Deutsche Telekom announced its cloud gaming service, dubbed MagentaGaming, will launch by the end of the week in an invite-only beta phase and become generally available in 2020, according to Telecompaper.
The service enables users to stream more than 100 games from the cloud on a variety of devices, including Android devices, Windows PCs (Windows 7, 8, 10), and Macs (MacOS X), and will be expanded in the future to support iOS devices and Xbox consoles.
Here’s what it means: Deutsche Telekom is the latest telecom to bet on the next frontier in gaming to boost returns from 5G.
As the 5G revolution looms, a number of telecoms have entered the cloud gaming space. In the last year alone, Verizon and LG Uplus revealed plans to launch cloud gaming services. Meanwhile, telecoms like Sprint, Vodafone, SK Telecom, and NTT Docomo are teaming up with cloud gaming companies like Hatch to provide 5G subscribers with access to their services.
Telecoms are capitalizing on cloud gaming services, which require high bandwidth and low-latency connections, to offer a 5G use case that’s captivating enough to drive consumer awareness and supercharge 5G adoption at scale — cloud gaming is expected to account for up to half of 5G data traffic by 2022.
Cloud gaming also presents an opportunity to push consumers interested in the services to upgrade to higher-value 5G pricing plans: Telecoms could bundle a gaming service subscription with a pricier 5G plan, for example.
The bigger picture: Cloud gaming is the next big opportunity for telecoms to expand their revenue sources and up the value of their plans as they’ve already exhausted the opportunity with other media segments.
Over the last decade, telecoms have become distributors of digital content like video and music as they expand the range of services on offer — but the gaming industry has remained relatively untouched. By adding cloud gaming to their list of offerings, telecoms will be able to open up significant revenue opportunities.
Their efforts to cater to gamers will give them a direct line to a lucrative market: The global subscription market for cloud gaming content is expected to be worth $2.5 billion by 2023, up from $387 million in 2018, according to IHS Markit.
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