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Wednesday, November 30, 2011

Cloud Computing And Online Gaming

Social game companies have been some of the early adopters of the cloud realizing that the cloud can offer them just in time server and DB storage to address spikes that online games normally experience. Also, a number of social games can go viral, or something like it, early on in the introduction of a game which makes the cloud a perfect answer for the social game world. In addition, social games can a have a very short half life growing quickly and then fading into the history books in only a few months. Why buy a bunch of servers if you are only going to use them for six months?

The realization that social games are driving the adoption of the cloud and in some cases challenging traditional cloud providers such as Amazon(AWS) and Rackspace has spawned a new crop of companies that are focused on the social gaming space either exclusively or as a special sales vertical.

RightScale, Fusion Storm, and Joyant are traditional hosting companies that have setup special game cloud operations with social gaming as the primary target market. For the most part their offerings are not necessarily unique even with the social game focus. However, an interesting service some of them are providing is the ability to deploy to a number of clouds in addition to their own distributing traffic and load across facilities. I suppose the reason for this is to avoid any one cloud provider from failing causing a complete shut down of an application and perhaps a cost control mechanism.

XingCloud    This company is is a bit different from the other game focused cloud provider. They are a Chinese company exclusively cloud gaming focused.   They are  leveraging the company's experience hosting Chinese games sites and integrating games into social networks. Their service is definitely exclusively focused on game developers providing cloud hosting services and quick integration of games into a number of social networks. They are actively looking to get into the US and European markets.

Clearly social game companies are taking the lead in the adoption of  the cloud and in some cases resulting in new cloud services for this space.

How about the other game providers such as casual games, console games  and online gambling?

These groups have largely ignored cloud computing. The console game and downloadable  providers are essentially offloading  game processing to the console or the PC resulting in a diminished server processing load. Therefore the cloud is not a big deal for them.

The casual game and online gambling companies that host web based games are server centric and in some cases taking on some serious volume so why are they lagging?

The primary reason they are not quickly adopting the cloud model is a legacy of traditional hosting. Many of these game companies have built large server farms and IT staffs around a self hosting environment. Despite the obvious cost benefit to switching there is usually a strong push back from the IT staff to maintain the status quo. Also, I doubt if management in these companies are cloud aware. They are using Vmware  to virtualize their hardware creating pseudo private clouds. However, this is likely an unsustainable position as their current hardware becomes obsolete and they have to upgrade or expand hardware  to handle traffic or to keep up with the increasing effciency of hardware.

Overall the gaming world is pushing the envelope of cloud computing because of the extreme volume and peaks and valleys of game usage. Cloud vendors are addressing this space with new and interesting offerings. The next interesting challenge is what do you do with all of this data that is being accumulated and how do you analyze it. This is ultimately more important then all of the hardware and network plumbing combined.

Kevin Flood is the CEO of Gameinlane, Inc. Kevin writes extensively about online games and their impact and integration into iGaming and E-commerce environments. Kevin is a frequent speaker at online game events and conferences in Asia, Europe and the US. Kevin and his Gameinlane team are currently working with online gambling, social gaming and e-commerce companies integrating social gaming with online gaming operations and integrate game mechanics into e-commerce applications.



Kevin Flood said...

Tha main reason why the online gambling haven't adopted this is because of the regulations and licenses. There aren't that many places in the western world where you can set up servers legally. These cloud providers could put server halls on i.e. Malta, but you loose one of the advantages with cloud computing and that's the advantage to have servers spread out over a larger geographical area to increase response times.


Christoffer Westberg

Kevin Flood said...

In fact, a cloud hosted iGaming solution will be easier for regulators to police and less costly for them to administer relative to self hosted environments.
The reasoning is as follows.
A.) To a great extend the risk associated with hardware tampering will be reduced.
a. The IT staff that normally would have access to hardware setup and configuration will be removed from the equation.
b. The cloud hosting hardware setup will be more standardized with a limited number of techs having access to the hardware.
c. There will be fewer facilities to police and audit.
B.) The cloud puts most of the focus on the software. Specifically, the software image(s) it supports will be limited and standardized.
a. An audit and verification process can be inserted into the process forcing an audit of the new image that is going to the cloud. This audit can be automated to detect all actual changes at the byte or bite level.
b. Each new image would be accompanied by a change control document outlining the changes and allowing regulators to verify before a commit.
C.) PCI Compliance and audit is an issue for any hosting environment processing transactions. The cloud is no different. Cloud providers are responding to this challenge by getting their entire cloud facility certified. This is expensive. However, if the igaming business can justify the cost it can be done.
The big question is where would an iGaming cloud exist that would satisfy regulators and still remain cost effective?
The reality of the cloud is that it is all about volume. There is a usage point where the cloud facility becomes profitable. How do you achieve this in the iGaming world?
I suspect that there is a business argument to be made that a cloud environment to host Malta and or Gibraltar gaming companies would work. There may be a slight price increase to be paid for the creation of the private iGaming cloud. However, I suspect the additional cost would more than make up for savings gained from economies of scale and lower cost for the gaming companies.
The more regional iGaming markets being created by country by country legislation are much harder to justify if each country requires hosting within their borders. Cloud providers need scale to make money so I doubt if we will see cloud solutions for places, like France, Italy or any of the other European countries moving in the direction of self regulation.
Ironically, this may lead to the question of economic viability of these for most iGaming providers. We are already witnessing the exit or opt out of iGaming providers in the French and Italian markets due to cost consideration. The adoption of the cloud by iGaming providers will further reinforce this trend.
In conclusion, hosting iGaming operations in the cloud make sense from a cost saving perspective and a regulatory perspective.
The real question is not should iGaming businesses host in the cloud it is when will they start and what hosting provider(s) will take advantage of the business opportunity.

jack smith said...

Social game companies have been some of the early adopters of the cloud realizing that the cloud can offer them just in time server and DB storage to address spikes that online games normally experience. In addition, social games can a have a very short half life growing quickly and then fading into the history books in only a few months.You can also visit :-
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