You do not have to spend very long skimming through stories about 5G and the applications that the new technology will enable before mobile or cloud gaming makes an appearance. Countless articles, blogs and briefing papers have referenced 5G's low-latency capability as a key factor to enable a mobile gaming market.
But so far, nearly all the 5G networks deployed around the world have been of the "non-stand-alone" variety, where the 5G radio path uses existing supporting infrastructure and is not capable of delivering either the network slicing capability that is central to 5G, or the dedicated ultra-low-latency connections that are crucial for the cloud gaming experience.
The reality is that until 5G networks become "stand-alone" – supported by a packet optical transport infrastructure capable of handling network slicing and low-latency end-to-end connections – the high end, high value part of the mobile and cloud gaming market will remain out of reach, and the theorists will lack the proof of their argument.
With that in mind, we asked some 5,000 dedicated gamers what they thought about the potential for 5G technology and gaming. We wanted to see whether the technology potential was matched by market expectation or demand.
We surveyed regular, committed gamers in the UK, the USA, Germany, Japan and South Korea. And the first thing to say is that not only are the ardent gamers aware of 5G, they are also aware of what it could mean for them. What's more, that awareness spells very good news for those in the mobile operator community ready to make the move to a stand-alone 5G network.
For a start, an amazing 79% of the gamers would seriously consider replacing their home broadband and mobile contracts with a new 5G contract in order to gain a better gaming experience. In addition, 95% of that group said they were prepared to pay more for that experience.
The potential revenue from communications in the gaming community is certainly significant. According to the data we collected, the average amount paid by a dedicated gamer for their broadband and mobile contract is $84 a month. Nevertheless, some 60% of the gamers would pay at least half as much again for a 5G contract to replace both.
The market potential is therefore enormous – after all, gaming market insights company Newzoo estimates that there are some 2.7 billion gamers in the world, and they will spend $159 billion on games alone this year. In fact, on games, accessories and connectivity, they spend more than $260 a month so you can't doubt their commitment to their passion. Which means, when our survey shows such willingness to pay more for better connectivity, it rings true and carries real weight.
We estimate that the 5G mobile gaming connectivity opportunity for the operators is worth an extra $150 billion in incremental revenues. On top of that, if operators use 5G to launch a fixed wireless service or develop offers that bundle a cloud games subscription alongside the mobile tariff, then the value-added revenue opportunity is even larger.
We've turned our survey results into a free white paper on the 5G cloud gaming opportunity that you can download from our website. Aside from the revenue opportunity outlined in the paper, it also includes evidence that shows just how informed the ardent gaming community is regarding their connectivity requirements. These gamers are fully aware of their Ping rates and recognize that if latency rates exceed 30 milliseconds, the gaming experience suffers.
In fact, only 7% of the gamers we surveyed believed that they currently receive the optimal low-latency rate of less than 10 milliseconds required to enjoyably play cloud games online. Again, this level of knowledge about what it takes to deliver the best gaming experience, coupled with an awareness of the 5G promise – 83% of those surveyed felt 5G will make cloud gaming more compelling – gives further credence to the strength of the operator opportunity.
True standalone 5G is capable of exponentially outperforming the gamer's current mobile and fixed connectivity experience. Faster download speeds and latency as low as one millisecond makes for an extremely attractive proposition. So attractive in fact that 58% of our 5,000 ardent gamers said they would switch, as soon as they possibly could, to a 5G provider offering a high-quality, bundled gaming subscription.
The evidence from the potential user community is clear. The cloud gaming market is more than analyst opinion or marketing hype. There is latent, unfulfilled customer demand waiting to be satisfied. Those service providers that invest now in flexible, upgradable, packet optical solutions can capitalize on incremental revenue opportunities available for low-latency connections both now and in the longer-term.
— Patrick Joggerst, CMO and EVP, Business Development, Ribbon
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