Mobile cloud gaming trends
Cloud gaming is a new way of consuming video games that is set to grow significantly over the next five years. The ultimate goal is to allow people to play any game on any device as long as they have a good internet connection. This is possible because the games (hardware and software) are hosted in remote data centers, from where the game is streamed to the player’s device. Cloud gaming can therefore significantly reduce the costs of retailing, packaging, delivering hardware and improving ease of access for gamers. The development of new consoles slows down or comes to an end. This in turn places high demands on the connectivity network, especially in the case of mobile cloud gaming if the user experience should always be good and when the evolution towards Augmented Reality (AR)/Virtual Reality (VR) takes off. with even higher demands.
Communication service providers must consider different types of gamer segments, such as casual, occasional, regular and hardcore gamers, where hardcore gamers spend more hours and money.
The slicing proposal for mobile cloud gaming players
Standalone 5G, SA, the foundation on which network slicing is built, will allow gaming services the right end-to-end (E2E) performance unlike 4G or Wi-Fi. This gives the opportunity to offer an attractive performance guarantee for both gamers and other players in the value chain.
Although generally centered on reliability, the slicing proposal is nuanced according to player segments. We believe slicing has the greatest potential for the casual and regular gamer segments.
The main reasons for this are that decoupage offers:
- A guaranteed high-quality experience without the need to invest in additional and expensive equipment like gaming PCs or a console
- Reliability on the go
- Ability to easily activate and deactivate the high-quality game service as needed under an a la carte service model (not tied to a long subscription contract)
The cloud gaming value chain consists of several segments that can all benefit from network slicing. First and foremost are game service providers like Steam, NVIDIA with GeForce, Now, and Blacknut, which could increase demand and scale through bundles with CSPs. The same goes for game publishers and developers, such as EA Sports and Ubisoft, who see an opportunity to scale games as the console market becomes saturated with less innovation.
Business models for communication service providers
Today’s game offerings are primarily based on a resale and revenue-sharing model using operator billing. However, there are already top-tier CSPs looking at QoS-based offerings, especially all the big CSPs in South Korea.
In the future, we see the opportunity to offer offers in two dimensions: either as B2C or B2B2C on the one hand and as premium or bundled on the other hand. This gives rise to four possibilities:
Data Plan Upgrade (premium B2C), where the player purchases a dedicated game subscription to be used for games purchased from game service providers.
In-game upgrade (premium B2B2C), where the CSP sells a slice to the game supplier or publisher, who eventually markets the game as premium with operator billing.
5G game pack (bundled B2C), where the CSP resells the cloud gaming service upselling the 5G+ slicing data plan.
In-game (Bundled B2B2C), where the CSP sells a slice to the game provider or publisher, who markets the game where players get access to the bundled slice with better user experience every time that game is played.
The choice of model depends on the CSP’s strategy, size and position in the market. A major, perhaps global, CSP with many subscribers, an existing game position, and a well-known brand will be in a better position to build partnerships and gain access to the most popular games, which means they are strong likely they could have success with all four models. . Whereas a smaller, local CSP with a lesser-known brand, may likely have a better opportunity in bundles with a greater focus on mass market and resale. That said, it has proven difficult for any communications service provider to compete by creating an own-brand game offering, so the trend is towards partnering and leveraging major game provider brands.
Go to market planning and partners to work with
If we take a closer look at the three main segments of the cloud gaming value chain: cloud gaming service providers/game publishers, game developers/engines, and optimization services, we find that in the ‘together they seek to deliver the best possible content with supreme quality and convenience. live. However, they struggle to provide sufficient quality of service over a mobile network and lack access to network assets. This opens up opportunities for CSPs. The commercialization steps allowed by network slicing for CSP are as follows:
- Define their role in the gaming ecosystem and value chain
- Validate the target customers and select the business model(s)
- Engage partners to help build a solution and deploy network slicing on top of the 5G SA network.
Mobile cloud gaming is believed to be one of many upcoming use cases for 5G and one of the first use cases to be explored at scale and several leading CSPs are being tested today. Our estimates indicate that there is a positive business case. The majority of gamers use mobile platforms, with hardcore gamers spending around 50% of their time on mobile.
For more information and details on all the topics covered in this blog post and more, please read our recently published report Network Slicing Early Business Use Case Series: Mobile Gaming in the Cloud.
Learn more about network slicing
Learn more about 5G for gaming
Blog post: Cloud gaming: enabled by 5G and end-to-end network slicing
Blog post: Ericsson in first global 5G network slicing trial with Deutsche Telekom and Samsung
Blog post: 5G cloud gaming – can your BSS capitalize?