Telcos next biggest cash grab? Gaming

Telecom companies will play an increasingly pivotal role in gaming as the industry evolves, according to new insights highlighted in GlobalData's report 'Decoding the eGaming and eSports ecosystem for Telecoms'.

The gaming industry is moving to an as-a-service business model where customers can immediately purchase and play games without the need for equipment such as consoles, new research finds.

In response, industry players such as phone companies are shifting their offers towards cloud gaming and streaming services, according to the company.

The report reveals how cloud technology could transform the gaming market, in a similar fashion to how Neflix changed the way video content is consumed.

GlobalData telecom market data and intelligence analyse Sergej Gavrilov says, "Cloud gaming is beneficial from both the end-users and developers point of view because end users no longer require expensive hardware to gain superior gaming experiences.

"On the other hand, for developers, cloud gaming can reach beyond the current console and PC target audience and broaden the potential market.

GlobalData states the video games industry is growing fast. In 2018, the video games market was worth more than $130 billion and is likely to become a $300 billion-plus industry by 2025, having grown at a compound annual growth rate (CAGR) of 13% between 2018 and 2025.

In order to enter the cloud gaming market, telecom operators often choose to partner with cloud gaming platform providers to release their cloud gaming services through set-top boxes, PCs and mobile devices, the company states.

Additionally, the subscription-based monetisation models are chosen to further increase telcos revenue streams and ensure more predictable cash flows, compared to legacy monetisation models.

Operators are also strongly positioned in the mobile cloud gaming segment as they act as connectivity gatekeepers. However, more telcos are entering the cloud gaming market.

Gavrilov says, "Telcos can use the growing popularity of streaming/cloud gaming to upsell higher-speed and lower-latency fibre to the home (FTTH) packages to gamers, along with dedicated bandwidth for gaming traffic.

"Additionally, telcos can provide access to cloud gaming content and bundle it with multiplay packages.

"As well as this, they can leverage the strong demand for mobile gaming to monetise low-latency 5G data bundles and use their carrier billing capability and mobile wallets for gaming in-app purchases.

GlobalData says more powerful devices with extended battery life will support the popularisation of mobile gaming. The rollout of high-speed and low latency 5G will further drive the uptake of mobile gaming and zero-rated gaming data plans can potentially attract even more mobile gamers.