Why Are Online Gaming Companies Turning to Cloud Hosting Companies and Managed Services?

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Click to learn more about author Lex Boost.

Online gaming companies continue to take the world by storm. The gaming companies themselves handle an increasing amount of the heavy-duty processing and connectivity, which is great for gamers. Players finally get to ditch bulky consoles and boxes and play on smartphones, tablets, and other mobile devices.

But this switch in requirements and responsibility for processing power comes with a heavy price tag. Gamers used to just ‘suck it up’ if their hardware or network connectivity was below par, but now the issue of latency or lag has been deposited at the door of game producers. If performance falls below expectations, gamers will switch to a different platform.   

As a result, the online gaming industry now requires the kind of backend infrastructure, global connectivity, security, and processing power more commonly associated with the needs of the banking and finance, healthcare, and online retailing sectors. It shouldn’t come as a surprise, then, that online gaming companies –like the industries mentioned above – are turning to hosted or managed services.

Performance at a Lower Price Point

It’s literally ‘game over’ if a player’s experience is anything less than flawless. Noticeable lag or latency is not acceptable, although some games (and gamers) can tolerate a degree of delay. However, in general terms, online gaming companies strive for a less-than 40ms ping, with a 10ms ping (which is 0.01 seconds) considered the gold standard. 

Processing power like this doesn’t come cheap – unless companies choose to deploy dedicated hosted and managed servers. Otherwise, massive upfront investment is needed to build a global bank of high-performance servers with the necessary GPU processors. And this isn’t just a single outlay. The pressure to maintain a state-of-the-art backend infrastructure means regular investment to update and replace servers when newer technology comes to market. This presents a significant problem for start-ups and smaller online gaming companies who are seeking to compete in an industry dominated by corporate giants such as Google, Microsoft, Sony, and Apple. How do they close the gap?

Global Presence, Scalability and Agility

Online gaming is genuinely global. That’s what players love about it. It doesn’t matter where you play; you can connect with fellow gamers and enthusiasts in a worldwide online community. While the gamers themselves can enjoy freedom of movement, online gaming companies have to be incredibly strategic when it comes to the location of their servers. This is because server location can have as significant an impact on their product’s performance as the actual server configurations. 

As a rule of thumb, online gaming companies need to locate their server clusters or data centers in locations where their games are most frequently played. There’s no one-size-fits-all global gaming server location map – it very much depends on each game. However, online gaming companies typically look for server locations in the USA, China, Japan, South Korea, Germany, and the UK. These countries are the biggest markets in terms of online gaming revenue.

It’s not enough, however, to have a static network in place. Gaming networks’ other backend infrastructure must have the agility to scale at short notice –  when a new game is launched or significant platform updates are brought to market, for example. In these situations, it’s not uncommon to need an additional 400 or 500dedicated servers in multiple global locations in just a couple of weeks. Hyper-scaling in this way can quickly become cost prohibitive and a logistics nightmare for online gaming companies that utilize their own global networking resources.

Privacy and Security

Online gaming companies are also selecting managed security as a crucial part of their private cloud hosting packages, with options including Security Information and Event Monitoring (SIEM), DDoS IP protection, and penetration testing. This is a very sensible strategy as DDoS attacks carried out against online gaming companies are on the rise. Recent targets include Japanese game developer, Square Enix, as well as EA, Sony, and Microsoft. With attacks lasting as long as 24 hours, online game and platform developers can’t afford to become victims.


At a first glance, it seems strange to compare the computing and infrastructure needs of the online gaming industry to those of the banking and financial services sector or other industries traditionally associated with mission-critical requirements for lightning-fast processing speeds and bulletproof network resiliency. But I hope this article demonstrates that, when it comes to computing and network resource requirements, these industries are not as far apart as you might imagine and their hosted and managed services needs are much more closely aligned than first imagined.

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