“We compete with (and lose to) Fortnite more than HBO.” When Netflix made this public statement, during the presentation of its 4Q18 earnings results, I realized that the gaming universe had evolved beyond what I had imagined.
It seems like it was just yesterday that we used to blow on Atari cartridges to clear the dust inside and play a video game (this had only a “placebo” effect but was worth a try). Back then, connections were physical and tangible. You had to stick the game cartridge into the console slot in order to play, then use a tiny “switcher” to shift the TV display input from TV antenna reception to the controller’s video game feed. Buttons? You only needed one… It was a whole different era.
Evolution in gaming and computer technology
My very first video game console was a Master System, manufactured by Sega in the 1980s. The version I had came with the game Alex Kidd in Miracle World on its hard drive. I’m pretty sure that’s how I learned how to play jankenpon, our name for the rock-paper-scissors game. I used to play for more than two hours straight just to reach the end of the game, back when simply having a story line with a beginning, middle and end was a huge leap forward in games. It was then that I started getting flak for spending too much time playing video games.
Mega Drive, Phantom System, Dynacom, Super Nintendo—gaming has evolved across many different manufacturers and consoles. Each had its own set of games, all packaged as physical cartridges. Then came Sony’s PlayStation in 1994, which replaced cartridges with CDs. The games were incredibly realistic and state of the art for their time, in keeping with the development of computer technology and video game consoles. For example, the ASCI Red supercomputer, launched by Intel in 1997, cost $46 million, with a capacity of 1.068 teraflops (about a trillion mathematical operations a second) and a whopping footprint of 2,500 square feet. In contrast, the PlayStation 3, which came to market nine years later, sold for $449, reached up to 2.1 teraflops and could be tucked away in any small piece of furniture.
This upsurge in computer capacity opened the door to many possibilities. Intel’s co-founder, Gordon Moore, famously predicted in the 1950s that microprocessor processing power would double every year to two years while shrinking in cost and size. And in the 2000s, the internet came into play and changed our lives forever.
Breaking free of constraints
Previously, everything had been limited to physical controllers wired to separate platforms. Then games broke free from homes and took over the world. That opened engineers’ and developers’ minds to create increasingly globalized platforms and different kinds of connections, including the new element of players connected to each other and playing together remotely.
Games are constantly becoming more realistic, opening up endless new possibilities—even to the point of blending the virtual and real worlds with technologies like virtual reality (VR), augmented reality (AR) and extended reality (XR). No longer a form of childish and trivial entertainment, games are now part of our everyday lives, infiltrating areas like education and health care in a way that few people ever anticipated.
As the gaming industry evolves, market players are specializing in different areas, be it by creating content for entertainment purposes—for example, Netflix “gamifying” some movies by making them interactive—or by introducing VR technology in health clinics to entertain children as they are being vaccinated. On the other hand, platforms like the PlayStation Network or Xbox Live now face a huge challenge of delivering a product with a unique experience for their users.
Gaming moves to the cloud
These same players are now starting to use technologies such as cloud and 5G to deliver different realities. Microsoft and Sony are teaming up to create XCloud. Stadia, Google’s newly launched cloud gaming platform, pledges to deliver 10.1 teraflops. The game streaming solution runs on Google Cloud. Apple, Microsoft and EA and many other companies are launching similar products.
It takes backbone infrastructure for this whole evolution to be possible and deliver the best experience to gamers. An instability between an online game’s servers and cloud providers or network providers can cause unacceptable lags in the gaming experience for hundreds of people at a time. If that kind of problem recurs, fewer and fewer people will be interested in the game, causing financial loss.
The best way to prevent this kind of issue is to push gaming servers and access nodes to the digital edge in data centers closer to the gamers and interconnect to companies within the gaming ecosystem. An ultrafast, secure, and private interconnection between cloud providers, network providers and their partners can play a key role in the gaming universe. Lower latency, lower network costs and a better customer experience are only some of the benefits, especially in online gaming.
According to the Cisco Visual Networking Index, “Internet gaming traffic will grow ninefold from 2017 to 2022, a CAGR [compound annual growth rate] of 55 percent. Globally, Internet gaming traffic will be 4 percent of global IP traffic by 2022, up from 1 percent in 2017.”
The games industry in Brazil alone is growing fast. According to a census released by the Brazilian Ministry of Culture in late 2018, the sector grew almost 30% a year in Brazil. And the country is now the 13th largest consumer gaming market in the world.
Preparing for the future of gaming
The gaming world will be able to reach these new realities only if games are built and delivered in a way that can rely on all of the computer power needed, especially when everyone is fully connected.
In the gaming industry and other segments that use cloud-based solutions, interconnection-oriented architecture is shifting the business model of companies. Previously, companies used data centers in isolated locations; the greater the distance between the consumer and the data center, the worse the experience was. Cloud computing has turned this model on its head. The top companies worldwide already have their IT infrastructure extensively distributed.
The gaming universe gives us a very clear example of how important the user experience really is. Companies in this segment already realize the importance of delivering the best market services to their clients, which means implementing the best possible models available. Following this trend, major corporations in the gaming industry have been increasingly investing in interconnection in order to boost competitiveness and global reach.
Read the Interconnection Strategy Guide to learn more about how to apply interconnection to your business model.
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