The rise of cloud gaming
Cloud gaming is revolutionizing the way gamers play, and 5G is helping to increase accessibility for new audiences. It is estimated that by 2031 there will be 99 million cloud gaming subscribers in North America, or about a quarter of 5G subscriptions.
As the number of cloud gamers increases, so does the demand for better connectivity. But how can service providers give cloud gamers what they want while driving revenue growth?
Before we explore how this is possible, let’s take a look at what’s causing this surge:
Targeting ‘on-the-go’ gamers: Cloud gaming providers are implementing a multi-screen strategy to reach new audiences.
Attractive subscriptions: Gamers everywhere can play a wide catalog of titles at an affordable monthly cost.
Shift in preferences: Recent trends show that gamers prefer streaming over hardware upgrades, as long as connectivity requirements are met.
Mature ecosystem of cloud services: Facilitate access to computer resources at the edge of the network to stream games closer to gamers.
Rapid 5G adoption: It is estimated that 67 percent of cloud gamers will own a 5G device within 5 years and grow to 100 percent by 2031.
Since cloud gaming is a fast-growing market, it is important to realize its monetization potential. Why are gamers demanding better connectivity? How much would they pay for superior experiences? What revenue gain is possible? The answers can help inform service providers’ strategies to realize a return on their 5G investments.
The power-up gamers demand
When it comes to gaming, it’s essential to ensure accurate rendering of content in response to gamer commands without disrupting the experience (cloud gaming needs latencies of less than 50ms).
Imagine yourself engaged in a battle on the edge of your seat in Fortnite. You have painstakingly reduced your competitors to just one. You locate your opponent and set up the perfect shot, but then…
You experience delay. Your opponent moves and you miss. It didn’t matter that you were aware, your connection was not.
Unless cloud gaming matches the performance of traditional console/PC gaming, gamers won’t be convinced of its value, regardless of the freedom it offers. Cloud gaming providers understand this and place strict demands on service providers. For example, Xbox and Stadia require minimum speeds between 10 and 15 Mbps.
Fortunately, thanks to 5G investments, service providers are well positioned to manage the infrastructure needed for cloud gaming, leveraging the benefits of 5G to take advantage of the demands of gamers.
Unlocking the next level on the road to monetization with 5G
Network slicing allows service providers to assign gamers a differentiated slice every time they launch a game on their portable devices, ensuring performance metrics such as bandwidth and latency. In addition, with edge infrastructure that enables workload execution closer to subscribers, it is possible to reduce lag times between gamer commands and subsequent actions.
inCode analyzed market trends and studied key drivers to predict potential revenue growth. It found that nearly 80 percent of cloud gamers would pay more for better connectivity on top of their monthly 5G subscription, identifying a segment that would pay $10.99 more for an advanced performance drive and a segment that would pay $5.49 more. for a mediocre performance disc.
Using this data, inCode simulated a 5G network serving cloud gamers and mobile broadband subscribers across three segments to gain the ability to monetize and estimate the cost of building and operating the 5G sites needed to meet this demand. to fulfil.
The simulation showed that by taking advantage of enhanced connectivity fees for gaming drives only, service providers can expect a 4 percent increase in revenue by 2031. In addition, despite cloud gamers’ data usage being significantly higher than average 5G subscribers, The modeled plan for capacity growth of the 5G network supports the traffic contribution of both gaming slices and the mobile broadband slice without further capacity expansion and investment.
A win-win for service providers and gamers
Gamers and service providers share many of the same goals; collect as many coins as possible, improve your abilities, reach the next stage of your journey and reach the highest position on the leaderboards.
In this new era of streaming, cloud gamers must rely on more than just razor-sharp reflexes to achieve these goals; they also need connectivity that can keep up with the action. By leveraging the capabilities of 5G networks and paying for dedicated network segments, subscribers get the gaming experiences they want, while service providers unleash new revenue streams. Everyone wins.
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