GeForce Now: Nvidia implements aggressive pricing to consolidate cloud gaming position PDF Free Download
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Publication date:
04 Feb 2020
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Omdia Analyst, Analyst
GeForce Now: Nvidia
implements aggressive pricing
to consolidate cloud gaming
position
GeForce Now: Nvidia implements aggressive pricing to consolidate position
Nvidia has announced that its ‘bring your own games’ cloud gaming service GeForce Now is to come out of
limited beta today and that all 300,000 existing beta users will transition across to a free membership tier.
The company will also introduce a premium membership with the first 3 months for free and a
comparatively low $4.99 a month, a special introductory price guaranteed for the remainder of 2020. The
free membership product strategy solves the hurdle of maintaining the active userbase of GeForce Now as
the service transitions across from beta to a full commercial offering, although there are limitations to the
free tier which won’t please everyone who have been using the beta service.
‘Founders’ premium subscribers will get priority access to servers, will be allowed to stream for up to 6
hours per uninterrupted session (versus 1 hour for free members) and get access to the latest RTX ray
tracing GPU-based servers in the cloud as they become available.
I expect the premium subscription pricing to increase, potentially to something like $9.99 a month, at the
beginning of 2021, but at the current price point and 3 months free, conversion rate from free to paid is
predicted to be high. GeForce Now effectively straddles the use cases of existing gaming PC users that want
access to their games on screens away from their PCs and also those gamers that don’t have access to a
gaming PC. Nvidia’s stated ambition is to grow the GeForce Now membership across free and paid accounts
to 1 million as rapidly as possible, and I expect that to be achieved during 2021.
GeForce Now: Nvidia implements aggressive
pricing to consolidate cloud gaming position
01
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What is the immediate impact of this aggressive move?
Two main types of subscription service have emerged from the cloud gaming landscape: cloud gaming
content services which include games as part of a monthly subscription, and ‘bring your own games’ (BYOG)
cloud gaming PC services which charge a monthly subscription for access to a gaming PC in the cloud.
Content-based services such as Sony’s PlayStation Now, have a dominant share of the total cloud gaming
market, a trend I expect to continue, but Nvidia’s low cost service launch will certainly broaden appeal of
BYOG services.
In terms of users, the beta version of Nvidia’s GeForce Now was already by far the largest BYOG service
operating globally with 300,000 users and a waiting list of 1 million. With its commercial launch, Nvidia will
rapidly gain a chunk of the BYOG cloud gaming market even with a free tier alongside low monthly pricing –
I forecast GeForce Now will have 17% share of the $57 million BYOG cloud gaming PC subscription market in
2020.
In subscriber number terms, by the end of 2020 GeForce Now is forecast to have 280,000 premium
subscribers and to be significantly bigger than the current front runner, Blade, which operates the Shadow
service in the US and Europe. Shadow currently costs $35 a month in the US for access to its cloud gaming
PCs, so Nvidia’s launch will have an immediate disruptive impact on Blade’s competitiveness. In fact,
Nvidia’s aggressive pricing move will put a squeeze on all other BYOG services across North America,
Western Europe, Russia, South Korea and Japan.
Nvidia’s decision to adopt a free membership tier is likely a response to Google, which is set to launch a free
version of Stadia sometime during 2020. Google has faced criticism for its lack of supported games, so
Nvidia’s BYOG service, which currently supports instant play of over 300 of the most popular free and
premium PC titles and over 1,000 other games which can be selected for single session install, is a
significant competitive threat.
Profit is the last thing on Nvidia’s mind
GeForce Now: Nvidia implements aggressive
pricing to consolidate cloud gaming position
02
© 2025 Omdia. All rights reserved. Unauthorized reproduction prohibited.
A cloud gaming service with free membership and no supporting monetisation model such as advertising,
no revenue share from content sales, and a low-cost premium subscription too low to cover the cost of
usage means that GeForce Now will not be delivering a profit for Nvidia any time soon. Indeed, the cost of
ongoing service delivery, investment and maintenance of infrastructure will mean significant ongoing cost
to Nvidia. As such, this is not a sustainable commercial business model and is primarily about moving rapidly
and consolidating a significant presence in the GPU-based cloud opportunity. In time, Nvidia will be
prompted to introduce other forms of monetisation and increase subscription costs if it wants to generate
any sort of margin.
What is driving Nvidia's cloud gaming strategy?
Like other gaming PC component companies, cloud gaming has the potential to disrupt Nvidia’s existing
business. Generally, cloud gaming could progressively shift the balance of the acquisition of PC gaming
hardware from the end-user to the datacenter, may even drive additional hardware sales if demand
spreads more widely, and Nvidia needs to make sure it is well positioned to follow this transition and take
advantage of it. In this sense it’s a strategic move that pre-empts this market shift.
However, Nvidia’s GeForce Now strategy goes beyond preparing for this market threat. The potential
broader industry disruption caused by cloud gaming services – to console companies, and PC gaming
storefronts for example - also allows companies that previously had a limited role in the games value chain
to expand their influence.
Nvidia sees an opportunity in providing its own GPU-based cloud and building a service business on top of
this infrastructure. Nvidia operates nine datacenters across North America and six across Western Europe.
Where it has limited datacenter coverage – Russia, South Korea and Japan for example – it is partnering
with local telcos to deliver GeForce Now. This telco partnership strategy aligns strongly with the roll out of
5G services especially in mobile-first markets such as Japan and South Korea.
Games may only be the start. Demand for GPU-based servers across high performance computing, AI,
desktop virtualisation, and analytics applications are on the increase, so gaming may act as a trojan horse
for Nvidia’s broader push into specialised cloud services. As other technology companies have found,
tapping into the service opportunity offers a more stable revenue stream, and often has a better margin
than physical products.
Are publishers happy to support GeForce Now?
While GeForce Now supports 100s of top PC games, during the service beta numerous games have had
their support dropped or removed due to publisher requests. The increasingly complex landscape for PC
content release windowing, exclusivity and PC storefronts is likely to generally decrease the availability of
games on ‘open’ BYOG cloud gaming services like GeForce Now moving forward. This will be exacerbated by
publishers and storefronts evolving their own direct-to-consumer cloud-based services. It’s also possible of
course that GeForce Now could itself be leveraged as a distribution channel by third-party gaming services,
in a similar way to Ubisoft’s Uplay+ which is coming to Google Stadia, and that could lead to a B2B revenue
stream for Nvidia.
03
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