Mobile and cloud gaming have long been touted by the analysts and market forecasters as key applications of new 5G networks and technology. But now we have uncovered some hard evidence to support those forecasts from Asia Pacific’s ardent gamers.
We surveyed some 2,000 self-confessed ardent gamers in both Japan and South Korea as part of a global study into the potential of 5G in the gaming market. Even before the Covid-19 pandemic sent many households into lockdown, ardent gamers in Japan and South Korea were spending, on average, close to 3.5 hours a day on their consoles. During lockdown, that average has climbed above four hours, and more than a third of the gamers in both countries admitted that they were now spending more than five hours a day feeding their gaming habit.
The importance of these numbers for operators building out 5G networks is that these gamers commit much much more than just time to their hobby. They are also very big, and very knowledgeable, spenders on connectivity. Across the world, there are some 2.7bn gamers who will spend close to $160bn on the games alone. Globally, these gamers spend an average of $260 a month on games, accessories, subscriptions and connectivity – in Japan, that figure is $245, in South Korea, it rises to $268.
But of course, it is the connectivity element of that spend that should really interest 5G operators. On average, gamers in Japan and South Korea spend around $42 a month on their fixed-line broadband connection; they also spend between a further $40 and $45 a month on a mobile subscription.
And here’s where it gets really interesting for the operators. In Japan, 74% of gamers said they would swap their fixed home broadband, and their mobile subscription, for one 5G contract if it offered better gaming connectivity. And in South Korea, the number prepared to immediately switch rose to 85%.
In fact, not only would they swap, in both countries at least 30% would pay up to half as much again for the new service, and around another 25% were prepared to go even higher than that in their quest for the best experience. That’s more than half of the gaming community willing to significantly increase their connectivity spend for an improved gaming experience over 5G. What makes these figures all the more compelling is that these are very knowledgeable buyers who have already proven their willingness to pay premium prices
These gamers know the upload and download speeds they are achieving with their current set-up, they know their Ping rates and they know what they want. They know that latency is the enemy of interactive online gameplay and we discovered that in both Japan and South Korea, only 7% of gamers are currently getting latency below the ten milliseconds that dedicated 5G gaming connections could deliver. In fact, the average latency lag experienced by these gamers is around 35-40 milliseconds, so 5G connectivity has plenty of headroom to significantly improve the current average live online gaming experience.
This level of knowledge about speed and latency is crucial to the burgeoning mobile and cloud gaming market. In fact around three-quarters of the gamers in the two countries would be interested in playing mobile and cloud games if the experience matched their home gaming environment.
On top of that, more than half of the gamers thought that 5G networks would make the cloud gaming experience much more compelling. In fact, in South Korea, more than 60% of the gamers surveyed would switch service providers as soon as they could to go to a mobile carrier offering a bundled cloud games service with a 5G contract. The number in Japan was lower but was still very significant at 47%.
The study clearly shows that an incentive exists for the operator community to build out gaming-specific 5G services. However, much of the 5G connectivity deployed so far has been of the ‘non-stand-alone’ variety where the 5G radio path uses the existing 4G or LTE supporting infrastructure. Unfortunately, that existing infrastructure cannot provide the network slicing capability that is central to the 5G proposition, or more importantly the dedicated ultra-low-latency connections in those slices that are crucial for the cloud gaming experience.
The reality is, that until 5G networks become completely ‘stand-alone’ – supported by a modern packet optical transport infrastructure capable of handling network slicing and low-latency end-to-end connections – then the high end, high-value part of the mobile and cloud gaming market, and those ardent gamers willing to invest in their hobby, will remain out of reach.
True standalone 5G is capable of exponentially outperforming the gamer’s current mobile or fixed connectivity experience. Faster download speeds and latency as low as one millisecond makes for an extremely attractive gaming proposition. Globally, we estimate that the 5G mobile gaming connectivity opportunity for carriers is worth an extra $150bn in incremental revenues. And if carriers use 5G to launch a fixed wireless service or develop offers that bundle a cloud gaming subscription, then the value-added revenue opportunity is even larger.
For the carriers across the Asia Pacific region, the evidence from the potential user community is both clear and compelling. The cloud gaming market is more than analyst opinion or marketing hype. There is latent, unfulfilled customer demand waiting to be satisfied.