Ericsson: ‘Cloud gaming represents the full potential of 5G’

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Of the 106 CSPs with 5G services, 22 have announced mobile cloud gaming services, reports Ericsson

The November Ericsson Mobility Report included a dedicated mobile gaming section, where it explored the new business opportunities emerging in this space as a result of 5G and cloud computing.  

By running a game on a nearby server and streaming it to the player, cloud gaming frees the player from the confines of relying on a computer or console with powerful graphics and hardware to play a game. But, in order to achieve the best cloud gameplay experience, low latency and high-speed connectivity are required. Fortunately, 5G is expected to deliver those things for cloud gaming, as well as be able to handle the high data demands expected from gaming platform subscribers.

According to the report, 106 communications service providers (CSPs) have launched commercial 5G services, and of those, 22 have announced mobile cloud gaming services. The majority of those CSPs are offering gaming as a separate subscription to a gaming service in partnership with a cloud gaming provider, while the rest — only three — are offering it as a service bundled with a 5G data plan.

Mobile gaming is an impressively huge market, especially considering that isn’t been on the scene for very long. About 50% of the total gaming industry revenue can be attributed to mobile gaming, 1 and there are currently more than 2.4 billion mobile gamers around the world. Asia has come out on top, with the region racking up more than $41 billion in mobile gaming revenue.1 

Another way to think of mobile gaming’s dominance is that in 2019, 33% of all global smartphone app downloads were related to mobile games, accounting for 74% of all consumer expenditures for Android and iOS operating systems. 3 

Video game consoles have seen a sale of roughly 40 to 50 million units worldwide over the last three years, while incremental 4G subscriptions have averaged 685 million over the same time period, so the device base for smartphone-based games far outweighs that of console gaming. And once 5G really comes to fruition, that lead will only increase, with the number of 5G smartphone users expected to increase from about 200 million in 2020 to over 3 billion by the end of 2026.

Network latency — or lag, as they say in the gaming world — is probably one of the most critical challenges faced by mobile gamers. When it comes to first-person shooter games and fast multiplayer interactions, in particular, the latency requirement for end-to-end network latency is 20–30ms and there needs to be around 99.9% reliability in both uplink and downlink.

While there is general agreement that 5G will deliver on this gaming need, some remain skeptical, such as Subspace’s CEO and Founder Bayan Towfiq who told RCR Wireless News that 5G only addresses the last mile of the network, and not the middle-mile challenges, which is where many of the online multiplayer gaming hiccups take place.

“What we’re seeing is that because of middle-mile performance issues, in places like the Middle East, three-quarters of the population is outside of playable range for competitive multiplayer games. And in Europe and North America, it’s still one-quarter of the population that is outside the playable range,” he said. “And this is all due to middle-mile issues, not last mile ones.”

In a ConsumerLab study, based on an online survey with 7,000 consumers, 90% of those who play video games at least weekly were negatively affected by lag when playing, with at least one in three sometimes quitting as a result.

However, with 95% of gamers saying they’re willing to pay more for a service if it means a better gaming experience, mobile gaming certainly represents a key business opportunity for CSPs, who according to Strategy&, have five different ways to ‘play the game,” including four strategies that involve playing along the value chain for core activities, and an additional way to play that focuses on launching eSports entities.

“Cloud gaming represents the full potential of 5G for both consumers and businesses,” wrote Ericsson in its report. “Gamers benefit from enriched experiences, including lighter and more affordable gaming devices, a longer battery life and new immersive gaming experiences, while communications service providers get a wide range of new business opportunities.”

1 Dot Com Infoway

2 Statista

3 App Annie, “The state of mobile 2019”.

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