4G & LTE: Putting the Social Back to Gaming

By way of background: LTE (Long-Term Evolution) is largely seen as a successor to current third-generation (3G) networks (UMTS, WCDMA, HSDPA, HSUPA, CDMA2000, EVDO, call me if you want more acronyms…). And with this new standard, there will be faster connections. LTE is capable of delivering speeds well in excess of 10MB/s over wireless networks. So, world, be prepared!

One of the obvious beneficiaries of LTE will be the games sector, home of the tech-savvy early adopters: ultra-high broadband + super-speeds + high-tech gamers = fantastic opportunities. But there is another group of gamers that may benefit more from high-speed access.

Let’s take a look at the games market that can probably – to this extent at least – be simplistically divided into two categories: a) hard-core and b) casual games. The former is comprised of massively multi-player online games (MMO) as well as fast-paced, high-end racing and action games. The latter is, well, everything from Solitaire to Scrabble and Tetris. And, yes, the latter is the genre played by far more people, including the online gaming industry’s "golden customer", the proverbial 42-year-old housewife from Ohio.

Whilst it is easy to see how a high-end action game would benefit from high bandwidth, the case may be slightly less obvious for the casual games space (but it’s there, on PCs alone, this is a $2.5bn+ market already today).

Given the casual games’ higher adoption rate across a much broader demographic, it is conceivable that carriers (the ultimate gate keepers for mobile content, at least in the world as we currently know it) would want to reach this golden customer, and a larger, more broad demographic. This demographic brings in higher spending power than geeky kids, and are faithful with predictable spending habits – a much safer and more promising target demographic than my 13-year-old son who will happily switch allegiance to providers the moment another one has something cooler, cheaper, slightly funkier, whatever … to offer.

So what can 4G do for this casual mobile games space? It brings, quite simply, a wireless digital media experience on par with our wireline one.

Who cares, you say? Well, this allows consumers to actually play as they did before the arrival of the first crude iterations of the Internet, and that is socially.

What was a game before computers and gaming consoles took over? Think about it. It was an intrinsically social activity (cards, board games, petanque, golf, you name it). People like personal social interaction in their games, they miss it, and now they are beginning to crave it again.

We have seen a huge uptake of social games on the Internet with tens of millions of consumers enjoying fairly simple games on Facebook and other platforms. And the next generation wireless networks will enable that again wherever you are (see here for a presentation I recently gave at Casual Connect in Hamburg on the topic).

So, high connectedness it is then! Games that will allow you to interact with peers, friends, even total strangers that happen to have the same passion for the same type of game around the world. Casual games – online and portable – will become a social activity again. It is a less fancy, less futuristic vision than all-immersive high-end niche products such as World of Warcraft (which will also see its fair share of fame once the wireless networks can support it) and it takes some of the sting out of concerns that digital games will make video zombies out of our children.

This development, with LTE as the backbone, opens a market to be counted in billions rather than millions, and most of them will be wireless (the number of mobile phones outnumbers the number of Internet-connected PCs by a ratio of 2.5:1 already today!). And this is where the true market opportunity lies, and we’re excited to be a part of it!

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