How could we pick out the territories where the cloud gaming´s value proposal is best maximized?
There are several factors to take into consideration.
- High relative cost of gaming hardware
Territories with a high cost of gaming hardware based on their per capita income will have a higher entry barrier to video games. Countries such as India, for instance, where the PlayStation 4 price represents a staggering 7.4% of the average monthly income… or Brazil, where third party manufactures are absolutely prohibitive due to large import taxes.
- High broadband penetration
“Cloud gaming” refers to games that are streamed to Internet-connected devices. The remote server does all the heavy work, while your computer just receives streaming video (and audio) and sends input commands. To avoid lag, and make all this work seamlessly, it´s essential to have a stable internet connection of at least 8Mbps. A high percentage of population with broadband internet connection together with a large population will mark out the territories with larger TAM.
According to the above, the Top 10 territories best positioned for cloud gaming – classified by their TAM- would be the following, from top to bottom:
- Telco sector competitive environment
A third factor would be the need to stand out in saturated markets where telcos have to gain market share and find new ways of monetization. Competition drives innovation. A GaaS solution, with 0% piracy, represents a new revenue stream with a number of advantages for telcos: from a higher customer ARPU and lower churn to better brand perception and a justification of fiber.
Is the Spanish market ready for cloud gaming?
Here´s an overview of a market research on Spanish gamers trends and facts carried out by GFK on behalf of PlayGiga, during 2 weeks on September 2017.
The research is based on 1,004 online interviews (Sampling error: +/-3.09%)
- Lack of gaming hardware
About 50% of gamers own a last generation console or gaming PC, which means that the other half play with outdated hardware.
PlayGiga allows demanding games to be played in a low-spec Pc (or Mac!).
- Gamer want to play many games but cannot afford them
60% of gamers play more than 2 games every month but only 34% buy more than 2 games monthly. Which means that they cannot afford more even if the need to play is there (67% play more than 3 hours per week). But games are expensive, gamers spend on average between 30€ and 70€ per title.
PlayGiga offers unlimited access to dozens of console-quality games.
- What games do they buy? Blockbusters and genres they enjoy- mainly offline
Almost half of the research sample declare that they buy mainly blockbusters (FIFA, Call of Duty…) while 34% buy games of a genre they like, regardless how popular the game is.
PlayGiga has developed a cloud gaming service with a variety of games that caters for all tastes
A majority of gamers mainly play offline, either alone (34%) or in local multiplayer with family and friends (28%) while only 32% play mainly online. The remaining 5% play in other houses probably due to the lack of gaming hardware. 38% play between 3 and 5 weekly hours.
- Stable internet connections
Spain is well positioned in terms of broadband. More than 20 mbps connections are available in 65% of households.
Around 10 mpbs are enough to play in PlayGiga´s streaming services.
- Subscriptions are becoming widespread
Games are moving to a subscription model just as movies and music did before. Netflix is already present in 33% of our research sample households, while HBO is in 13% and Spotify Premium in 15% of them.
PlayGiga is a subscription based service.
- Parental control
Parent´s attitude towards videogames is positive but, as might be expected, 73% of parents demand controlled gaming for their children, both in terms of knowing what they´re playing and controlling gameplay time. Parents would like their children to play mainly edutainment (82%), but family gaming is also popular. 67% of the parents demand coop games to be able to play with their children. What children actually play is another matter altogether.
PlayGiga is working in a parental control both in terms of games and time allowed to play.