Wednesday , June 29 2022

5G And gaming: A Match Made In Heaven? 

India has evolved into a gamer’s delight, with gaming becoming more than just a form of entertainment. It is rapidly growing into a serious business, with an influx of investments, rising revenues and increasing user expectations. Today, gamers want superior graphics, augmented reality, virtual reality, uninterrupted multi-user interface, chat rooms and prizes, all bundled into an unparalleled mobile gaming experience. Just when this flight of desires took off, it met a pleasant surprise or a match made in heaven in the form of 5G technology.  

 The 5th generation of the cellular network or 5G is up to 100 times faster than the current 4G network. 5G’s superior speed will allow gaming companies to satisfy the hunger of gamers by providing them with a faster than ever before gaming experience and creating new avenues for growth.  

The India advantage 

India has the unique advantage of being one of the youngest populations in the world. It enjoys deep smartphone penetration and affordable mobile data compared to many other countries, making it an attractive destination for gaming companies. India, second only to China, currently has 430 million mobile gamers and the number is expected to increase to 650 million by 2025 as per the Internet and Mobile Association of India.  

The mobile average revenue per user (ARPU) in India is pegged at ~ INR 129 as of the third quarter of 2020 as per the Cellular Operators Association of India. As per industry reports, online casual gaming ARPU is higher for the same period at ~ INR 152. Where mobile ARPU is expected to grow by 3 – 5% only, the gaming ARPU is expected to grow to ~ INR 250 by 2025, making it a lucrative proposition for telecom and gaming companies. The potential is comparable to what value-added services (VAS) did to telecom operators in increasing their revenues a decade ago, and gaming coupled with 5G can aid telecom revenue growth in the coming years.  

5G – a boon for gamers 

5G can help quench the thirst of gamers for a better experience. High internet speed can reduce latency in games and while also promoting disruptive augmented reality gaming that is becoming very popular. The virtual reality gaming experience can be enhanced through 5G which in turn can make way for equipment bundling, such as selling virtual reality headsets along with mobile phones, improving sales prospects for equipment manufacturers and sellers alike.   

The evolving phenomenon of the metaverse is likely to offer new avenues for gaming and faster data will be key in that process. Augmented and virtual reality gaming along with the phenomenon of metaverse can also lead to higher data consumption – an upside for telecom operators.  

Shifting sands of gaming  

The renowned Asian Games 2022 to be held in Hangzhou, China, September 2022 will include mobile games as a category of sport. Victorious gamers will be awarded gold, silver, and bronze medals akin to other prestigious Olympic sports by the Olympic Council of Asia, which hosts the Asian Games. Indians too will be participating in this first-of-a-kind event. Developments such as these will transform online gaming from being a form of entertainment to a mainstream sport. 5G technology can enable the process of making mobile games a more established, albeit regulated activity.  

Telecom companies will also benefit from gaming becoming a form of livelihood for many. Live streaming games, tournaments, mentoring budding gamers and becoming game testers are emerging as aspirational career options of the future for many gamers. However, these developments come along with certain challenges both for telecom and gaming companies. As mobile gaming becomes widespread, regulators are likely to expect better controls and checks. Compliance with Know Your Customer (KYC) and anti-money laundering norms will become critical. Greater emphasis will be laid on designing a fair game. With some courts in India banning games of chance, it will be important for gaming companies and telecom operators to keep a close eye on these details. Going forward, gaming companies will also look to boost the confidence of gamers and other stakeholders with better self-regulation.  

The speed of rollout and efficacy to reach the last mile may be another challenge. Another key aspect is capitalizing on the potential in Tier 2 and 3 cities in India that may also contribute to a significant number of gamers. So, if the 5G rollout remains limited to urban areas, gaming companies may not be able to realize the true potential that this futuristic technology has to offer in propelling the gaming experience to the next level.  

The author of this article is Mukul Shrivastava, Partner, Forensic and Integrity Services, EY.

About Mukul Shrivastava

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