The online gaming industry generates enormous revenues, estimated at $3.4 billion in 2006. The most significant contribution to this number comes from South and East Asia where the gaming industry is still experiencing explosive growth and the correlation between broadband lines and game hours clocked is clear.
This is against the background of launches like Grand Theft Auto 4, released
in April 2008 by Rockstar, which exceeded expectations and took the record for the highest launch revenue game ever and within a week produced about half of the annual revenue of the leader of multi-user games market, Blizzard’s World of Warcraft. Although not exclusively an online game GTA4 has added significant online gameplay in recognition of the future for all games.
Online gaming requires high quality broadband. If this requirement is not fulfilled, the intensity of gaming experience decreases. For this reason, the markets strong in gaming are usually strong in broadband.
For instance China which has experienced rapid broadband development since 2005 and is the second largest broadband country has an impressive gaming market. Of 8M subscribers to World of Warcraft, 3M are reported there. But it is South Korea that remains the most broadband gaming-intensive country in the world with the total gaming market estimated at $8.5 billion in 2007.
In general, today’s games from the majority of publishers such as Electronic Arts, Microsoft, Sony, Blizzard Entertainment or NC Soft are more graphics intensive and use more video, which demands increasing amounts of bandwidth for online play.
“The Massively Multiplayer Online Role-playing Games (MMORPG) exemplified by World of Warcraft take place in the real time and in this situation latency becomes a problem. Also a lack of jitter is very important in true online gaming”, says John Bosnell, Senior Analyst at Point Topic.
Indeed some of the multi-user games such as Battlefield 1942 still only provide the best experience when played on a LAN.
All the above features are also important for the console games with broadband modems which allow to the multi user-interaction. Gameplay may require comparatively large amounts of data to be sent to the server, so upstream speed as well as downstream speed are important. This is especially true if the players are using VoIP headsets to talk to each other.
“The significance of social networking will increase within and beyond traditional gaming communities, especially in playing console games”, says John Bosnell.
To meet user expectation some ISPs are now offering specialist symmetrical DSL services aimed at gamers. Gaming has played a key role in encouraging ISPs to offer multiple Mbit/s of bandwidth. In Europe more and more telecoms are also entering into all gaming genres as their activities in broadband intensify and their portals become richer.
ISPs such as NTL in the UK and Telecom Italia in Italy have rich portals dedicated to gaming and robust sales channels set up to service both console and PC gamers with new games. Specialist gaming cafes invest in leased lines to provide online action gaming for a limited number of players and sell this as a premium service.
John Bosnell predicts that “the large installed base of games consoles and online PC gamers will only increase in size as the gaming market diversifies and broadband penetration increases.”
Gaming is a good market opportunity for ISPs if the pace of growth remains the same. The number of subscribers of World of Warcraft increased from 8M in 2007 to 10M in 2008, while the leader in console games Microsoft’s Xbox 360 doubled the number of players to 12M in 2008 compared to the previous year.
With the growing number of subscribers, ISPs have a significant market to add value to and the promotion of gaming-friendly broadband services, incorporation of high upstream speeds and technical support is a strategy that none should ignore.
***END***
For more information and associated charts and tables, please contact:
Point Topic: Oliver Johnson
Email: oliver {at} point-topic(.)com
Tel. +44 (0) 20 7812 0506
About Point Topic
Point Topic is an analyst company focusing entirely on broadband. Point Topic’s international services have a global reputation for providing the most up-to-date and authoritative user statistics, supplier profiles and applications reports on DSL, FTTx, cable and other broadband services worldwide.
Point Topic, reg. in England 3503830. 175 Gray’s Inn Road, London WC1X 8UE.
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