When combined with the rollout of 5G, cloud gaming is transforming the global gaming ecosystem

According to a report conducted by EY West Media & Entertainment, cloud-based streaming is poised to be the next major video gaming disruptor, and when combined with the rollout of technologies such as 5G, is transforming the global gaming ecosystem. Scott Porter, EY West Media & Entertainment advisory leader, spoke with RCR Wireless News about how the consumer shift towards mobile gaming has sparked the interest of mobile operators. Further, he discussed what those operators should keep in mind as they enter unknown territory.

“63% of executives agree that if major game companies do not offer consumers cloud-based games, they will be at a disadvantage in five years,” Porter elaborated. “Meanwhile,” he continued, “nearly 70% believe video gaming companies will distribute most Triple-A games wirelessly through the cloud within five-to-ten years.”

Considered analogous to the film industry term “blockbuster,” Triple-A, or AAA, is a classification used for video games produced and distributed by a mid-sized or major publisher. These games often have high development and marketing budgets, and therefore, typically require more data and better connectivity.

While Porter confirms that video game distribution companies are anticipating that 5G will be an enabler to allow for Triple-A games to be streamed on mobile devices, he added that it still remains to be seen whether or not a player will truly be able to experience the game in the same way once it makes the move to mobile. The gaming world is one packed with purists, making this a critical limitation.

“[A lot of gamers] are accustomed to the capabilities of the PC machine [or console],” he said. Triple A games are usually played by providing input via handheld controls, and on a mobile platform, this capability is lost.

He explained that this change is putting pressure on game publishers to find ways to work the same control features into the new mobile platforms, as well as forcing hardcore gamers to switch up a fundamental aspect of gaming. “There is a transition that the hardcore gamers will have to go through,” he explained. “Further, even with the increased speeds that that 5G offers, there will still be an issue with latency. Even though the latency will be reduced, it’s still not the same if you were sitting in front of the PC or console.”

But, things are still looking good for the gaming industry. For one thing, Porter went on to say that EY and those in the industry do believe that overtime, many of the above limitations will be resolved. “We just don’t know how long that will be,” he stated.

Second, the market just keeps on growing. Porter said that the study revealed that 45% of global gaming revenue, or $68 billion, is from mobile platforms, and that level of growth doesn’t show signs of stopping.

“The ecosystem within the gaming environment is continuing to expand, and the estimated number of gamers globally in 2019 is about 2.5 billion and by 2021, it is estimated that that number will grow to 2.7 billion, which is a 200 million increase. And those 200 million will primarily come from mobile gaming,” stated Porter.

And the telcos have taken notice. “I think we’re starting to see interest in how the telcos and other players can create new monetization strategies,” said Porter. “You have all of this data that is now being collected by those people spending hours on their mobile devices playing games, and this data will be very valuable to telcos.”

While telcos do stand to make a killing in this emerging space, Porter cautions them to be aware of the limitation that 5G doesn’t address: capacity.

“One of the limitations that is being discussed widely within the sector right now is the cap on data,” he said. “5G provides the capability to stream data-intensive games, but not the capacity. On a monthly data plan, a gamer can use a monthly allocation of data in one night, and that will be something that the telcos will have to figure out how to address.”

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