In Ready Player One, a Steven Spielberg movie released in 2018, the netizens of a squalid future escape their daily lives through epic gaming sessions on the OASIS platform. Spielberg's vision had already terrified the parents of Fortnite-addicted teenagers, and it looks even more nightmarish after the launch of Google's Stadia platform this week. It's not only parents who should be worried, either: For the chief technology officers of telcos, ISPs and cable operators everywhere, Stadia is one scary prospect.
That's the assessment of Rudolf van der Berg, a Dutch management consultant and Internet expert. In a lengthy assessment of Stadia published here, van der Berg says many of today's broadband networks just won't be able to hack it. "All networks will have to work on uplinks, peering and interconnection," he writes. "None of the traditional tricks of generating and keeping traffic local will work anymore. It is coming from Google and it's a flood."
But online games such as Fortnite, in which players gun down their opponents until there is only one survivor, have been around for a while. So why the sudden panic?
As Jefferies equity analysts explain in a research note, Stadia is a revolutionary concept in cloud gaming because it takes processing that would normally happen in a gaming console and shifts it to the data center. The service is then delivered over YouTube, Google's mass-market video-streaming website. Hey presto, billions of cheap, dumb devices can become gaming consoles, and anyone who can receive a YouTube link can join a game. Almost overnight, it could turn millions of occasionally active teenagers (as well as some of their elders) into bedroom-bound gaming zombies.
"Google is reducing the friction to play games," is Jefferies' no-nonsense take. "With Stadia, players can simply click a link and they can play on any screen."
This will create a tsunami of data traffic that could swamp today's cable and partway-to-the-property fiber networks. Imagine, writes van der Berg, if just 2.5% of households were playing Google Stadia at the same time of the evening. For an operator with 4 million customers, that would be 100,000 streams in parallel, equating to about 2.5Tbit/s (yes, that's terabits per second) in network capacity demand, according to his calculations. "No matter how you look at it, it will require some upgrades of core switches and private network interconnects between Google and telcos," he says. And you can forget about using 5G (perhaps this is a killer app for 6G technology?).
The article by van der Berg is a must-read because it provides all the details behind his expectations. The issue for telcos is that heavy spending on network upgrades is unlikely to be matched by any boost in sales, unless operators can somehow tap into the revenue streams for gaming services. Only octogenarians and farmyard animals still lack broadband connections in developed economies, and ratcheting up the broadband speed dial has never been a really successful way to extract bigger payments from customers.
Ah, but you're forgetting about latency, the mobile operator retorts. Telcos like Deutsche Telekom are hopeful that someone (whether a consumer, a device maker, a gaming company or an online giant) will be willing to pay for gaming services that require low latency connections (latency is the time it takes in milliseconds for a signal to make a round trip on a data network). In the case of Stadia, however, Google may have this nailed up with its data centers and global caching system, reckons van der Berg. The opportunity for a telco would consequently not be there -- and certainly not on 5G, as previously mentioned.
That won't necessarily be the case for all online games. Deutsche Telekom has already built four "edge" data centers in big German cities that could support a new 5G-delivered augmented reality game it has been testing with Niantic, the games company behind Pokémon Go, and Samsung. Those edge investments are needed, it says, because latency on today's networks would leave gamers feeling dizzy. And mobile networks are essential because gamers would play on smartphones. Outdoors. In city centers.
But there are obviously lots of variables in this scenario, and it remains unclear whether Niantic, Samsung or a gamer will compensate Deutsche Telekom for the edge investments. The future business models are still "up in the air," the German operator has acknowledged to Light Reading.
Stadia seems like much better news for fixed broadband access and Internet equipment makers such as Adtran, Arris (for cable networks), Calix, Huawei, Nokia, Cisco, Juniper and more. Operators that have resisted upgrading their networks to all-fiber connections may finally have to budge, or lose broadband customers to rivals catering to gamer families (or families under pressure from teenagers to switch provider).
That will depend largely on the response to Stadia, of course. "Does multiplayer work or will it be laggy?" says Jefferies in its research note, showing there is some industry concern over the issue of latency. "Second, what games will be supported? The answers to these questions will determine the speed of adoption." Get ready, player, parent and telco.
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— Iain Morris, International Editor, Light Reading