaming and more on artificial intelligence.
Cloud Gaming Market May Reach $38 Billion by 2035
Bloomberg Intelligence projects that games streamed over the internet will grow into a $38 billion market by 2035. That forecast comes with caveats about scale. The broader gaming industry remains vastly larger, with the United States market alone forecast to reach $63.56 billion in 2026. Because of that discrepancy, analysts note that the extinction of the console will not happen overnight; rather, it is projected to impact future home consoles by turning mass-market boxes into a smaller, specialized category over the coming decade.
Corporate Exposure Across Major Hardware Manufacturers
The financial impact of this transition varies widely among the major platform holders. Companies most exposed to cloud gaming are frequently the same entities that sell the physical consoles. Microsoft operates Xbox Cloud Gaming and was projected by Bloomberg Intelligence to hold roughly 40% of the cloud-streaming market, recording an estimated 220 million hours of streamed gameplay in the September quarter. Nvidia operates GeForce Now and generates profits regardless of whether a game runs on local hardware or a data-center GPU. Sony is considered better positioned through its installed PlayStation Plus ecosystem and the PlayStation Portal, while Nintendo has treated streaming as peripheral, leaving it poorly positioned for a cloud-driven shift.
Economic Realities of Data Centers and Compute Costs
The underlying economics of cloud streaming depend heavily on variable compute costs. Unlike a traditional console where the buyer purchases the computing power upfront, streaming consumes real GPU time for every hour a player spends in a session. Bloomberg Intelligence projects that current AI data-center demands, which are pushing computing prices upward, will eventually create surplus GPU capacity by the end of the decade, driving operating costs down to levels where cloud economics become sustainable. Until that surplus arrives, streaming carries a heavy and uncertain cost per player, a factor that has kept cloud adoption moving slower than anticipated.
Cloud Platforms Target Emerging Markets Despite Practical Hurdles
Cloud platforms offer a distinct expansion path into emerging markets where a $500 home console has historically been unaffordable, allowing companies like Microsoft to capture entirely new audiences rather than simply replacing existing box owners. At the same time, practical hurdles remain. Cloud gaming has spent the better part of a decade described as one to two years away
from mainstream adoption, while traditional hardware approaches market saturation among core gamers. Whether the headline prediction becomes reality depends on whether data-center build-outs ultimately produce the expected GPU surplus late this decade.