The new era of mobile networks and its impact
on gaming

Foreword

03

1. Evolution of the Gs

04

2. New Era of Networks

12

3. How 5G Ready Are We?

20

4. New Gaming Experiences27

Foreword

The fifth generation of mobile networks—5G—is undeniably
one of the most exciting developments in mobile
technology, offering users far faster speeds and morereliable connections than current options.
The 5G standard was first issued by ITU-R in 2015 andfinished with new standalone specification in early 2018.
After years of planning, 5G became a reality for consumers
in 2019 with South Korea’s three telecom companies—SK
Telecom, LG Uplus, and KT—rolling out the world’s firstcommercial 5G networks in early April. Many countries
including the U.S., the U.K., and China followed suit. By theend of 2019, there were more than 20 countries in theworld that had already laid down infrastructure for 5G (withcommercial networks). Still, coverage is mostly limited to aselect few cities or even specific neighborhoods. Even
though the 5G rollout is still in the early stages, consumers
are already eager to try out the latest mobile technology.

On the hardware front, leading mobile brands like Samsung,Huawei, Xiaomi, Vivo, and OPPO have already launchedtheir first 5G models and are all set to introduce a full lineup
of 5G devices in 2020. Apple is also rumored to launch a 5G
iPhone in 2020.

Peak data rate that 5G istargeting to reach.

Despite all the latest developments, 5G is still in its infancy.
Drawbacks such as mmWave’s short range are challenging
engineers to construct an uninterrupted service. 5G mustalso provide a compelling use case.

While it might be too big a claim to say that 2020 will be“the year of 5G”, it certainly marks the beginning of themarket’s transition toward the technology. In this report,
we take a look at the history and current state of mobile
networks, identify key players in the development of 5G,
predict the growth in the 5G smartphone market, and divedeep into 5G’s impact on gaming and beyond.

TIANYI GU
Market Analyst© Newzoo 2020

3

1

EVOLUTION OF
THE GS
Development of mobile networks

A brief history of mobile 2G network development

1990

1995

1991
Radiolinja launched
the first 2G networkon the GSM (Global
System for Mobile
Communications) in
Finland. 2G’s major
improvement overthe previous
generation of 1G
cellular networks isthat radio signals
used by 2G
networks are digitalrather than analog.

1992
Short Message
Service (SMS)
was introduced
to the public.

© Newzoo 2020

1995
GPRS (General
Packet Radio
Service), also known
as 2.5G, which
supports packet
switching, wasintroduced. GPRS
could theoreticallyreach downlink
speeds of up to
171Kbps.

1997
EDGE (Enhanced
Data Rates for GSM
Evolution), also
known as 2.75G,
was introduced.
Data speeds wereincreased up to
384Kbps, marking
EDGE as an earlypreview of 3G.

…

TODAY
Many mobile
carriers acrosscountries suchas the U.S.,
South Korea,
and Japan havealready or will
shut down 2G
networks in the
future todevelop newer
technologies.

MAJOR INNOVATIONS ENABLED BY 2G THATREVOLUTIONIZED THE MOBILE WORLD
1

SMS text messages, which later developed into
new forms like picture messages and multi-media
messages.

2

Conversations are digitally encrypted.

3

Roaming supported.

4

E-mails.

5

Web browsing.

BREAKTHROUGH IN MOBILE DEVICEDEVELOPMENT

The iconic phone of the2G era: Nokia 3210,
launched in 1999.

The first camera phone:
Sharp J-Phone,launched in 2000.

5

A brief history of mobile 3G network development

2000
2001
NTT DOCOMO in
Japan launched thefirst commercial WCDMA 3G mobile
network. Data
speeds could reachup to 2Mbps forstationary or walking
users, or 384Kbps
for users in a moving
vehicle.

2002
3G networks wereconsecutively set up
in mature markets,
including the U.K.,
the U.S., and South
Korea.

2005
2008
Apple announced its
first 3G smartphone
iPhone 3G in June.
Two months later,
the first Android
phone T-Mobile G1(manufactured by
HTC) was released.

…

TODAY
3G is still themainstream mobile
telecommunications
technology aroundthe world. According
to Ericsson, by theend of 2018,
approximately 95%
of the global
population lived inareas coved by 3G
mobile cellular
networks.

MAJOR INNOVATIONS ENABLED BY 3G THATREVOLUTIONIZED THE MOBILE WORLD1

New generation of smartphones.

2

Large adoption of mobile Internet.

3

Web-based applications and audio and video files.

4

Mobile gaming.

5Video calls.

BREAKTHROUGH IN MOBILE DEVICEDEVELOPMENT2009
The launch of
iPhone 3GS
helped enablevarious forms ofentertainmenton the mobile
screen.
The revolutionary phoneof the 3G era: iPhone
3GS, launched in 2009.

© Newzoo 2020

Samsung’s first high-end
smartphone Samsung
Galaxy S, launched in 2010.

6

A brief history of mobile 4G network development

2009
TeliaSonera from
Sweden launched
the world’s firstcommercial LTE
mobile services in
Stockholm and Oslo.
It was debatable,
however, whether or
not the network
qualified as 4G LTE,
as the data speeds(100Mbps) did notcomply with ITU-R’s
requirement of
1Gbps.

© Newzoo 2020

2010
ITU-R recognized
LTE-Advanced,
WirelessMANAdvanced, LTE, andWiMax as 4G. These
technologies
provided substantial
performance andfeature improvements
over previous
generations. The
improvements mainly
resulted from 4G’s
switch to all-Internet
Protocol (IP) based
communication,
which allows mobile
ultra-broadband(gigabit speed).

2012
YOTA from Russia
announced theworld’s firstcommercial LTEAdvanced (LTE-A)
network; yet, theterminals were notavailable until one
year later. Data
speeds went up to
300Mbps. However,the first LTE-A
compliantsmartphone—Samsung Galaxy S4
LTE-A—was only
introduced to themarket in 2013.

…

TODAY
4G is still the
predominant cellular
network today.
According to
Ericsson, by the endof 2018, around 75%of the global
population lived inareas coved by LTE
networks. According
to GSMA, in 2018,
mobile technologies(dominated by 4G)
and mobile services
generated $3.9
trillion of economic
value (4.6% of GDP)
globally.

4G’S KILLER APPS
1

Social network.

2

Music streaming.

3

Video streaming.

4

Mobile services.

4G LTE’s high bandwidth enables
multimedia entertainment on themobile screen. For example,
photos no longer needed to becompressed on social media.
High data speeds maximize thepotential for photo and video
sharing, which fulfills the optimal
nature of social networks. Musicand video streaming allows
consumers to access content onthe-go. Real-time mobile
services flourish on mobile,
enabled by 4G.

7

4G’s killer apps remain the most popular apps on mobile

4G-COMPATIBLE SMARTPHONES
June 2016 – December 2019 | Globalof all active smartphones in
December 2019 were 4G-compatible.

92.4%
67.6%

SOCIAL NETWORK

2.7Bn+

4.7Bn+

downloads on iOS &Google Play since 2015.

downloads on iOS &Google Play since 2015.

MUSIC-STREAMING

VIDEO-STREAMING

1.0Bn+

1.2Bn+

downloads on iOS &Google Play since 2015.

downloads on iOS &Google Play since 2015.

MOBILE SERVICE
Jun
2016

Dec
2016

© Newzoo 2020

Jun
2017

Dec
2017

Jun
2018

Dec
2018

Jun
2019

Dec
2019

Source: ©Newzoo | Global Smartphone and Tablet Tracker | ©Priori Data

0.8Bn+

0.2Bn+

downloads on iOS &Google Play since 2015.

downloads on iOS &Google Play since 2015.

8© Newzoo 2020

Low latency and high data speeds are key improvements, but they are not the only ones

<1ms
LATENCY

10ms
LATENCY

20GbpsPEAK DATA RATE

1Gbps
PEAK DATA RATE

100Mbps
USER EXPERIENCED DATA RATE

10MbpsUSER EXPERIENCED DATA RATE

500km/h
MOBILITY

350km/h
MOBILITY

10Mbps/m²
AREA TRAFFIC CAPACITY

0.1Mbps/m²
AREA TRAFFIC CAPACITY

1M connections/km²
CONNECTION DENSITY

100K connections/km²
CONNECTION DENSITY

3X
SPECTRAL EFFICIENCY

1X
SPECTRAL EFFICIENCY

100X
ENERGY EFFICIENCY

1X
ENERGY EFFICIENCY© Newzoo 2020

Source: ©International Telecommunication Union

10

Overview of commercial 5G development in key markets

Undeniably, 5G is one of the most exciting developments inmobile technology. In mature markets and many emerging
markets, it will become the next standard for mobile network
connectivity, offering users far faster speeds and more reliable
connections than current options. In 2018, and even as recently
as the beginning of 2019, many mobile businesses wereunconvinced of 5G’s readiness. While it might be too big a
claim to say that 2020 will be the “year of 5G”, it certainly
marks the beginning of the market’s transition toward thetechnology.
The world’s mobile markets are racing to establish 5G
networks. South Korea and the U.S. were the first two countries
to launch commercial 5G networks in April 2019, followed byseveral Western markets including the U.K., Germany, Spain,
Australia, and many countries in the Middle East including Qatar,
Kuwait, and UAE.
China granted 5G licenses for commercial use to the country’s
three major telecom operators in June and started a nationalrollout at the beginning of November 2019. In all the markets
where mobile 5G is currently available, however, coverage is
generally limited to a select few cities, or even specificneighborhoods within cities.
Other countries are following suit, with Japan, Canada, France,and India all on track for 2020 5G launches. Most countries,
however, are aiming for a full national rollout by 2025.

© Newzoo 2020Three South Korean telecom companies, SK Telecom, LG Uplus, and KT, worked
together to bring 5G to the country. The service became available to the publicin April 2019, making South Korea the first country to launch commercial 5G
networks. The service providers aim to reach 5G coverage for 93% of the
population by the end of 2019. According to the Ministry of Science and ICT, thecountry has accrued 3.98 million subscribers for 5G networks as of October 2019.

Verizon, AT&T, Sprint, and T-Mobile are the four telecom companies in the U.S.
that have commercial 5G plans available for consumers in selected cities. Nokia,
Ericsson, and Samsung are the leading 5G vendors in the U.S.

The first commercial 5G service was brought alive by Swisscom in Switzerland in
April 2019. The U.K. followed suit—EE launched the country’s first 5G network in
May with Vodafone and Three joining the fray in July and August, respectively.
At this point, 5G networks are also becoming available in Germany, Italy, Spain,
Austria, Ireland, Finland, and Romania. Most European countries are kicking off
their 5G rollouts in 2020.

China's three largest telecom companies—all state-owned—China Mobile, China
Unicom, and China Telecom launched commercial 5G services in November 2019.
China was previously aiming for a national rollout of commercial 5G in early2020.

Leading telecom companies in Japan, such as NTT DOCOMO, KDDI, SoftBank,and Rakuten, are aiming for a 2020 rollout of 5G networks. Intel, partnering withNTT DOCOMO, will bring 5G technologies for the upcoming 2020 Olympic
Games, providing 360-degree and 8K high-resolution videos, VR viewing
experiences, smart city applications, and AI-powered athlete training system.

11

2

NEW ERA OF
NETWORKS
Key players in 5G

Delivering the technology to end consumers

CLOUD SERVICES

CDN PROVIDERS

5G INFRASTRUCTURE
VENDORS

5G MOBILE CHIPSETS &TECHNOLOGIESMOBILE CARRIERSMOBILE DEVICE MAKERSDATA CENTER COLLOCATION/CONNECTIVITY

USER© Newzoo 202013

Cloud services, data center collocation/connectivity, and CDN providers

CLOUD SERVICES
Widespread adoption of 5G will disrupt the cloud computing world. 5G’s
high data speeds and low latency will accelerate the development ofmany technological innovations such as artificial intelligence (AI) and XR(augmented reality (AR) and virtual reality (VR)) that require massive
data storage and processing capacity. Undoubtedly, these technologies
will be much more efficient when cloud-dependent. 5G, in turn, ensures
seamless integration between cloud services and technologies.
DATA CENTER COLLOCATION/CONNECTIVITY
Data centers will play a key role in making 5G-enabled technology
innovations happen. To enable the full value and transformational
capabilities of 5G, data centers will have to improve their processes andinfrastructure. Moreover, 5G’s high bandwidth will drive the market’s
demand for low latency to the next level, which will naturally bring edge
computing alongside it. To data centers, this means data will have to be
stored and processed at different distributed storage centers rather thanaccumulated at a central data center. Essentially, 5G, coupled with edge
computing, will require a higher number of local data centers.

CLOUD SERVICES

CDN PROVIDERSDATA CENTER COLLOCATION/CONNECTIVITY

CDN (CONTENT DELIVERY NETWORK) PROVIDERS
CDNs serve as a geographically distributed network of servers that shareand load content from a data center to end-users’ network edge. CDNs
have been widely used in broadband, especially for video streaming
content, to reduce latency. Naturally, 5G and edge computing will
increase the demand for CDNs to ensure seamless connections to end
users. In fact, key CDN providers like Akamai and Fastly are alreadymapping out their strategy to meet the 5G challenge by placing more
powerful points of presence at strategic locations around the world.

© Newzoo 202014

Network infrastructure and mobile carriers
5G INFRASTRUCTURE
VENDORS

5G INFRASTRUCTURE VENDORS
The concept of 5G was born as early as 2008. Since then, many network infrastructure
providers have been proactively innovating their technologies to meet the new standards.
So far, Ericsson, Huawei, Nokia, Samsung, and ZTE are the most recognized 5G
infrastructure vendors across the world.
Ericsson, Nokia, and Huawei are reportedly the global market leaders (by number of signed
commercial 5G contracts). In fact, Ericsson and Nokia have won 80 and 63 commercial 5G
contracts, respectively (as of January 2020). While less is fully known about Huawei’s 5G
deals, the company reportedly had a total of 60 5G commercial deals signed outside China
by September 2019.
MOBILE CARRIERSMOBILE CARRIERS
Leading mobile telecom companies started to map out their 5G strategy as early as 2016. In
April 2019, South Korea became the first country to adopt commercial 5G. Up until thispoint, mobile carriers in more than 20 countries have officially launched commercial 5G
services (see the next slide #16), and many countries including Japan, Canada, France, andIndia are all aiming for 2020 launches (see slide #17); however, coverage is generally limited
to a select few cites, or even specific neighborhoods within cities. At the moment, 5G only
appeals to early adopters and many consumers are still questioning the price of the newservice. Operators also have to increase the cost of their data packages to facilitate thereturn on infrastructure investments. Once 5G becomes mainstream to consumers, 5Genabled mobile applications, such as cloud gaming, will naturally require a big jump in data
consumption. This aligns with mobile telecom companies’ core business model of selling
larger data packages. On the other hand, these applications could mark the end for data
caps in countries like the U.S..
USER© Newzoo 202015

Overview by regions | As of December 2019

MIDDLE
EAST© Newzoo 202016

Overview of carriers which are aiming for 2020 5G launches© Newzoo 202017

5G chipsets and smartphones
5G MOBILE CHIPSETS &TECHNOLOGIES

5G MOBILE CHIPSETS & TECHNOLOGIES
5G mobile chipsets are the key component in 5G-compatible mobile devices. When it comes to
5G modems, Qualcomm holds a strong leadership position in the space. With a long history inmobile telecommunications, Qualcomm has been actively involved in developing the 3GPP 5G
standard, and it came as no surprise when the company announced the first 5G modem
Snapdragon X50 back in 2016. Up until this point, almost all existing 5G devices use
Qualcomm’s Snapdragon SoCs, except for Huawei, which uses its chip arm HiSilicon to build
chips based on Arm technology, Samsung, which builds its in-house 5G-enabled modem
Exynos based on Arm technology, and MediaTek, which also uses Arm technology in its
chipsets.

The Taiwanese company MediaTek is playing a pioneering role in 5G chipsets. In November
2019, MediaTek announced its high-end 5G SoC Dimensity 1000, powered by Arm Cortex-A77
CPU and Arm Mali-G77 GPU. In fact, MediaTek was the first silicon vendor to announce a
product based on the new Cortex-A77 CPU—only a few days after Arm publicly revealed the
new microarchitecture.

MOBILE DEVICE MAKERS

MOBILE DEVICE MAKERS
5G is undoubtedly under the spotlight of the mobile device market in 2020 and will remain so in
the following years. Leading mobile brands like Samsung, Huawei, Xiaomi, Vivo, and OPPO havealready launched their first 5G models and are all set to introduce a full lineup of 5G devices in
2020. Apple is also rumored to launch a 5G iPhone in 2020. With leading brands participating,more and more consumers will be lured to the 5G ecosystem. The 5G rollout, however, is still inthe early stages. We predict that it will still take three to four years for the technology to
become mainstream to consumers.

USER© Newzoo 202018

Overview of the specs

SAMSUNG GALAXY S20+ 5G
6.7-inch with 1440 x 3200 resolution
Exynos 990/Qualcomm Snapdragon 865 with 12GB RAM
4500 mAh battery

OPPO RENO3 PRO
6.5-inch with 1080 x 2400 resolution
Qualcomm Snapdragon 765G with 8/12GB RAM
4025 mAh battery

SAMSUNG GALAXY NOTE10+ 5G
6.8-inch with 1440 x 3040 resolution
Exynos 9825/Qualcomm Snapdragon 855 with 12GB RAM
4300 mAh battery

XIAOMI MI 9 PRO 5G
6.39-inch with 1080 x 2340 resolution
Qualcomm Snapdragon 855+ with 8/12GB RAM
4000 mAh battery

HUAWEI MATE 30 PRO 5G
6.53-inch with 1176 x 2400 resolution
HiSilicon Kirin 990 5G with 8GB RAM
4500 mAh battery

VIVO NEX 3 5G
6.89-inch with 1080 x 2256 resolution
Qualcomm Snapdragon 855+ with 8/12GB RAM
4500 mAh battery© Newzoo 2020

Source: ©GSMArena

19

3

HOW 5G-READY ARE
WE?
5G-ready mobile devices© Newzoo 2020

of all active smartphones
were 5G-ready as of the endof 2019, which is 7.5 million
worldwide.

active 5G-readysmartphones predicted by
the end of 2022, which willbe 21.8% of all active
smartphones worldwide.

© Newzoo 2020

With 4.2 billion active mobile devices predicted by the end of 2020

SMARTPHONE USERS AND ACTIVE SMARTPHONES

ACTIVE SMARTPHONE USERS

Global | 2018-2020

Per region | 2020

Smartphone users

Active smartphones

4.2Bn
3.9Bn
9%

3.6Bn

3.5Bn
25%

3.3Bn

9%

3.0Bn
2020 TOTAL

9%

3.5BN
+6.7%

6%

YEAR ON YEAR

13%
12%
17%

2018

© Newzoo 2020

2019

2020

Source: ©Newzoo | Global Mobile Market Report23Less than 1% of all active devices were 5G-ready by the end of 2019

DISTRIBUTION OF SMARTPHONES BY CONNECTIVITY
June 2016 – December 2019 | Global
5G

4G

3G

of all active smartphones were 5Gready by the end of 2019, which is
7.5 million smartphones worldwide.

2G or below

4.5Bn

2G: 17M
4.0Bn

3G: 272M

3.5Bn

4G: 3,614M

3.0Bn
2.5Bn

#1 MARKET
by 5G penetration
In December 2019, 11.3% of all
smartphones in South Korea were
5G-ready, making South Korea the #1
market by 5G penetration among all
active smartphones.

2.0Bn
1.5Bn

#2

#3

1.0Bn

0.8% in Dec 2019

0.5% in Dec 2019

0.5Bn

0.0Bn
Jun
2016

© Newzoo 2020

5G: 7.5M
Dec
2016

Jun
2017

Dec
2017

Jun
2018

Dec
2018

Jun
2019

Dec
2019

Source: ©Newzoo | Global Smartphone and Tablet Tracker

Australia is one of the first countries in
the world to launch 5G. 5G networks
became available in Australia as early as
May 2019, introduced by the country’s
largest telecom company Telstra.

24

China will overtake South Korea as the largest 5G market by active smartphones

ACTIVE 5G SMARTPHONES
Global | 2019-2022

of all active smartphones will be 5Gcompatible by 2022.
1,005.2M

CAGR 2019-2022#1 MARKET
by 5G smartphones
China will be the largest market in2022 by number of active 5G
smartphones. We predict that there
will be 391.5 million active 5G
smartphones in China by 2022,
accounting for 34.7% of active
smartphones in the country.

440.8M

120.3M
7.5M
2019© Newzoo 2020

2020

2021

2022

Source: ©Newzoo | Global Mobile Market Report25© Newzoo 2020

4

NEW GAMING
EXPERIENCES
5G’s impact on gaming
and beyond

Gaming is booming: consumers worldwide will spend over $160 billion on gaming in 2020

$189.6Bn

TOTAL MARKET CAGR
2018-2022$173.3Bn$160.5Bn$138.7Bn$148.8Bn

TOTAL MOBILE GAMESMARKET CAGR 2018-2022

2018© Newzoo 2020

2019

2020

2021

2022

Source: ©Newzoo | Global Games Market Report28

Mobile is the largest gaming segment and will remain so towards 2022PC

MOBILE$35.3Bn$68.2*Bn+2.8% YoY

+9.7% YoY

+3.3% YoY

+11.4% YoY$3.5Bn-15.4% YoY2019 TOTAL

46%$54.7Bn

BROWSER PC GAMES

21%$13.4Bn(SMART)PHONE
GAMES

24%

9% 2%

TABLET GAMES

37%

Mobile game revenues in2019 accounted for 46%
of the global market.

$148.8Bn

BOXED/DOWNLOADEDPC GAMES+7.2%$31.8Bn

YoY+5.2% YoY

30%

30%
CONSOLE$45.3Bn+7.3% YoY

*Due to rounding, tablet games ($13.4Bn) and (smart)phone games ($54.7Bn) add up to $68.2Bn.
© Newzoo 2020

Source: ©Newzoo | Global Games Market Report29© Newzoo 2020

Cloud gaming, in turn, could be the “killer app” of 5G

ALL PLAYERS WANT A PIECE OF THE CLOUD GAMING PIE

CLOUD GAMING SERVICES NOW ON MOBILE

Even though 5G is still in its infancy, the technology is already set to affect the games
business dramatically. One of 5G’s major use cases is that it allows for a smooth cloud
gaming experience. 5G’s low latency and the convenience of smartphones will makemobile a key platform for cloud gaming. Today’s mobile-first gamers are increasingly
exposed to midcore, immersive, and competitive game experiences—titles that werepreviously available only on console and PC. Cloud gaming and 5G will make many moreof these premium titles available on mobile. It is unclear if 4G connections will meet theminimum requirements for cloud gaming. However, it is likely that a better quality ofexperience will be required, making 4G not suitable in the long term. Therefore, 5G will
become necessary for gamers to enjoy cloud gaming virtually latency-free. Just as video
and music streaming were major selling points for consumers upgrading from 2G and 3G
to 4G, so too could cloud gaming become 5G’s killer app.

Hatch is a cloud gaming service exclusively for mobile. Rovio, thecreator of Angry Birds, and Japanese telecom NTT DOCOMO areboth investors. Hatch’s premium subscription ($7 to $10, varying
per country) offers access to 100+ premium mobile games. Noneof the games include ads or in-app purchases.

However, 5G is still far away from reaching its full potential. For the near future, cloud
gaming will be more limited by the readiness of the overall network than the hardware
capabilities of the client or server. Moreover, 5G millimeter-wave radio signals have ashort range and are more easily blocked by obstacles such as walls. These arechallenges for engineers looking to provide an uninterrupted mobile service.
While companies from various businesses like game publishers, tech giants, andhardware makers are fighting for a piece of the gaming pie, there’s a less obvious
stakeholder: communications service providers (CoSPs/Telcos). One primary value atelco can offer consumers is ultimately the convenience factor. Consumers already havean internet subscription, and adding a gaming service to that is a simple process for a
consumer already used to the concept of bundling. In fact, many carrier offerings are
already underway. For example, Swiss telecom company Sunrise launched its cloud
gaming service in November 2019. Hatch regularly collaborates with telecom companies
across the globe that launch 5G services, which then offer customers exclusive access to
Hatch’s premium cloud gaming service.

© Newzoo 2020

Sunrise, a telecom company from Switzerland, launched its cloud
gaming service Sunrise Game Cloud in November 2019,
partnering with white-label provider Gamestream. Priced at
CHF9.90 ($9.95) per month, Sunrise Game Cloud provides
consumers with 50+ console games on their 5G smartphones.
Similar to Hatch, games do not have ads or in-game purchases.

Project xCloud is a service offered by Microsoft which iscurrently in beta, allowing users to stream over 50 Xbox games
directly to their Android devices. The service is only available on
mobile now but will expand to other platforms in the future.

31

Cloud gaming’s impact on key mobile stakeholders
MOBILEPERIPHERALSMOBILEDEVICES
Cloud gaming will bring many premium titles
previously only available on PC / console to mobile.
OEMs have an opportunity to design the next
generation of 5G phones to capture the cloud gamer.

1.

Larger screen sizes have been a major trend in
the mobile market and are likely here to stay.
Foldable phones might pique the interest of
cloud gamers in particular.

2.

Larger screen sizes and longer play sessions forpremium games will simultaneously increase
power usage. Ultimately, widespread adoptionof cloud gaming will lead manufacturers tocontinue investing in longer-lasting batteries
and fast-charging solutions, which will require
efficient and performant IP on the SoC.

3.

Maintaining connectivity to Wi-Fi and 5G
networks is critical for the best cloud gaming
experience, leading to antenna design andplacement prioritization in mobile devices.

4.

5G is key in cloud gaming, with stakeholders
eager to establish 5G technology leadership, as
it can increase gamers’ engagement and drive
5G phone upgrades.

The core and competitive nature of premium
games may result in a spike in demand andrevenues for mobile gaming peripherals.

1.

In the future, mobile controllers will likely be
as complex as these controllers, albeit
smaller in size or collapsible for portability.

2.

It is also likely that we will see more
peripherals that are compatible across all
platforms, thanks to the platform-agnostic
nature of cloud gaming.

Along these lines, Microsoft is now experimenting
with Switch-like prototype Xbox controllers forphones and tablets. Razer launched Junglecat
controller to support cloud gaming on mobile.

Microsoft’s prototype controller
Source: ©Microsoft© Newzoo 2020

TELCOS

We have addressed opportunities for telcos in
the cloud gaming space by offering service
bundling (see previous slide #31), but there arealso challenges for carriers to meet.

1.

At the moment, telcos are spending big
on infrastructure/5G network upgrades.
Cloud gaming will potentially become
one of the largest consumers of internet
traffic in the coming years, and it remains
challenging for telcos to be able tohandle it and ensure low latency.

2.

Another challenge is data caps. If data
caps remain at their current level (e.g.,
50GB/month for T-Mobile in the U.S.),
only allowing gamers to stream Google
Stadia on mobile for roughly five hours at
1080p, they will discourage consumers
from using cloud gaming services on
their mobile networks. Cloud gaming
could be the catalyst that changes
Internet data cap policies.

Razer’s Junglecat controller
Source: ©Razer

32

The AR and VR opportunity

5G’S LOW LATENCY HAS THE POTENTIAL TO BE A MAJOR BREAKTHROUGH FOR THE TECHNOLOGIESVR has always required seamless latency to ensure that the experience is as immersive as possible; after all, immersion is a key unique value proposition for VR. 5G
technology could help solve VR’s current obstacles caused by latency, such as motion sickness, bringing untethered experiences to the platform. 5G would enable
processing to be done remotely through the edge computing infrastructure and the cloud. With its high bandwidth and low latency, 5G allows VR gamers to playwith and against others across all platforms (via online multiplayer modes). Similar to cloud gaming, cloud VR will largely reduce consumer’s investment in hardware,
further lowering the entry barrier to VR gaming.

VR IMMERSION OBSTACLES CAUSED BY LATENCY*only single-player mode games

Like VR gaming, low latency is also the key to AR gaming. AR is extremely data-intensive, requiring real-time processing. Today’s AR technology is hindered bylimited data capacity and 4G latency alike. Together with AI, 5G will bring AR gaming to the next level, with more immersive gaming experiences and multiplayer
modes. In the foreseeable future, mobile will remain the largest platform for AR gaming. Powered by 5G, more location-based AR games are expected.

5G’s higher bandwidth and lower latency also enable streamed XR content. Streamed XR services will give consumers the same flexibility and experience they havecome to expect from music and video streaming services. 5G can also improve the development of XR technologies, making it more accessible to consumers.

© Newzoo 202033

We expect to see multiplayer games flourish across all platforms

5G’S LOW LATENCY IS THE KEY TO GAMING’S PLATFORM-AGNOSTIC FUTURE
The global games market is moving toward a future in which platform choice is less relevant, driven by cloud
gaming, cross-platform game services, and even cross-platform multiplayer—all powered by 5G. The hardware
and screens that consumers use are becoming a non-factor. If graphics are rendered on the cloud, consumers
can access game content on whichever screen they like, whether that be a smartphone screen, a PC monitor, ora TV.
Besides cloud gaming, 5G will also bring us a true cross-platform gaming experience. Cross-play is under the
spotlight of the games market, attracting companies from all businesses to enter the fray. Apple Arcade, forexample, delivers multi-platform gaming experience by focusing on a common developer environment acrossiOS, MacOS, and Apple TV. While the mobile platform is integral here, the cross-play potential of Apple Arcade
is appealing for a different set of consumers. Other services currently available that offer the ability to play agame on any device include Steam Link, Omen, Tencent WeGame, and PlayStation Remote Play.

Obvious stakeholders in the cross-play pie are traditional game companies. Today, premium games such as Callof Duty already support cross-play between console and PC, but including mobile presents integration
challenges due to mobile hardware limitations. By moving data processing to the cloud and at the edge,
hardware capabilities are no longer a deciding factor for gaming experiences. 5G can ensure a seamless latency
across all gaming platforms. What’s more, multiplayer modes, which are already common on PC and console,are expected to flourish across all platforms. Today’s mobile gamers are increasingly looking for more midcore
and hardcore experiences, and we’ve already seen multiplayer games (e.g., MOBAs, shooters, MMORPGs)
coming to mobile, but with simplified game design, which limits the cross-platform possibility. 5G will break theboundaries of gaming—on VR and AR alike. With its high bandwidth and low latency, 5G will allow gamers toplay with and against others across all platforms via online multiplayer modes while on the move.

Steam Link allows gamers to enjoy the Steam gaming experience on
their mobile devices or TVs over the local network.

PlayStation Remote Play allows players to switch to other gaming
screens—such as phones and laptops—on the same broadband
network, without being tied to the TV.

All in all, 5G plays a key role in achieving gaming’s platform-agnostic future. Together with cloud and edge
computing, 5G ensures a seamless connection across all gaming platforms, with players from all over the world.

© Newzoo 202034

Gaming services will be in the midst of a content gold rush in the platform-agnostic future

CONTENT LIES AT THE HEART OF ALL GAMING SERVICES
As gaming moves toward a platform-agnostic future, subscription will become the norm. However, content isstill king and lies at the heart of any successful subscription service. After all, content will be a primary influenceon the adoption and retention of all gaming services. This development will further increase the power of gameIP owners, which already hold a strong position. As hardware is no longer a limitation for game enthusiasts, theunique selling points of the individual game services will instead take precedence. This is already happening in
the video-streaming space, in which Netflix, Amazon, Hulu, Disney, and other players are in the midst of acontent gold rush, with each one vying for the best content to attract consumers to their service. Content isking, and breaking down hardware barriers will only strengthen its crown. For a service to differentiate itself in across-platform future, owning IP and making exclusivity deals will be more important than ever. Naturally, gameenthusiasts are unlikely to pay for a service that lacks the games they enjoy.

MOGA Mobile Gaming Clip for Microsoft xCloud’s Xbox Wireless Controllers

Along these lines, Google, without any strong roots in the games business, is working very hard to secure(exclusive) content on its cloud gaming service Google Stadia. The company has confirmed that Ubisoft’s
UPlay+ will be available to purchase for Stadia users. In addition to third-party content, Google founded a new
development studio, Stadia Games and Entertainment, which will focus on developing unique experiences madepossible by cloud gaming.
Mobile will be an important access point of platform-agnostic gaming services, especially for mobile-firstplayers. With cloud gaming and cross-play, we expect to see more and more immersive, competitive, andinteractive gaming content adapted to mobile. AAA games will finally come to mobile without simplified gamedesigns. Powered by other developments in the mobile market, including mobile devices and peripherals (seeslide #32), premium gaming experiences will eventually land on mobile.

Google Stadia controller with phone mount “CLAW”© Newzoo 202035

© Newzoo 2020

5G’s impact on the entertainment business beyond gaming

INTERACTIVE LIVE STREAMING EXPERIENCE

HIGH-DEFINITION VIDEOS ON MOBILE

With the meteoric rise of Twitch and interactive streaming,
audiences have shown they love interacting with viewers andcontent creators. For example, Twitch Plays Pokémon hit the
Guinness World Record for having “the most participants on asingle-player online videogame” with nearly 1.2 million people.
Limited by low bandwidth and latencies, interactive live streaming
on mobile is still in its infancy in the 4G era. 5G is likely to bring new
forms of (direct) interactions with content, viewers, and streamers.

Today’s consumers are used to consuming video content on the go.
In mobile-first countries like China, many streaming services evenreport more users on mobile than PC. With 4G, video quality often
only reaches 480p while consumers still face other frustrations (loadtimes, buffering, playback, etc.). Coupled with the trend of large
mobile screens, 4K video content on mobile attracts consumers.
Along with edge computing, 5G will vastly reduce stalling andbuffering, and enable high-resolution mobile video content.
High Speed

5G
3D HOLOGRAMS
Volumetric display, also known as 3D holograms, will be vastly
improved by 5G. The technology requires more data than streaming
a 4K video, with low latency requirements. Images captured by 3D
cameras have to be uploaded to the cloud, where data processing isdone, and collected data is then rendered. With 5G, the process is
accelerated. 3D holograms can meet the increasing consumer
demand for immersive and interactive experiences in gaming,
esports, interactive live streaming, and more.

© Newzoo 2020

Low Latency

IMMERSIVE ENTERTAINMENT POWERED BY XR
XR’s applications stretch beyond gaming. With 5G, we expect tosee more gamification of other entertainment formats powered by
XR, such as hybrid sports events and cinematic experiences.
With XR, immersive viewing experience of live sports (including
esports) events and concerts will advance to a new level. 5Genabled stadiums will be able to stream content to the mobile
devices of a live audience from different views—for example, from a
sportsperson, a coach, an esports gamer, or even a singer.

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The merging of all content: streaming, playing, and sharing

GAMING IS THE MOST DISRUPTIVE ENTERTAINMENT

Gaming often acts as a first adopter to new technologies across theentertainment business. Soon, the industry will witness new ways
through which games will become an all-encompassing experience,brought forth by the union of streaming, playing, and sharing.

COMPANY

5G
NETWORKCLOUDINFRASTRUCTURE

GAMINGSERVICESTREAMING
PLATFORM

PARTNERSHIP

Throughout the 5G rollout, we expect to see all forms of entertainment
merge under one platform. In fact, the trend is already emerging in themarket. Google Stadia, while currently launched, does not yet have thetouted cloud-enabled features but plans to deliver them in the future.
The ability to share save states, for example, allows users (including
viewers) to jump into a game at the same point as another user—after
the original user has shared their save, of course. Through the
integration with YouTube, Google promises a seamless transition
between watching and playing. In the longer term, it is highly likely that
UHD video streaming and interactive live streaming (including various
live views and XR) will also be integrated with the platform as a onestop service, ensuring a seamless transition across streaming, playing,and sharing.
5G and cloud services will ensure a seamless experience for users, while
content will lure consumers to different platforms. Tech giants withleadership in all the spaces are likely to stand out in the competition—in
the East and West alike.

© Newzoo 2020

Tencent Egame

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The adoption curve of 5G is expected to be steeper than 4G, though the technology is still in its infancy

While the world is excited about 5G, the technology has along road ahead. The high frequency of millimeterwaves will naturally cause a shorter range of radio signals
and an abrupt drop-off in signal strength. To fully deploy
5G networks, a large number of 5G base stations and small
cells are needed.
What’s more, 5G-powered technologies such as moreadvanced AI and XR all require massive data storage andprocessing capacity. At the same time, 5G’s high bandwidth
will drive the market’s demand for low latency to the nextlevel. This means that other technologies—such as cloudand edge computing—must develop alongside toaccelerate 5G to reach its peak.
Despite all the obstacles and challenges, the market isseeing 5G happen faster than expected. It had been
generally estimated that the first commercial 5G network
would not be available to consumers until 2020, but it took
place one year earlier than anticipated. Consumers’ desire

for the technology drives every party involved—fromgovernments to OEMs—to accelerate the investment anddevelopment.
To consumers, 5G must also provide a compelling use case.
Gaming often acts as a first adopter to new technologies
across the entertainment business, and we believe gaming
will also be the major touchpoint between consumers and5G on the mobile platform. 5G will likely deliver gaming aplatform-agnostic future and mobile will be an important
access point for ‘platform-agnostic’ gaming services, suchas cloud gaming. In fact, cloud gaming could be the “killerapp” of 5G.

Latency that 5G is targeting
to reach.

All in all, the 5G rollout is still at an early stage. However,when the technology reaches its peak, it is bound to
revolutionize the world in many aspects. 2020 will be agroundbreaking and exploratory year for 5G, but anotherthree to four more years are expected before mainstream
consumer adoption.

TIANYI GU
Market Analyst© Newzoo 2020

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The new era of mobile networks
and its impact on gaming