Ribbon Research on Cloud Gaming Reveals Revenue-Generating Opportunities for 5G Networks

Westford, MA – Ribbon Communications Inc. (Nasdaq: RBBN), a global provider of real time communications software and network solutions to service providers, enterprises, and critical infrastructure sectors, today announced the findings of a recently commissioned independent research study. Based on the responses of more than 5,000 “ardent gamers,” the study outlines a $150 billion incremental opportunity in cloud gaming for carriers offering 5G networks, with their enhanced performance and improved service experience.

“5G-Native networks leverage advanced technologies including network slicing to offer deterministic performance, high speed, and strict service guarantees. These capabilities will help usher in new business and use cases for carriers to capitalize on,” said Patrick Joggerst, Chief Marketing Officer and EVP, Business Development, Ribbon. “The findings of this study, which will be reviewed at our upcoming 5G Perspectives event, prove that cloud gaming, combined with 5G, is a gainful area for carriers to address.”

The independent study surveyed more than 5,000 gamers who reported playing at least 3 hours per day prior to the Covid-19 pandemic in 5 countries. The results show that these gamers are aware of the arrival of 5G, recognize its capabilities, and are willing to pay more for the upgraded experience it promises to deliver.

Key findings include:

• 58% already pay a premium to their provider to enjoy the best gaming experience possible
• 79% would consider replacing their home broadband and mobile connectivity with 5G for a better gaming experience
• 95% would pay more for this improved experience, with 60% willing to pay 50% more (or $126 per month compared to the current monthly average of $84)
• 58% would switch connectivity provider as soon as they could if a competitor offered a high-quality gaming service with a new 5G subscription
• Based on the extrapolation of this survey data and publicly available gaming market forecasts from Newzoo, the opportunity to provide the high-performance connectivity to enable cloud games could be worth more than $150 billion to carriers deploying 5G

“Cloud gaming presents an important and lucrative opportunity for carriers who embrace 5G and deliver the improved service experience gamers crave,” said Lynnette Luna, Principal Analyst, GlobalData. “The rapid shift to mobile and cloud-based game delivery, combined with the higher data speeds and reduced latency 5G offers, create a better user experience for gamers and a revenue-rich eco-system that carriers shouldn’t ignore.”

In addition to the $150 billion 5G connectivity opportunity, carriers may derive additional revenue by forming partnerships with gaming content providers to sell subscriptions to cloud services and bundled packages.

“The research clearly shows that these avid gamers present a highly addressable audience for carriers. They are aware of the internet speeds they receive, understand the detrimental impact of latency on their gaming experience, and are prepared to spend what it takes to negate these issues,” Mr. Joggerst added. “Carriers that invest in and build standalone 5G networks will be the first to offer advanced connectivity and will find themselves well-position to form new partnerships with gaming content providers and dominate the 5G cloud gaming sector accordingly.”

Survey Methodology:

The survey was conducted among 5019 gamers from the US (1013) UK (1003) Japan (1001) South Korea (1000) and Germany (1002) who played for at least three hours per day prior to the COVID pandemic outbreak (the impact of the pandemic was also captured). It was designed to better understand the habits and pain points of ardent gamers aiming to create the optimal gaming experience both indoors and out.

Interviews were conducted online by Sapio Research in April & May 2020 using an email invitation and an online survey. At an overall level results are accurate to ± 1.4% at 95% confidence limits assuming a result of 50%.