Webinar report: The Collision of Gaming and TV

Throughout the webinar, industry experts analyse the dynamic landscape of cloud gaming and assess its value for broadcasters and pay TV operators seeking to grab the attention of new audiences and drive interaction on their platforms.

While content providers have ventured into cloud gaming in the past (e.g. MagentaGaming from Deutsche Telekom), Netflix’s recent foray into the space with the launch of a beta version of a hybrid mobile-controlled cloud gaming service has pay TV operators and broadcasters wondering how gaming might work within their existing businesses.

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Host Keran Boyd from Caretta Research spoke with gaming specialists from US wireless network operator Verizon; German telecoms company Deutsche Telekom Group; Tencent Cloud Europe, part of Chinese tech conglomerate Tencent; and the Mixed Reality Virtual Innovation Gaming and Esports Institute (MRVIGES) at the Southern University Law Center (SULC) in Louisiana - a creative hub that engages individuals from underrepresented populations interested in pursuing educational, career, and entrepreneurial opportunities in the legal and business aspects of entertainment, gaming, and esports.

The participants covered a wide range of topics, from crafting a viable business model for gaming within traditional TV enterprises to the feasibility of integrating gaming into existing tech infrastructure.

Gaming and TV

According to Blake Lewin, Product Manager for Gaming & Entertainment at Verizon, advances in connective technologies, particularly 5G, have been a game-changer in terms of how games are distributed and consumed, and this may have an impact on the successful rollout of cloud gaming in its current guise where previous attempts have failed.

Taking a step back to consider the history of cloud gaming, Lewin is ideally placed to advise on the maturity of the technology: “My history was in cable, but on the gaming side,” he says. “The battlefield is strewn with bodies of this attempt to bring gaming into a subscription service, into cable operators. In 1994, Sega and Time Warner cable tried the Sega Channel, which was to connect with the Genesis set-top box and download games to the TV set. OnLive was the first game streaming company back in 2009, and again Stadia recently closed down with Google, so it’s a very difficult product for pay-TV and cable operators to get into because the gamer is a very different audience and very different use-case than video consumption.”

Cloud gaming

“There’s some audience education that needs to take place as to why cloud gaming is important, but it’s definitely coming and it’s a pretty phenomenal technology.” - Blake Lewin, Product Manager for Gaming & Entertainment at Verizon

So what is cloud gaming? Put simply, a game is launched from any device with either an app or web browser, and the game itself is played on a server in the cloud. Rather than having a computer or console in the same room rendering actions, you have the GPU and CPU sitting in the cloud. The signal from the controller (which can also be your smartphone or tablet) goes to the cloud, creates an action on the game, and this is rendered, encoded, and sent down as video.

“So you’re literally playing a game that’s sitting on a server somewhere,” enthuses Lewin. “The reason that it’s taken 20 years for cloud gaming since its inception until now to really become a thing is because the network is a critical piece of it, you have to have low-latency, high throughput, and your servers have to be able to do the encoding very very quickly, because there can be no latency right? When you push a button, you expect to see a muzzle flash if you will, on the screen, as if you were playing it natively.

“So cloud gaming provides a tremendous opportunity for the future, because in the future you’ll be able to play games that would not be able to run on any single device, but right now it’s like, “okay, well I can play it on my device or I can play It in the cloud”, so there’s some audience education that needs to take place as to why cloud gaming is important, but it’s definitely coming and it’s a pretty phenomenal technology,” says Lewin.

Challenges

Deutsche Telekom knows firsthand about some of the challenges in bringing the concept of cloud gaming to TV audiences, having launched MagentaGaming in 2019/20. “It failed, like a lot of other services at that time,” says Mike Echternach, Senior Commercial Product Manager TV, Deutsche Telekom Group. “But as with every failure, there was a lot for us to learn, and even for a big company like Deutsche Telekom you can’t just build from scratch into a huge market like gaming and say “ok now we’re here and we have a product.”

“If you want to establish a service yourself, you really need content, content is king, not only in TV but also gaming.” - Mike Echternach, Senior Commercial Product Manager TV, Deutsche Telekom Group

At Deutsche Telekom, Echternach currently works in the TV team and is in charge of product enhancements and business value prioritisation, including gaming. In his previous position, he led the company’s gaming partnership team managing accounts with Microsoft Xbox, PlayStation, and ESL Faceit Group (EFG). “So what were the major hiccups? One major hiccup is that you need to have a community where you can scale a service like this,” he says.

“Just thinking from a broadcaster perspective “I have a TV audience and for my young guys, this will match if I add gaming”, that doesn’t work out because they have different needs. It’s more about a fight for eyeballs between classical TV content and active gaming, and that’s one of the reasons the gaming industry is bigger than the movie industry.”

Echternach continues: “Even as a telco with big pockets, if you want to establish a service yourself, you really need content, content is king, not only in TV but also gaming, and if you cannot afford to buy the license rights for AAA games on your service to differentiate from other services then where is your story.

“So we backed off as we couldn’t continuously invest until the market grows like it’s anticipated to grow, so we had to make a hard decision to switch to a partner-led approach when it comes to content services, and the decision in terms of our entertainment strategy is mainly to extend our TV aggregation to a broader entertainment aggregation, which means booking add-ons like those gaming subscriptions to the package,” he says.

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Current appetite for cloud gaming

While gamers will be familiar with Tencent Games and its catalogue of titles, Tencent Cloud is more akin to the AWS division of Amazon. Leading Tencent Cloud Europe’s game tech and cloud business development team, Jorvik Zhang believes that social gaming will have the greatest success for cloud gaming in the current market. In one example, Zhang discusses how a TikToker or influencer could be playing a game with fans over social media at the same time. “That has some very interesting scenarios for cloud gaming in the near future,” he says. “We’ve also observed more and more titles being developed across different platforms, especially across PC and mobile.” Zhang cites Genshin Impact as one such example.

So what type of games currently lend themselves to cloud gaming? According to Zhang, the popularity of game genres fluctuates massively, recycling from one gaming type to another. But reverting back to social gaming, he says there is one unique feature to consider: “Social gaming is not only about playing games, it’s about communication among gamers, and this is a new trend.”

This is a point backed by Lewin: “There’s a quote from game designer Raph Koster (Ultimate Online) who made the comment that single-player games are an anomaly in the history of gaming. Games have always been a social experience.

“As we’ve moved to digital distribution the ability to make them more social and more involved is coming back to what gaming has been historically, so it’s not going to stop.”

Target market

Christopher Turner, Director of MRVIGES, SULC in Louisianna, who also coaches the undergraduate esports team, stresses the importance of understanding the end user to capture their attention, whether that’s esports enthusiasts or potential cloud gamers, and warns against grouping all gamers under the same banner.

“Gaming is bigger than any ball and stick sport, any movie, any type of entertainment like music, gaming is bigger than all of those combined,” he says. “So when you think about that, when you think about the consumption and what are gamers, you can take Candy Crush, and think about who’s playing on the cloud, and who’s playing on mobile, and that’s fine, but from a cultural standpoint, you have to understand you’re dealing with subcultures. Somebody’s playing Clash of Clans, that’s a subculture, but they all make up the gaming industry.

“Gamers get offended when you put them together, they’re gamers but they’re separate.

“You need to understand the culture, you need to learn how to captivate the culture,” he says.

This is a point also supported by Echternach: “You really need to make sure, as a broadcaster, operator, or whatever it is for your company, you really need to identify what target group you want to tackle, because there is not one overall gamer.”

To hear more from IBC365’s webinar on the Collision of Gaming and TV, including discussions around latency, 5G, and business models, click here.

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