Mobile gaming has come a long way since the days when we were playing snake on a Nokia phone. Part of this is due to digital transformation, which has enabled the sector to flourish and become the multibillion-dollar industry it is today. With 5G on the horizon, which promises vastly improved end-to-end network performance, Mobile Network Operators (MNOs) and app developers are undoubtedly excited to offer an enhanced gaming experience to mobile subscribers.
According to market research firm Newzoo, mobile gaming on smartphones and tablets is forecast to generate revenues of $68.5 billion in 2019, accounting for 45 per cent of the entire global games market. Of all mobile game revenues, 80 per cent, or $54.9 billion, will come from smartphone games. For many, this might not come as a surprise. Popular games such as Pokémon Go - which reached over 800 million downloads - have shown how popular mobile gaming is. Part of the success could be pinpointed to the game’s integration of both AI and augmented reality, which offers an immersive experience. However, we must be mindful that latency is still a concern. This technology needs to be supported by the network operator so users can enjoy the game and experience without connectivity disruptions. The reality for many users is that the quality of the game or app itself is only part of the equation, the other part is good internet connectivity, which often comes down to wireline infrastructure, which interconnects radios and data centres where accessed content is hosted, even as we move to 5G.
The role of network operators
We expect to see continued growth in the gaming sector, so this is an area that MNOs must have on their radar. Newzoo anticipates that growth in mobile game revenues will continue to outpace progress on rival platforms in the coming years. The advent of cloud-gaming services, such as Google’s Stadia or Microsoft’s xCloud, will help accelerate the move away from consoles and PC gaming into more flexible mobile platforms. Further advancement in mobile, mixed reality and streamed games will be largely down to high throughput and guaranteed low latency delivered by the end-to-end 5G network, over both wireless and wireline domains.
There is no doubt that 5G will bring new innovations to the gaming sector, but MNOs also need to invest in the underlying architecture to make this work. You can have an incredible wireless signal, but if the wireline network connecting you to your accessed content is not able to process your request end-to-end, then your gaming experience will suffer.
Gaming over 5G could provide MNOs with the opportunity to bring to market a brand-new app or product that is far superior in terms of experience and technology – more commonly known as a ‘killer app’. This will provide a way for operators to differentiate their service and recover a greater return on investment than previous generational upgrades. At Mobile World Congress 2019 during Ovum’s Operator Strategies debrief, the analyst firm claimed that video game developers and publishers are more interested in working with MNOs than ever before thanks to the rapidly growing mobile gaming segment.
In a recent industry analyst article examining the threat posed by Google’s Stadia to console gaming CCS Insight’s Geoff Blaber stated, “We predict that a host of mobile operators will seek to position their networks as the answer to the latency problem by putting servers closer to users at the very edge of the network. The form this takes will be fascinating to watch, as some are likely to take a more direct role in the same vein as SoftBank and LG Uplus. Others will make their ‘edge cloud’ infrastructure available to third parties including cloud providers and streaming services.”
The next-generation of game streaming requires next-generation networks, and not just over-the-air connectivity. However, there remains uncertainty about what technologies and architecture should be used for specific parts of the end-to-end 5G mobile network, such as the often discussed (and often hotly debated) fronthaul space.
Over the past 20 years, network architecture has been designed as static with manual processes in place. Architecture still designed in this way will not be able to keep up with the demands placed on it through the tens of billions and connected devices, both humans and machines (IoT). Networks must be able to “slice and dice”, offering performance when and where it is needed the most to continue end-to-end performance.
Measuring success – in the eyes of MNOs
Rolling out 5G will take massive investment from MNOs, and yet there remains some debate over how the operators will recoup that expenditure if subscribers are not excited enough by the use cases. Subscriber penetration for 4G LTE is approaching 100 per cent in North America, but the rest of the world is lagging. Offering subscribers the opportunity to buy an expensive new handset and upgrade to 5G for more of the same cellular experience, but with much lower latency, is not an especially compelling story on its own. In addition, how can MNOs, whose networks ultimately enable mobile gaming success, monetise this and reap the rewards? Most of the revenue raised in mobile gaming is a combination of the app download price, in-app purchasing, and in-app advertising according to app development specialist ironSource.
However, competition is so fierce in the mobile network industry that if MNOs don’t upgrade their networks, and simultaneously provide subscribers with unfettered access to mobile broadband, they risk losing subscribers to rivals. Only when you have a fully end-to-end 5G network, over both the wireless and wireline domains of the journey, will you see the types of speeds required to deliver next gen gaming. No doubt some MNOs will be tempted to take a ‘wait and see’ approach, but there will be an undeniable advantage for the first mover who gets it right.
Brian Lavallée, Senior Director of Portfolio Marketing, Ciena