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The promise of 5G’s low latency for gaming

April 21, 2022

asian friends play mobile games together happily in restaurant

Greg Sigel

SVP – North America

The 5G revolution, in the works for more than a decade, is finally here. With higher bandwidths and laser-fast speeds, the pace of growth of the digital ecosystem will explode once 5G networks become the new norm as they soon will in much of the world.[i] However, not all 5G networks in operation currently offer the low latency needed to spur a console-independent mobile-first gaming ecosystem. That will begin to change with compelling use cases, both in the enterprise and consumer categories.

Game publishers are keen to capitalize on this impending wave of growth. Just why, we are witnessing a growing number of partnerships between mobile carriers and gaming companies, the latter of whom will provide compelling use cases for the global 5G proposition and open new sources of revenue by meeting consumers’ hunger for new gaming experiences across mixed reality spaces.

Through bundled 5G data packages, users gain free or heavily discounted access to quality content from some of the biggest content platforms in the world, like Riot Games’ expansive Roblox ecosystem, to the latest leaps in cloud gaming capabilities. Telcos, meanwhile, get the opportunity to court larger user bases and charge higher premiums.

In the US alone, 5G subscriptions are estimated to rise from 15.8 million in 2020 to 167.9 million in 2024,[ii] while global mobile 5G bundling is expected to generate more than US$16 billion in revenue by 2024.[iii]

The consistent delivery of lag-free user experience will pave the way for more captivating, latency-sensitive consumer applications beyond gaming and video streaming. These experiences include greater realism in VR, AR, and extended reality (XR) with lighter devices. As an example, consumers will also be able to have more immersive gaming experiences with realistic features like haptic touch feedback.

The gaming industry consolidates ahead of the 5G revolution

The gaming industry is expected to register US$272 billion by 2030, growing at a CAGR of 11% between 2020 and 2030.[iv] The industry’s growth poses a lucrative opportunity for developers and publishers, and everyone is paying attention, as evidenced by the slew of acquisitions that dominated news headlines in the first months of 2022. Take-Two Interactive, the publisher behind NBA 2k and Grand Theft Auto, made its first push into mobile with a US$12.7 billion purchase of Candy Crush developer Zynga, while Sony announced the US$3.6 billion purchase of Bungie, the makers of Destiny 2.[v]

However, Microsoft’s planned US$70 billion acquisition of Activision Blizzard shook the industry. Through the deal, Microsoft—one of the world’s biggest platform owners—will acquire Activision’s library of blockbuster titles and potentially become the biggest player in gaming.[vi] Whether or not this comes to pass depends on regulators. Still, observers say there is an industry-wide move towards consolidation as rivals look to shore up their content libraries to grow their user base.[vii]

Cloud and mobile gaming to explode

Mobile has become the dominant segment, raking in nearly US$80 billion in revenue in 2020, as compared with PC’s US$37 billion and consoles’ US$45 billion. Mobile gaming has surged in geographies worldwide, led by China, the US, and Japan, accounting for over 60% of global revenues.[viii] However, there have also been notable surges in India, which ranked first in terms of the most mobile games downloaded.[ix]

According to market research firm NPD Group, mobile platforms have found wide popularity among gamers across “all age groups” due to “its accessibility and availability but also the incredible diversity in mobile titles available.”[x]

The mobile gaming segment saw console-first games as scaled-down versions of sophisticated multiplayer AAA titles such as Call of Duty and Fortnite. Since the introduction of 5G connectivity, mobile game response times have plummeted to as low as five milliseconds, leading to hyper-smooth, high-resolution gameplay with slight discernible lag, regardless of the number of concurrent players.[xi] 5G will be crucial to the rise of cloud gaming, an innovative engagement model that allows users to download or stream titles on any platform or device, whenever or wherever they choose.[xii]

A significant factor in mobile gaming’s success has been its strong base of young, upwardly mobile gamers, many of whom have never known a world before the smartphone – but more than that, mobile gaming has appeal simply because it’s cheaper than console or PC gaming.[xiii]

Payments and carrier partnerships will be key

Gaming merchants are already ahead of the curve in realizing the opportunities posed by 5G connections to create increasingly immersive and high-quality experiences for viewers. They will continue to expand their reach into daily life through mobile and cloud services, whether through innovative gaming mechanics or compelling narratives. However, to truly tap into the low latency environments on offer in a 5G-enabled world, game publishers will need to partner with mobile carriers proactively. Making sign-ups and payments in underbanked markets convenient will be as crucial. We can expect direct carrier billing and mobile wallets will find more compelling use cases in the gaming world.

 


[i] Intel. Understanding the Advantages of 5G. Available online at: https://www.intel.com/content/www/us/en/wireless-network/5g-benefits-features.html

[ii] https://vimeo.com/560469438

[iii] https://omdia.tech.informa.com/OM017797/Broadband-Pricing-Interactive-Tracker–2021

[iv] https://www.businesswire.com/news/home/20210625005180/en/Global-Mobile-Gaming-Market-Report-202-Worth-98-Billion-in-2020-the-Mobile-Gaming-Market-is-Forecast-to-Grow-to-272-Billion-by-2030—ResearchAndMarkets.com

[v] https://www.polygon.com/22914859/microsoft-activision-blizzard-sony-acquisitions-consolidation-2022

[vi] https://www.nytimes.com/2022/01/18/business/microsoft-activision-blizzard.html

[vii] https://www.polygon.com/22914859/microsoft-activision-blizzard-sony-acquisitions-consolidation-2022

[viii] https://www.emarketer.com/content/countries-produced-mobile-gaming-revenues-2020

[ix] https://www.weforum.org/agenda/2021/02/why-india-s-gaming-industry-is-on-the-rise/

[x] https://www.gamesindustry.biz/articles/2021-01-19-mobile-gaming-saw-surge-of-new-players-in-2020

[xi] https://www.wired.co.uk/article/bc/ericsson-5g-gaming

[xii] https://www.stl.tech/blog/how-will-5g-networks-spur-innovation-in-the-mobile-gaming-industry/

[xiii] https://digiday.com/marketing/in-asia-and-beyond-mobile-gaming-is-on-the-rise-and-esports-organizations-are-starting-to-take-notice/

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