Gaming is growing up – fast. No longer just for kids or hardcore enthusiasts with sophisticated equipment, gaming is becoming as ubiquitous as the mobile phone. From the casual “Time Fillers” who play mobile games to pass the time to the “Conventional Players” who revel in staying up to date on the latest game releases, gamers are as diverse as the devices they play on. Almost evenly split across gender, age and income levels, only the 41-50 age and low-income level groups play games at slightly lower rates.[i] One thing all gamers have in common, however, is the need for speed. In a survey of 4,500 consumers across nine countries, fast performance was ranked as the most important priority for gamers 60 and under.[ii] For gaming companies, that means low latency and reliability are critical.
Mobile and emerging markets are growing the fastest
The gaming industry as a whole is exhibiting strong growth, predominantly driven by mobile. According to research by Newzoo, the global games market is projected to grow to U.S. $196 billion by 2022 with a CAGR of +9.0% between 2018 and 2022. Mobile gaming (smartphone and tablet) is expected to account for almost half (49%) of that, or $95.4 billion by 2022, at a CAGR of +11.3% in the same time period. Coming in second is console (31%), followed by downloaded/boxed PC (19%) and browser PC (1%).i
On a regional level, although mature markets still retain the largest share, growth rates are slowing, while emerging markets are picking up speed. With improving infrastructures and increasing consumer demand for games and esports, Latin America is now the fastest growing gaming market in the world at a CAGR of +10.4%. By 2022, the market share by region is predicted to be Asia-Pacific (48%), North America (26%), EMEA (22%) and Latin America (4%).i
Key challenges for gaming companies
It’s no surprise that mobile gaming is the fastest growing segment. Mobile adoption rates are high worldwide, even in regions with low broadband connections. That translates into a plethora of opportunities for gaming companies, but challenges remain. These include:
1. Latency: Speed is essential for optimal player experience. Even the slightest changes in latency can mean the difference between a win and a loss for gamers. Serious gamers even have text overlays on their games to display exactly what their ping time is at every second. A ping rate of 0 to 20ms [J3] is excellent performance, while 20-100ms may still work for some games. However, latency over 150ms is going to cause noticeable lag and player frustration.
Source: Zenlayer case study
2. Reach + Cost: Mitigating latency requires removing the physical distance between gaming platforms and users. If you are a U.S. company that wants to reach gamers in Russia, Latin America, Africa or the Middle East, that means building or renting infrastructure in those locations. Large gaming companies with access to capital may be able to build their own infrastructure, but this can be complex and costly to maintain. Renting infrastructure from content delivery networks (CDNs) can help, but that won’t address the entire interactive gaming experience. While CDNs tend to have a broad global reach, they are optimized to deliver static and streaming content one-way. That can work well for downloading game content but many games also require fast connectivity back to the gaming platform for player actions.
3. Security: Online security is a high priority for gamers. More than half (54%) would not continue to play online games or make purchases on a website that has previously been hacked or experienced a security incident. And gamers in some countries, like Germany (62%), Japan (63%) and South Korea (66%) are even more cautious.iii
4. Scalability: When Fortnite hosted an in-game concert by DJ Marshmello, more than 10 million people tuned in, setting a record for peak concurrent players.[iii] Gaming infrastructure needs to scale as needed to handle spikes in traffic like this for in-game events, new product releases and more.
“For games to be successful, they need to perform well. They can’t have a lot of latency. There are so many options that people will just move onto something else if the game isn’t performing.”Wade Chen, Director of Partnerships and Alliances, Zenlayer
Changing the game, at the edge
Gaming companies need to deliver a secure, consistent quality experience to players, regardless of location or number of concurrent users. That requires shifting from a traditional centralized IT architecture to one that is geographically distributed in regional core clouds and localized at the edge.
Source: Global Interconnection Index (GXI) Volume 3, published by Equinix
A global gaming company based in the Asia-Pacific region wanted to expand in Brazil but was running into walls when it came to providing players with the same quality experience it had in other locations. As an emerging market, Brazil’s networking infrastructure is not as mature as developed markets. Zenlayer partnered with Equinix[J4] to provide the company with a secure, low-latency (<20ms response times) and reliable network that gives players the same experience every time, in every market. The solution included 250 bare metal servers in the São Paulo International Business Exchange™ (IBX®) data center, local IP transit with Brazilian carriers via the Equinix Internet Exchange™ (IX) portal, and dedicated connections to their global points of presence (PoPs) – all for 25% lower costs than the company had previously been paying for comparable services. Even better, a 15% reduction in latency during peak hours translated into higher player satisfaction and greater participation on their platform due to positive reviews and word of mouth.
With Zenlayer on Platform Equinix®, gaming companies can accelerate online gaming performance worldwide, scale access to a variety of gaming options for multiple device types and provide world-class operational reliability and security. Equinix’s 200+ IBX global data centers enable gaming companies to place computing infrastructure close to users at the digital edge to minimize latency.
Learn more about how a global gaming company lowered latency and costs in Brazil.
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[i]Newzoo, 2019 Global Games Market Report: Light Version and Demographics of Gamers via Analytics Platform: Key Numbers.
The new norm for gaming latency.
-Eduardo Carvalho, Americas Regional Managing Director, Equinix