China’s Gaming Restrictions Lead to Slump in Cloud Usage

Published · Nov 18, 2021

Earlier this year, China limited minors to three hours of gaming per week. Some unintended side effects are now being felt—not by the children but by cloud providers. The heavy drop in gaming has caused a slump in cloud usage in the nation.

According to Canalys CEO Steve Brazier, between 25% and 30% of China’s cloud capacity was used for gaming. Now, with a drop in usage, cloud providers are trying to figure out what to do with the extra space. Some have reportedly deferred data center builds as a result.

Brazier went on to discuss the impact a hopefully waning pandemic will have on cloud tech at large. He predicts an increase in usage but warns that vendors will have to be selective about which orders they fill, as the boom may outweigh demand, at least outside of China.

Inopportune Timing

Cloud tech as a whole has been going from strength to strength. American services consistently top the lists of best cloud providers. They, in particular, have been winning big with a number of government contracts in the US and abroad.

The cloud slump attributed to the gaming restrictions is a blow to Asian providers like Alibaba that want to stay competitive with their western rivals. That’s not to say they’re losing ground, however.

Services like cloud storage are still very much in demand, and businesses are eager to make the jump to cloud tech. It’s just game server hosting that’s feeling the burn. It is significant, though, as gaming is a multi-billion dollar industry. The widely played Fortnite recently shut down their Chinese servers.

It remains to be seen how services will adjust to these new conditions and how they might use the freed resources.

Garan van Rensburg
Garan van Rensburg

Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.