Are Esports and Online Gaming the Next Killer Apps?

Michael Dong

Move over Super Bowl and the World Series. Esports and online gaming are making their move.

In 2018, the global Esports audience grew to 380 million viewers[i] and by 2021, the U.S. will have more viewers than every professional sports league save the NFL.[ii] Newzoo predicts that the global Esports economy will grow 38% annually, reaching $1.4 billion by 2020. At the macro level, global online gaming revenues will total almost $12 billion in 2019[iii] and are expected to grow at a 2.5% CAGR to $13.2 billion by 2023.

As game developers gather in San Francisco this week at the Game Developers Conference (GDC)[iv], they will be discussing the latest in interactive, online gaming platforms along with innovations in advanced graphics, mobile networking, voice recognition and accessibility, artificial intelligence/machine learning (AI/ML), and virtual reality/augmented reality (VR/AR).

The boom in more interactive, experiential gaming and a global audience is dramatically increasing the need for online gaming network bandwidth. Cisco’s 2018 Visual Networking Index predicts that online gaming will grow nine-fold from 2017 to 2022, totaling 4% of the global IP traffic by 2022 and representing 15 exabytes (EB) per month of global consumer traffic.[v]

The growing need for speed

Online gaming and Esports require high-speed, low-latency interconnection between gaming systems and cloud computing to keep pace with the advances in processing/graphics power and the AI/ML and VR/AR systems that power users’ real-time gaming experience. Reaction speed of the player, the gaming system and supporting networks and clouds can mean the difference between winning millions of dollars in prize money and getting knocked out of the competition.

Latency is all important in an environment in which any lag in response time leaves a player at a competitive disadvantage. Perceived latency must be nonexistent, which is challenging enough, but even more challenging during event-driven surges, when up to 10 times as many players (totally hundreds of millions) are playing at the same time. Individual gaming customers are twice as likely to abandon a game when they experience a 500-millisecond network delay[vi], demonstrating the high impact of poor network and cloud performance on game playing and revenues. As a result, online gaming providers are increasingly lobbying cloud hyperscalers, such as AWS and Microsoft Azure, to help them scale gaming platforms more effectively and increase global reach, as well as make cloud-based analytics available to collect and analyze huge quantities of in-game player data.

With the global and increasingly mobile popularity of online gaming, the best way to slash latency is to push gaming servers and access nodes to the digital edge in data centers close to major global urban gaming centers where there are high populations of gaming providers and players. Direct, private interconnection with gaming networks, gaming ecosystems, and network and cloud providers at the edge can slash latency and network costs dramatically, as can stream gaming services proximate to a large number of users. An Interconnection Oriented Architecture™ (IOA™) strategy, which distributes ecosystems of gaming providers, partners and players at the edge, will be even more critical as games incorporate advanced, bandwidth-hungry technologies such as VR/AR and become increasingly mobile. 5G performance will be a big boost to mobile gaming but 5G also will need interconnection at the digital edge to reach its full potential.

Security is another reason for direct and private interconnection. With cybercriminals posing as gamers and gaining access to the computers and personal data of trusting players-including not just personal and credit card information but the tokens, weapons and other game pieces worth a lot of money in the gaming community[vii]. Incorporating security into gaming hardware and networks at the edge where most gamers reside, can place controls in closer proximity to cyberattack entry points.

At Equinix, we have a growing online gaming ecosystem developing worldwide, with customers such as Pearl Abyss and Tencent. These gaming leaders are proximate to our dense ecosystem of more than 1,800 network and 2,900+ cloud and IT service providers worldwide, giving them the access to interconnection and cloud services that can deliver the high-speed gaming experience that Esports and online gaming players need to win and play another day.

Read our Interconnection Strategy Guide to learn more about direct and secure interconnection at the edge.

[i] Newzoo, Global Esports Economy Will Reach $906.6 Million in 2018 as Brand Investment Grows by 48%, 2018

[ii] Activate, Activate Tech and Media Outlook 2019, 2018

[iii] Statista, Online Games Worldwide, 2019

[iv] Game Developers Conference 2019

[v] Cisco, Cisco 2018 Visual Networking Index, 2018

[vi] VentureBeat, How Latency is Killing Online Gaming, 2016

[vii] Experian, Data Breach Industry Forecast 2019, 2018