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.

  1. 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.

  1. 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:

  1. 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.