Cloud gaming has the potential to be one of the first consumer use cases to capitalise on the low latencies and high speeds of 5G networks, but a new report issued by Ericsson’s strategy consulting arm inCode warns North American mobile operators need to deliver services that are as good as console-based gaming.

The report stated cloud gaming was expected to reach 99 million 5G subscribers over the next decade in North America while accounting for approximately 23 per cent of 5G subscriptions.

Cloud gaming frees players from buying and storing games and running them on processor intensive computers or consoles. The report stated cloud gaming is changing content distribution dynamics in the gaming industry by enabling gamers to play anywhere on their devices.

Gamers stand to benefit from the low-latency and edge compute capabilities of operator’s 5G networks. The report noted that 47 per cent of North American gamers consider reduced lag a key connectivity improvement.

InCode’s report said 67 per cent of cloud gamers will have 5G devices in the next five years, growing to 100 per cent before the end of the decade, further proof that gaming could drive major monetisation for mobile operators.

The report noted that how mobile operators monetise cloud gaming on their 5G networks remained a fundamental question.

One answer lies in their ability to offer multiple, differentiated services, such as network slicing, that generate new revenue.

Using a simulation of a sample market in North America that assumed that cloud gamers would be willing to pay between $5.49 and $10.99 more per month for connectivity that guarantees minimum speeds and low latencies resulted in a 4 per cent increase in overall incremental service revenues by the end of the decade.

InCode’s analysis of the gaming market trends suggests that almost 80 per cent of gamers are willing to pay more for enhanced 5G connectivity on top of the basic monthly bill.

The inCode simulation estimates that operators can anticipate a 4 per cent overall service revenue increase by the end of the decade due to game-based network slices.

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