Swarmio’s CEO describes the “huge gap” that remains between telcos and the gaming world as the former looks for ways enter the market
With the gaming industry booming, many new players are eager to get a piece of the pie. Telcos, for instance, have been developing partnerships with game publishers, esports organizations and others in an effort to tap into new revenue streams.
But, according to Vijai Karthigesu, founder & CEO of Swarmio Media, there remains “a huge gap” between telcos and the gaming world. It’s a gap, he said, that Swarmio is helping to bridge. In the below conversation with RCR Wireless News, Karthigesu describes this challenge further, as well as some of the hurdles still facing emerging gaming trends, like cloud gaming.
The following interview has been lightly edited for clarity and length.
Q: Tell me more about this ‘gaming gap’ that Swarmio has identified and is trying to address?
Karthigesu: Oh, it’s not just gaming — I think there is a gap between any over-the-top service and telcos. Look at video conferencing. You would have thought, years ago, that you’d see a big telco name there. Movies, they lost to Netflix; music, to Spotify and Apple. A now even voice is going away.
They are in danger of losing 5G. The last things that telcos actually do, one is the last mile and the other one is the actual core of the technology. All the core functionalities are owned by the telcos today. But what I see is that more and more of that is slipping into the hyperscalers. Microsoft and Google are pushing to run the 5G core. Even Facebook is looking at the 5G core. More and more, even the control function is slipping way.
Telcos are at a crossroad to make the decision whether they’re going to just become a utility just offering last mile or take more control.
But specific to gaming, the thing that telcos really didn’t grasp is the gamer mentality. Every user for [a telco] is a customer and they want to make money off that customer, and because of this kind of mentality, the whole system is designed to treat every customer as a customer and they pay a bill monthly, but when you think about gaming, the concept of customer has to be untethered and moved into community. You cannot treat a gamer a single customer, you need to think about building and supporting a community. That sense of organizational mindset is a huge cultural shift that telcos have to do.
We’re trying to give telcos something in the gaming industry. We can’t solve the big things, like running the 5G core for them; however, we can find a way for telecom operators to meaningfully inject themselves into the gaming revenue stream.
Q: Do you agree that gaming is the most important 5G consumer use case?
Karthigesu: We can find a lot of use cases for 5G because it addresses many things like latency, accessibility and high bandwidth for places you cannot reach with fiber, so there are many other use cases for 5G. But gaming, because it’s big — if you look at every country, almost 50% of the population plays some sort of game — it’s an amazing use case that you can monetize today.
Today, gaming is one of the showcases for monetizing 5G. In the future, there will be others, but today, I don’t see any others that you can easily demonstrate like you can with gaming.
Q: We spoke about 5G gaming, but what about cloud gaming? How is that going?
Karthigesu: 5G itself is going to improve mobile gaming experience and fuel its growth; cloud gaming is just once small segment of the entire 5G gaming conversation.
People kind of consider cloud gaming, as it is today, to be like what Apple did for music or Netflix for movies. The problem is that cloud technology itself is in the very early stages and the availability of that kind of technology is available where places that cloud gaming is not needed, like North America and Europe. In those regions, cloud gaming is competing with consoles like PlayStation or Xbox and PCs because people can spend $400. It’s not a big deal for many of those consumers. It doesn’t make economic sense.
Serious gamers will not be satisfied with cloud gaming because these gamers will select a wired mouse over a wireless one for faster input. So that market is gone.
So now they’re targeting people who don’t have gaming computers and aren’t serious gamers and more family-oriented games. But those are also those segments going into mobile. Show me a 5g mobile phone that can’t run a game like that. And most mobile games are free, and cloud gaming’s whole idea is subscription-based gaming. There is no real business case here.
Only one business case for cloud gaming exists: multi-screen play or across-platform play. Today, if you’re a mobile player, you only play with other mobile players; if you’re a console player, you only play with console players. With cloud gaming, you can use multiple screens, so the community can be bigger. In the future, someone can develop a game that eliminates the barrier between different screens, so whether you have a mobile phone, console or PC, you can play together.
I am not trying to be negative. Cloud gaming just needs to find its way.
Q: Where is the opportunity for telcos in gaming?
Karthigesu: Gaming is $200 billion industry, and most of that money is made by publishers. If you want to make money in the gaming industry, you have to somehow find a way to be part of that who revenue stream, so the question is what do game publishers need?
They need user acquisition, last mile connectivity, edge computing and billing integration.
Telcos have all of those. They have the last mile, they have gamers [in the form of customers], they having the billing integrating, they have edge cloud, they have 5G. Telcos can put them together and deliver it to gaming publishers and become a gateway to gamers and to monetizing them.
