Mobile gaming is already big business. A new generation of cloud streaming and electronic sports (eSports) platforms are poised to expand in both usage and popularity in tandem with the emergence of low latency, 5G cellular networks.
Market research company, Newzoo, estimates that the global games market will generate revenue of US$152bn this year , up 9.6% on 2018, as the US pushes past China to become the single largest market. It estimates that mobile gaming remains the single largest gaming segment by revenue, accounting for almost half (49%) of the total. While Newzoo and others (including Ovum) see an ongoing consumer shift from browser-based games to boxed PC titles, and to new consoles like Microsoft’s Xbox One X and Nintendo Switch, they also recognise the promise of cloud gaming and its potential to extend the market for premium games even further beyond the current console and PC audience.
Google Stadia’s cloud gaming service is a prime example of where 5G networks can play a pivotal role in enabling fast, high definition games on mobile devices, capable of streaming games up to 4k resolution at 60 frames per second from multiple hosting locations around the globe. Players can purchase individual games on a pay-as-they-go basis or sign-up to a monthly all you can play subscriptions. Similar cloud gaming platforms include Sony’s PlayStation Now, Nvidia’s GeForce Now and Microsoft’s Project xCloud.
Those platforms are significant disruptors to the video games market, in that they free the gamer from consoles limited to specialized gaming hardware – to new cross-platform play across multiple devices, including laptops, desktops and certain smartphones and tablet devices, basically, anything that runs the Google Chrome browser or YouTube in Stadia’s case.
Competitive eSports gaming too is a growing industry. The combination of streaming services and live events have turned elite gamers into highly-paid professionals for their winning performances in tournaments based on titles such as Dota 2, Counter-Strike, Fortnite and League of Legends which are watched by audiences around the world. Increasing amounts of the action take place on mobile devices, more so as a younger audience gains access to affordable smartphones with beefed up CPUs, GPUs, storage and RAM that is better able to render graphically intensive titles.
Newzoo estimates that the global eSports economy grew 27% year on year to top US$1bn in 2019 and will grow to be worth almost US$1.8bn by 2022. The size of the commercial opportunity has not escaped the attention of telcos and mobile network operators whose networks will carry much of that multiplayer traffic, where millions of “casual” gamers also tune in to see their favorites compete.
Vodafone for example partnered with one of the world’s largest esports companies – Electronic Sports League (ESL) – to sponsor a mobile gaming tournament with prize money of EUR165k, to be played live over its 5G network. The competition was open to players from 17 countries, where the MNO owns network infrastructure and featured two popular online mobile games – Gameloft’s arcade racer Asphalt 9: Legends and PUBG Mobile’s multiplayer Battle Royale. The tournament was deliberately conceived by Vodafone as a way to show fans and players how low latency, high-speed 5G networks could deliver new levels of gaming performance, previously unavailable on mobile devices.
Swisscom too established a Swiss eSports leagues for professional and amateur games, in association with ESL last year, while SingTel and its APAC subsidiaries are exploring ways to develop esports solutions for their subscribers in the region, in anticipation of full 5G rollouts in 2020. Deutsche Telekom is another operator to have signed a partnership and sponsorship with eSports company SK Gaming in 2018.
As more gamers and eSports events shift to mobile devices and networks game developers, broadcasters and platform providers will have to work out the best way to bill for content downloads, access and viewing rights. Most are not currently enabled for direct carrier billing (DCB) for example, but may well benefit from the convenience of partnering with telcos, MNOs and third-party payment service providers to bring their content to players and audiences across the globe in both tier one and developing markets.
Gaming already has a history of using DCB to handle player transactions – everything from full game download payments to in-game purchases, such as adding players, skins, weapons and items that can be traded with other players. Digital games marketplace Kinguin.net made its games and in-game items available to purchase via DCB in 2016 for example, while GameMine – a distribution partner for Nickelodeon mobile games – signed a deal with Movistar, Orange, Vodafone, Wind Tre and TIM in 2017.
Ubisoft-owned Playwing allows players to purchase games and in-app content via DCB, as does EA Mobile, Gameloft and Rovio. Microsoft too has already partnered with various telcos to offer DCB for Xbox users, including Etisalat in the Middle East last year , allowing them to purchase passes to Xbox One Live through their pre- and post-paid mobile phone accounts.
Research compiled by SuperDataResearch estimates that DCB is the third most popular payment method for digital gaming transactions on a global basis, behind bank and eWallets. It is particularly popular in Latin America, Eastern Europe and Asia Pacific due to the low ownership of bank cards and bank accounts in those regions.
It’s clear that optimizing user experience increases the marketability of games in a competitive market. Growth-minded games publishers view payment mechanisms as driving the purchase experience and are thus committed to offering an extensive set of payment options to suit individual preferences, demographics and budgets. Streaming game providers and eSports companies that are serious about maximizing player and viewer reach in emerging markets and beyond see DCB as the defacto solution to turbo-boost their growth.