The cloud gaming revolution is here and it's coming to a device near you. And for operators, it's a revolution they can't afford to miss.
The electronics games industry is massive, with healthy profits and countless millions of committed players all over the world. According to Mark Newman, chief analyst at the TM Forum, gaming is the fastest growing sector of the entertainment industry and is now worth as much as $150 billion a year.
Around ten years ago, when mobile gaming first emerged on the scene, there was speculation that the mobile device could become the major source of gaming revenue in the coming years. Not only is that prediction taking a while to come to fruition, so far the operator community has not been able to capture much of that revenue itself. The vast majority of mobile games are played offline and even those that are played online are ones that require no special treatment from the network.
Of course, mobile devices are perfect to deliver mini-games, puzzles and word games to keep us entertained on our daily commutes. Players fire off a few angry birds, endlessly rearrange building blocks, or complete crosswords on their journey from school or work before getting down to some serious games business on their PC, PlayStation or Xbox at home.
The issue has been that the mobile device itself was not really in a position to rival the console market because the devices can't deliver the required quality of graphics or processing power to run today's complex, real-time, multi-player games. What's more, current mobile networks can't guarantee network availability nor the low latency required for the real-time experience the gaming community demands.
However, this situation could change -- and fast. Cloud gaming services promise to stream a full-fledged gaming experience to your device, enabling your smartphone or tablet to handle the bit of the game you are currently playing without needing to store the whole multi-faceted experience natively on the device. And importantly, some of the biggest brands are lining up to challenge the business model of the console games market -- with first mover advantage belonging to Google Stadia and its subscription-based business which launched in November.
Stadia launched with the wildly successful Assassin's Creed in its portfolio, and that means some of the biggest and best games could now potentially translate to mobile screens and devices. The bottom line is that with 5G, there is a real opportunity for mobile operators -- who understand pay as you go and subscription models -- to take a more meaningful slice of the gaming market.
However, carriers should focus on where they can add value in this industry. The specialist gaming consoles and handsets -- and of course the games themselves -- will always be the preserve of the OTTs and the industry specialists; but the network itself is the domain where the service providers can provide a much-needed benefit and add value to the experience.
Because in order for cloud gaming to work, standard broadband mobile internet will not be enough. The service, by its very nature, requires low latency and high reliability -- core capabilities that only 5G can deliver over a mobile connection.
For cloud gaming to become a source of revenue for mobile operators, the networks will need to deliver the type of real-time, responsive video feed that is paramount to game play -- the sort of feed that online gamers get from their fixed line connections and carriers. When it comes to hard-core gamers, especially those investing time in multiplayer games like Fortnite, low latency isn't a "nice to have" -- it's essential. This is not like watching video, where a few seconds of buffering is frustrating; this buffering means you lose the game and the player never relies on your connection again.
Here's an example of required latency by format:
Building a stand-alone 5G network that provides low latency for every connection makes no sense either commercially or technically. It would be cost-prohibitive, under-utilized, and vastly over specified for the majority of use cases -- such as enhanced mobile broadband. The solution lies in the 5G's unique network slicing capability which will enable different slices of the network to have different SLAs that are dynamically allocated as needed.
Slicing is the most effective way for network architects to maximize the physical network resources, virtual network resources, connectivity and bandwidth to deliver different levels of guaranteed service. A network "slice" can be customized to meet the specific needs of the applications it is serving -- meaning a gaming slice can be given the bandwidth and processing power it needs to deliver low-latency gaming to any mobile gaming device. But network slicing is not part and parcel of today's 4G transport network infrastructure being utilized for delivering 5G in non-standalone mode.
In other words, only those operators adopting true stand-alone 5G networks with transport capabilities matching that of the new radio, and quickly embracing the concept of network slicing will have real first mover advantage.
Indeed, analysts at CCI Insights recently predicted that by 2021, some ten mobile operators worldwide would be offering new data price plans that guarantee low latency as a selling point for gaming. With the earliest cloud gaming models also based on subscriptions, you can easily envisage a revenue-sharing model -- between app developer and operator, similar to the online music market.
Of course, both cloud gaming and 5G networks are in their infancy. But those operators waiting for the perfect true 5G use-case to emerge may be ignoring the game about to unfold on screens all across the world. It's true that the launch of Google Stadia has not been without a bump or two, but other players are entering the market and the global potential is massive.
Those operators with a game plan to build a low-latency mobile playing field of dreams will be the ones where the gamers come to play. And that means they will be the ones best placed to pick up a game-changing slice of the world's fastest growing entertainment market.
— Hayim Porat, CTO, ECI Telecom