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Playing a video game by streaming it live to your computer or phone may sound like something only countries in North America and Europe can do, but Indian networks can already handle it. At least one startup already serves several thousand customers via regular broadband connections at home.

In the industrialized west, this is a service offered by Microsoft’s xCloud and Google’s Stadia. In India, however, a company that seems to offer on-demand PC games is The Gaming Project, a New Delhi-based startup that raised $500,000 in seed funding in June.

The funding round is clearly a long-term bet, as India’s internet, while cheap, isn’t exactly known for being very reliable. According to data by Ookla, the company behind Speedtest.net, India’s mobile internet ranks at number 118 worldwide, a remarkable figure given the massive amount of data Indian mobile internet users consume.

So how does cloud gaming even work in India, let alone raising half a million dollars in funding?

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Cloud gaming is a very challenging puzzle to solve. Unlike a TV broadcast or a live streamed video, each user should get a unique and personalized experience where even milliseconds of delay count. From a user’s device that is reliably connected to their home Wi-Fi network, to their ISP that has a reliable connection to the data center where games are actually displayed, there are many things that should be good for cloud gaming. An example of things going wrong is Google Stadia, which had nearly 4 times the normal input lag of a local machine and “oddly smoothed out video, almost like an over-aggressive anti-aliasing filter,” as sampled by a YouTube reviewer.

Where services like xCloud and Nvidia Geforce Now have been around for a while, India has been lagging behind in cloud gaming for a while. This can most likely be attributed to providers of such services targeting North America, where they already have the infrastructure required to support cloud gaming.

Wireless telecom providers generally cannot support these services in India as distant cell towers connected to hundreds of devices at once cannot guarantee the speed and reliability required by cloud gaming; but telecom companies have pointed to the next-generation 5G networks as the leap forward that will allow them to address that hiccup. Carriers in India have dedicated a whopping Rs 1.5 lakh crore for purchasing 5G spectrum, which will be rolled out sometime in the coming months.

But cloud gaming isn’t waiting for 5G in India — thousands of people have already played a game streamed to them over a home connection. Remember how Indian mobile data rates are ranked low? Home broadband connections do much better, with India ranked 72 globally by Ookla, averaging 48Mbps, more than enough to support decent-looking cloud gaming (under the right circumstances).

Fixed ISPs have a lot of bandwidth to offer because they don’t have to buy expensive wireless spectrum and can transport data over fiber or copper cables. Data limits have also grown, with most Class A ISPs rated by Entrackr with a data cap of 3,300 terabytes before they start throttling speeds even on lower tier plans.

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As a percentage of the data cap, Indian broadband users at home don’t devour data like their mobile internet counterparts. Data from Hathway, one of India’s largest broadband providers, showed that internet usage per user actually turned down slightly during the COVID-19 pandemic, even as more professionals were working from home. That’s a surprising statistic, but makes sense given that many new broadband users have moved away from using just mobile internet, previously accustomed to modest data caps on cellular plans.

For all these reasons, home broadband users have a huge advantage in accessing cloud gaming, and ISPs have the bandwidth to support it. But that is not everything.

The economics of gaming in the cloud are also attractive. While India is a mobile-first gaming country, the personal computers market is: growing year after year fast. But the long-awaited big-budget games — AAA titles, as they’re called — are getting more demanding with their graphics and system requirements, and the average budget PC sold in India largely can’t do them justice, if they can run them. not at all. Sony’s Spider-Man port has recommended requirements, including a 1060, putting the price to run the game around 50,000 rupees.

Well-implemented cloud gaming can undermine that weakness, however, as games don’t need to be rendered locally and a single graphics card can be used by multiple players throughout the day, reducing costs for each player.

Gaming cafes – facilities with several high-end PCs dedicated to running demanding video games – have proven to be an alternative solution, but it’s a difficult business to run, as they have to pay for prime commercial real estate and depend on constant interest from players who often show up in person. The pressure can prove disheartening – Arknemesis Gaming, a Chennai-based gaming cafe that used to be India’s largest, has been closed during the pandemic and never reopened.

Cloud gaming relies on a shared infrastructure that is running out of data centers to serve other customers, so costs are minimized and socialized.

Despite these theoretical advantages, cloud gaming in India has not taken off. But investors are clearly interested in building the runway to do this. And surprisingly it works.

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Gaming Project is arguably the largest cloud gaming service provider in India right now. But the company, billed as the “Netflix for Games” by one of its co-founders, can’t compare its user base to the movie and TV streaming giant. (The business model isn’t exactly the same either; gamers have to buy licenses for games on platforms like Steam before they can actually play them, unlike Netflix, where all titles are included as part of the subscription.)

But TGP is developing surprisingly well for a service that most people don’t even know is possible or available in India – said Sarang Atri, one of the company’s co-founders. Entrackr that the service has signed up 350,000 users to date.

Atri said the service has attracted a lot of interest from gamers in Delhi, Mumbai and Bangalore, where it currently operates data centers; these were users who, as Atri put it, had a passion for playing PC games but had a limited budget to buy the hardware needed to run them. High-end graphics cards and processors made by companies like Intel, AMD and Nvidia have become more expensive over the years, due to a depreciating Indian rupee, higher taxes and demand from cryptocurrency miners picking up essential hardware, to name a few. not to mention the ongoing global semiconductor supply crisis. While prices for AMD GPUs have fallen to the ground in recent months, the starting point for high framerate AAA gaming is still quite high, even at resolutions like 1080p, where a 6600 will set you back close to 35k.

Although The Gaming Project contains a very limited number of games for paying subscribers, the savings on hardware alone are already beneficial for the economy. Entrackr tested a few games on internet connections in Bangalore and Chennai, and found that, except for a few hiccups, they worked well for the most part.

Atri said even the introductory price, which the company plans to raise at some point, is revenue neutral for the company and expects to be profitable soon. But the business model faces a looming threat: global technology conglomerates.

Sony’s PlayStation Plus Premium, Microsoft’s xCloud, and Google’s Stadia are all yet to be released in India. But the companies behind them already have an extensive presence in India, with the marketing power to give The Gaming Project a shot if they decide to expand into India. These services also offer an extensive catalog of games included with cloud gaming subscriptions, something TGP doesn’t offer. Microsoft has repeatedly said it plans to launch xCloud in India soon, but has not provided a timeline.

Atri admitted that half a million dollars may not be enough to cope with these companies. But he said that even in the event that they enter the market, the company’s first mover advantage would help the company in an unexpected way. Over the months, TGP has adapted its software to stream optimally in the typical Indian broadband connection, based on data that only it has.

“These guys [Microsoft, Sony or Google] come in and bully me, but I will always have the opportunity to sell my software to them,” said Atri. Perhaps just the extra comfort his early investors needed to jump in and play.