In the 18th June 2020 issue of Famitsu, Nishikawa Zenji’s column reveals that Sega is currently in research and development for Fog Gaming, which would be a solution to the lag seen in current forms of cloud gaming.

Cloud gaming has players access a virtual console existing on the cloud through the internet, allowing them to play video games without the need for hardware, installation, or updates. In the case of multiplayer games, this also prevents cheating. However, because this relies on internet connections, lag is major problem on the player side. On the business side, the initial cost of having to set up data centers and running cost of having to maintain the equipment and pay for electricity and manpower is a hurdle.

The lag seen by players is a result of the cloud being too far away from them: The physical distance between players and data centers. The solution to this would be to have clouds within players’ service areas, but this would lead to the business side problem of the cost of setting up and running data centers.

Sega’s Fog Gaming is a simple and low-cost solution to both of these problems: By repurposing game arcades into data centers.


Simply installing new servers and computer in arcades would still be costly, and so Sega proposes to turn the arcade machines themselves, which are already computers, most of which have network capability and quite powerful GPU/CPUs, into cloud computers. While it would be difficult to convert existing machines, Sega is considering developing next-generation arcade system boards to be able to adapt to this purpose, which would mean installing new machines in arcades would be synonymous with installing cloud machines. This would also give arcades more purpose as cloud data centers when closed or when there are few customers.

There are currently around 200 arcades owned by or affiliated with Sega around Japan, and the column states that with users automatically being connected to the data center closest to them, this would be able to reduce lag from what is currently a few dozen milliseconds to under one millisecond. This solution brings the “cloud” closer to players, to the ground, turning it into a “fog”, hence the name.

The column states that Sega is planning on extending Fog Gaming to other game companies and industries as well. This would not just mean reduced lag for cloud gaming for other game companies, but also the ability for game arcades to be used as data centers for other purposes, with examples such as virtual machines for businesses, render farms for video production studios or VR/AR listed in the column.

Most of all, this would mean additional income for owners of video game arcades, giving arcades renewed purpose and life as data centers. This would make it easier for existing arcades to survive, and for new arcades to be opened. Nishikawa describes this as turning local arcades into “the town’s own little data center”.

Unfortunately, this is a solution that may only work in Japan and perhaps a select number of countries right now as it depends on the concentration of video game arcades in the country.

There is still no indication of what sort of cloud gaming Sega intends to use this technology for: There is no mention of Sega starting a cloud gaming service such as the Google Stadia’s.

It should be noted however that Sega does already use the cloud in offering certain online games right now such as Phantasy Star Online 2 Cloud, which is a cloud-based version of the MMORPG PSO2. Such cloud-based online games, which involve connections between three parties (the player, cloud server, and game server) could benefit greatly from Fog Gaming.


Fact Check

There is a lot of misinformation regarding Fog Gaming online at the time of this article’s publication, and we have performed a fact check on several prevalent examples below:

・Fog Gaming is a cloud gaming service that streams arcade games to players’ homes

This is FALSE. There is no mention of streaming arcade games in the column: The data centers are described as being applied to cloud gaming and other cloud-based uses in general. Fog Gaming is described not as a service but as a technology.

This would involve renovating existing arcade machines

This is FALSE. The column explicitly says the opposite: That it would be difficult to make existing cabinets adapt to this, which is why the next-generation boards are being developed.

Arcade machines will be powered by cloud computing, meaning that arcade owners would no longer have to swap out machines, or that all the software can be consolidated on one machine with others merely being terminals

This is FALSE. The column says nothing of this sort. If anything, it says that owners will have to obtain machines using the next-generation boards in order to use Fog Gaming.


What does this mean?

Converting game arcades to cloud data centers has ramifications for basically everything that has anything at all to do with cloud computing, albeit only in countries where this is feasible (i.e. where there are many arcades).

The technology is still in research and development and will ostensibly be applied to the next generation of arcade boards, so it will not be something seen in the next year or so, but the ramifications for cloud computing have potential to be massive: While only around 200 arcades are affiliated with Sega, there are thousands of arcades in Japan altogether (over 4,000 as of 2017), and converting them to data centers would make a massive amount of processing power available to the cloud.

Additionally, depending on how much income the data center stuff brings in, if expanded to other countries this might even mean that it becomes feasible for more arcades to be opened in countries where they typically are not.

Furthermore, while there are still thousands of video game arcades in Japan, the 4,000 as of 2017 is less than one-fifth of the peak of 22,000 in 1989. The number of arcades in the country has been dropping steadily ever since, with there being 14,000 left in 2000, and 7,000 in 2010. If Fog Gaming goes well, it may give arcades a much-needed boost in income to remain feasible.


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  1. Hi Johann, thanks for this clarification about Fog Gaming. Apparently, the idea involves turning arcades into general purpose data center rather than “remote arcades”, is that right? At this point, I wonder what the implications would be for gamers and arcades specifically: I understand how the system can provide a form of additional local support for existing cloud services, but technically speaking, the infrastructure can also be used to establish local networks for city-scale content streaming.

    • I mean, I understand the additional income for existing arcade managers, but left at the data center thing, the idea sounds painfully underutilized.

      • Hello! The column does not go into much detail regarding what these data centers would be used for, aside from reducing lag in cloud gaming (while not mentioning precisely what sort of cloud gaming this would be; there is no mention of Sega intending to start its own cloud gaming service, let alone an arcade one) for the game industry, or in the case of other industries virtual machines in business, render farms for video production studios, and possibly VR/AR.

        The author of the column Mr. Nishikawa got permission from Sega to write about this tech, but it has actually not been officially announced by Sega yet, so they’re probably still ironing out the details.

        • Thanks for the reply! So it’s very much an in-flux thing. SEGA is saying “look, we can put this technology in place with our arcade machines”, but the possible uses are still up in the air. A bit… vague for the hype it received from the Japanese press. I guess time will tell.


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