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July 4, 2019

Games-as-a-service is transforming the gaming sector and telcos are playing an important role

By GlobalData Technology

The gaming industry has existed for over 50 years and continues to evolve on the back of strong consumer demand and technological advancements.

The sectors’ latest transformation – from which it hopes to maximise profits – is to a games-as-a-service business model with consumers paying to access cloud gaming, game rentals and other subscription-based services.

Games-as-a-service game changer

From a gamers’ point of view, a powerful PC is no longer needed to enjoy a quality gaming experience, due to a relatively new innovation, called cloud gaming which is being increasingly offered by telcos as well as the traditional industry players.

This transformation is also beneficial from the developers’ point of view as cloud gaming has the potential to reach a wider audience as gaming is no longer limited to a single platform.

Telecom operators are strongly positioned in the cloud gaming segment given their ability to act as gatekeepers for cloud gaming and streaming services through their connectivity services.

Currently, ISPs act as gatekeepers of cloud gaming with fixed connectivity.
Cloud gaming is a bandwidth-intensive service that requires higher broadband speeds. ISPs can monetise this opportunity by, for example, up-selling other products.

Mobile network operators currently act as gatekeepers for cloud gaming on mobile devices and can be expected to continue to do so. Sufficient speeds on 4G or 5G networks are required for mobile cloud gaming. Some telcos, such as Deutsche Telekom, already offer zero-rated gaming data plans. Greater uptake of 5G services will help popularise and increase the quality of mobile and cloud gaming.