Some reports have suggested that the video game industry hasn’t been doing so well in recent months. Video game-related sales from retail locations fell 25 percent in October, representing a foreboding outcome for the 2012 holiday season. It’s not time to hang up the Nintendo Wii controllers just yet, though, as something else may be able to explain the seemingly unimpressive performance: the proliferation of cloud gaming.

Casual game developer and publisher Big Fish Games outlined a rough history of the technology in their Rise of Cloud Gaming Infographic. Becoming highly popularized in the last couple decades, the concept of streaming video games over the web is not a new one. One of the first examples of using a network for gaming comes from Maze War, a program developed by NASA in 1973. However, the first title to use the internet came 10 years later in the form of a slight simulator called SGI Dogfight.

These early models were limited in scope, but they set the stage for massively multiplayer online games. As the one with the largest peak base of subscribers approximately 12 million users, it’s likely that World of Warcraft created a healthy appetite for cloud storage among video game developers.

The game’s popularity isn’t the only factor that is bringing the gaming industry’s attention to the cloud, however. Bandwidth is one of the biggest barriers to streaming services, and graphically intensive content is notorious for high performance demands. As Big Fish noted, broadband penetration in the United States surpassed 50 percent shortly after 2004. This meant a much wider audience for cloud gaming, and new technology initiatives such as NVIDIA’s cloud-based graphics card. Researchers predict continued growth for the streaming games industry, with the market expected to reach $8 billion by 2017.

The moral of the story is that players shouldn’t mourn the loss of angry birds, but should instead expect to see more options coming to the cloud. As high-bandwidth options such as Google’s Fiber network become more readily available, there is likely to be a larger amount of rich content that can be streamed.

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