Want to level up? It's game on for industry ecosystems: from consoles to cloud gaming

A common strategy for comprehending the shifting landscapes surrounding 5G is to define an ecosystem in terms of the industry or customer segment it serves. Using this customer-centric model, potential solution synergies between diverse customers in the same industry can be brought to light. It focuses on customers with similar requirements.

What is an ecosystem centered on an industry?

In the previous installment of our series on ecosystem evolution, we looked at five lenses for comprehending the ecosystems surrounding 5G, one of which was industry-centric. Industries like energy, healthcare, manufacturing, or gaming serve as anchors for all stakeholders in an industry-centric ecosystem. These ecosystems typically have a lot of players because they share a common structure in which they all contribute to the creation of value. Take into account the energy sector.

The gaming community: From downloading at home to streaming on the go, let's look at one industry-centric ecosystem: video gaming, where cloud and 5G are truly elevating players' gaming experiences. This will help put the theory into practice. There are a lot of players and stakeholders in the video game ecosystem:

Manufacturers of highly specialized hardware, such as graphics processing units (GPUs) or System on a Chip (SoCs); Original equipment manufacturers (OEMs) of devices, such as smartphones, PCs, and consoles; Platform providers, such as app stores and game marketplaces; Publishers and developers of games; Cloud providers; Communication service providers; and numerous others,

In recent years, gaming has seen a huge increase in players and revenue, likely as a result of national lockdowns in many nations and more time spent at home or alone as a result of the COVID-19 pandemic. Between 2022 and 2027, it is anticipated that the global gaming market, which is defined as playing electronic games, will expand by nearly 9% annually. Mobile gaming, which is anticipated to have a market share of more than 60% of annual global consumer spending this year, is the largest segment in terms of consumer spending in video gaming worldwide, according to data.ai and IDC.

The ease with which mobile gaming can be accessed through smartphones is one of the primary reasons for its popularity. There were 6.3 billion smartphone subscriptions worldwide at the end of 2021. In addition, the increasing speed of the internet makes it very easy to download games and play them from anywhere.

Cross-platform competition, social gaming features, augmented reality (AR), virtual reality (VR), and cloud gaming are just some of the other technological advancements and improvements that will further drive demand for video gaming. In the end, gamers pay for games, devices, accessories, connectivity, and more, so gamers' needs and expectations must be met. Over time, gamers' expectations change, also driven by on-demand content models from media entertainment services like Netflix and YouTube, where personalized recommendations make it easy to find content that fits your preferences from a large catalog. Access to content is instant, always, and everywhere with media streaming.

Even though gamers can be divided into very different target groups, such as those who spend a lot of time each day playing high-end console or PC games or those who occasionally use their smartphone to play games on the train, there are still some key characteristics that they share. Regardless of the technology they use, they all want to have fun while playing games and have an enjoyable gaming experience.

The ecosystem of console and PC gaming Console or PC gaming is typically what people associate with video gaming. This mature ecosystem is centered on stationary hardware, typically a PC or console, where video games are played primarily at home. It has been 60 years since the first home video game consoles with very basic graphics hit the market. The "walled garden approach" was typical of these early models, with the console manufacturers also controlling access to game content.

The player experience has changed over the years, from simple graphics to photorealistic ones. It has also changed from sitting at home by yourself to building and interacting with other gamers and becoming a part of communities all over the world. This was a big reason for growth during the pandemic because it gave people a new way to connect with like-minded people when they were physically isolated.

Popular PC video games like Call of Duty require a lot of memory space (250 GB), which must first be downloaded and stored on a person's hard drive. It's easy to waste a lot of time watching the progress bar move slowly if your internet connectivity is poor or the gaming server is full. And if you're short on time, nothing is more frustrating than having to wait for an entire game to download or update when you just want to play!

Not only is it important to be able to download and update game content from a console or PC to the cloud, but it also makes it possible for video gaming to function as a social activity by allowing players to meet, form teams, communicate, and play together. The video games must also be hosted on specialized game server clouds close to the players to provide a truly smooth and lag-free experience.

The ecosystem of cloud gaming disrupts both the console, PC, and mobile gaming ecosystems by completely altering conventional structures and distribution models. To provide a smooth gaming experience regardless of the gaming device, it is based on cloud capabilities, streaming media services, global content delivery networks, and connectivity networks.

Cloud gaming services run the game on their servers, supported by high-end graphical memory, rather than downloading it to your hardware and running it there. Every frame is streamed directly to the player's device, and the game responds to the player's commands. There is no aggravating waiting period for updates or downloads. From a cloud gaming provider, players can immediately play games from a wide range of titles. There is no need to purchase high-end gaming hardware or upgrade to meet the latest high-speed requirements because the computational power is moved to the cloud.

The user experience is very similar to that of conventional console and PC gaming, as long as there is a fast internet connection. It has an "as-a-service" business model that makes it possible to separate gaming from hardware and makes it easier for casual gamers to play more high-fidelity games. Cloud gaming services let gamers play high-quality games on a wide range of devices, including smartphones, tablets, low-powered laptops, and even televisions, at home or on the go.

Cloud gaming on the go: a chance to change the game 

The potential for revenue and expansion in the mobile cloud gaming industry is exciting, but there is still work to be done before it can be fully realized. As devices and network capabilities continue to advance and penetrate the market, it will take time to realize mobile cloud gaming's full potential as an emerging ecosystem.

First, we are aware that additional network-slicing-capable devices will be required for this. Additionally, we are aware that millions of smartphones worldwide are insufficiently powerful to run games downloaded from app stores that have been optimized for mobile devices. However, they can stream the same titles thanks to cloud infrastructure and mobile networks with high throughput.

CSPs play a key role in this situation. They must be equipped with the 5G network, which includes network slicing, sufficient capacity, coverage, and gaming-specific offerings developed by their requirements. The possibilities can begin to expand from this point.

5G and the cloud will be especially important to the mobile cloud gaming ecosystem because high throughput, low latency, and stable and consistent network connectivity are essential for delivering a high-fidelity image to the player. The smartphone can be transformed into a high-end gaming PC in your pocket at any time and anywhere with the help of 5G and edge computing. Additionally, 5G will contribute to expanding access to new audiences. There will be over one billion 5G subscriptions worldwide by the end of this year, with 4.4 billion subscriptions anticipated by the end of 2027. This is a huge market that can be used to target gamers who are on the go.

Moving from only providing network connectivity and/or ISP gaming offerings to a more favorable role in the ecosystem and from which they can capture gaming revenue opportunities, mobile cloud gaming is a promising area for CSPs to expand into.5G unlocks new capabilities like network slicing, making it possible to guarantee bandwidth and the increased flexibility to manage edge cloud in the network, reducing the lag between a gamer's command and the device's response, as discussed in our first episode about how the cellular ecosystem is changing as 4G to 5G transitions.

This typically involves reselling hardware through retail outlets and bundling data plans with cloud gaming platform memberships for CSPs' ISP gaming offerings. Mobile networks must be prepared to handle the increasing demands of on-the-go immersive experiences for multi-user games in dynamic environments as new iconic devices like lightweight augmented reality or XR glasses emerge over time. If this isn't done, there's a good chance that tech giants will keep up their over-the-top behavior, making it harder for communication service providers to make money.