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The gaming industry’s widespread success in the era of Covid-19

Yehia El Amine

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gaming industry

Gaming has changed significantly over the years; and massively so during the novel COVID-19 pandemic.

Not many industries can look back at 2020, wipe the blood, sweat, and tears off their faces and say “okay, the worst is behind us.” Even less so, are the industries that didn’t just survive during a bustling year full of hardships, all while stuck behind the confines of our home.

As if a response to a hail Mary, global lockdowns were exactly what the gaming industry needed to thrive, grow, and propel itself onto new heights among all the chaos surrounding the world.

At the end of 2019, the global gaming market was valued at $151.55 billion, and now it’s currently on track to reach a value of $256.97 billion by 2025, registering a CAGR of 9.17 percent, according to global research firm Mordor Intelligence.

The industry took widespread control of at home entertainment, as cinemas and theatres continued their “closed-doors” policy to prevent the disease.

According to a survey conducted by the Hollywood Reporter, The U.S. saw a gaming growth of 45 percent, with France (38 percent), U.K. (29 percent), and Germany (20 percent). Online play has also increased, with respondents consuming more time spent playing games with others via the internet connection.

Decisions, decisions…

The gaming industry strongly prevailed over the year, accelerating new technological innovations that birthed several new players onto the scene, which permeated a strategical question for the industry, albeit a positive one.

While it is expected that every facet of the market – console, mobile, subscriptions, cloud, AR, VR, and esports – will perform strongly during 2021, the question of “where to play?” renders itself hard to answer when faced with so much variety at the palm of everyone’s fingertips.

“The dilemma game companies must face is how best to monetize their content while juggling the often competing aims of finding the widest possible audience, maintaining goodwill from that audience, and not sacrificing too much control to other platforms,” a report by global research Omdia highlighted.

The console wars of 2021

Every release of new generation gaming console brings with it the beginning of a new console war between the world’s leading tech companies.

According to the Omdia report, Console hardware and software revenue will rise by 5.2 percent to $36.3 billion thanks to the recent launch of Sony’s PlayStation 5 and Microsoft’s Xbox Series X. In parallel, Console games accounted for $45.2 billion of the $159.3 billion global gaming market in 2020, according to market research firm Newzoo.

However, both titans of the gaming world are taking different approaches to attract gamers’ attention toward their respective platforms.

Microsoft’s Xbox are heavily banking on and marketing their subscription service called Xbox Game Pass, which has seen phenomenal growth. While its rival, Sony is touting its marquee lineup of exclusive content and services.

The ongoing health crisis is serving the industry by delivering rapid growth.

“It’s clear that the COVID-19 pandemic drove a sharp increase in console gaming in 2Q20, which has translated into, in some cases, record-breaking revenue outcomes,” Lewis Ward, research director of gaming and VR/AR for marketing firm IDC, noted in a recent report.

New kid on the block

While the console wars were at each other’s throats over console market share dominance, a new technology surfaced during 2020, which is expected to have its own share of the market: Cloud Gaming.

In cloud gaming, the server, where all the games are stored, does all the computation work, which includes game scene rendering, game logic processing video encoding, and video streaming.

This new sector is seen as a serious competitor for the traditional game market.

According to Omdia, Cloud gaming will have a breakthrough year with vital pieces finally coming together, with spend reaching $4 billion, a 188 percent increase from 2020. “Crucially, cloud gaming services will add to the on-console gaming experience while attracting a slew of new gamers who do not own consoles or PCs,” the report added.

Players such as GeForce Now – developed by U.S.-based computer game company Nvidia – emerged in mid-2020, which is a cloud-based game streaming service, delivering real-time gameplay straight from the cloud to your laptop, desktop, Mac, or Android device, merely requiring a good internet connection to play, without the need for beefy hardware specs.

However, content and ISPs will determine cloud gaming’s future, says Mat Piscatella, Industry Analyst at NPD Group.

“All of the big cloud players are now in market, and the tech has been proven to work. But adoption has lagged many predictions. A lack of compelling exclusive content on the cloud-exclusive services is one barrier. But that can be accounted for with investment and/or time,” Piscatella was quoted as saying to GamesIndutry.com.

He further added that what ISPs decide to do with data caps and high customer costs is another matter. “In 2021, this challenge will not be solved for, and cloud will continue to struggle to gain momentum, particularly in the U.S.” Piscatella highlighted.

No where to go but up

While the gaming industry is expected by experts far and wide to continue growing in the future, other elements are also aiding its climb to the very top of the entertainment food chain: the increase in popularity of eSports viewership.

The report by Mordor Intelligence highlighted that eSports are witnessing substantial market demand in the current market scenario and are thus driving the overall gaming industry across the globe.

Twitch –a live-streaming service owned by Amazon – enjoyed a really good year.

The live-streaming site managed to clock 17 billion hours watched last year, which is a full 83 percent higher than 2019’s 9 billion, according to the latest report from StreamElements and Arsenal.gg. Twitch’s insanely successful rise to power has prompted social media giants to release their own live-streaming services such as Facebook Gaming and YouTube Gaming.

“Twitch, YouTube, and Facebook all experienced major jumps in viewership traffic, which includes Twitch hitting 3 back-to-back milestones from October to December to end with a record high of 1.7B hours watched in that final month,” writes Doron Nir, CEO of StreamElements.

For YouTube, that meant 10 billion watch hours in 2020; Facebook Gaming hit 3.59 billion, a jump of 166 percent.

Regardless of who will reign supreme during the battle for gamers’ attention and money, the message remains crystal clear: the gaming industry has become even more mainstream than ever before, as options are continuously growing to meet the subsequent increase in demand.

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Yehia is an investigative journalist and editor with extensive experience in the news industry as well as digital content creation across the board. He strives to bring the human element to his writing.

Telecoms

Deutsche Telekom suggests upcoming towers partnership

Karim Hussami

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Deutsche Telekom suggests upcoming towers partnership

“Because everybody does something, this is exactly why I’m not doing it,” Tim Hoettges, Chief Executive Officer of Deutsche Telekom said, referring to the current trend of telecoms operators selling off tower assets for sizeable sums of money. “It might be right that you have to monetise your towers to deleverage your balance sheet… [but] we don’t need that today,” he said.

Deutsche Telekom will not part with its tower assets, despite recently reaching` a deal of that nature in the Netherlands, but it could look to float its passive infrastructure business or seek out a tower partnership.

Orange CEO Stéphane Richard recently named Deutsche Telekom as an ideal partner in the towers space; while the telco wants to retain control of its own towers, that could mean co-control with another big operator, Richard explained.

There were no formal talks happening with Deutsche Telekom – or Vodafone, Orange’s other perfect partner – when the CEO made the revelation.

Deustche Telekom appears to be following a similar strategy to Orange.

“It always takes two to tango,” said Hoettges, speaking at the German incumbent’s 2020 results call on Friday. “We might have a partner, where we have synergies and a value-enhancing story,” he said, a comment that doubtless caught the attention of executives at the operator’s French peer.

Passive infrastructure assets

Telefonica is one of the big names selling off towers, and it was honest about the fact that debt reduction was one of the main drivers of the €7.7 billion deal it inked with American Tower in January.

But for Deutsche Telekom, towers and their growing value are a strategic asset, “not just selling something and getting the money,” as Hoettges put it.

The operator brokered a deal for towers partnership in January, to combine its towers in the Netherlands with those of Cellnex and simultaneously create a fund in partnership with the towers firm to invest in passive infrastructure assets.

“This is a classic DT deal. We create optionalities for value-enhancing businesses outside…of our strategic envelope,” he said.

Benefits of towers partnership

As for the benefits that comes out of sharing networks, they include: the increase in the speed of opening new fields and enables the subscribers to provide network coverage to wide areas in a faster way with lower CapEx potential.

Operators also have chance to satisfy their customers with the quicker network coverage, as well as operators will start making money as of the first day by removing the field installing process.

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Telecoms

MTN faces rocky situation in Syria, hampering Middle East exit

Inside Telecom Staff

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MTN faces rocky situation in Syria, hampering Middle East exit

South African operator MTN is facing a rocky situation in Syria, as the company was placed under a judicial guardianship following a court battle that went in favor of the country’s telecoms regulator.

The Syrian Telecommunications and Post Regulatory Authority had previously accused the provider of mismanagement and violations of its licensing contract. According to Reuters, the state had claimed that the alleged violations deprived it of revenue, while MTN denied the allegations and said last week that it intended to appeal.

The regulator filed a lawsuit against the South African courier before the administrative court of Damascus seeking interim measures against MTN’s Syrian operations. The move cripples the company’s exit from the Syrian market, as it was reportedly hoping to settle a deal worth $65 million, amounting to 75 percent of MTN’s Syrian unit, Reuters reported.

It is worth mentioning that the administrative court of Damascus appointed MTN Syria minority shareholder Tele Invest as its guardian, which was primarily tapped to become the buyer of the Group’s 75 percent stake in its Syrian office.

The judicial guardian is responsible for managing its day-to-day operations.

The sale to TeleInvest is meant to be part of MTN Group’s plan to exit the Middle East, corresponding with its new strategy to focus on its core African markets in the medium-term future.

MTN Group highlighted in a statement late last week that it “strongly disagrees with the allegations made before the court” — which have yet to be made known — as well as the decision and intends to file an appeal. In addition, the group is also considering other appropriate steps to take in light of the ruling.

According to the provider, in the six months to June 2020, MTN Syria contributed 0.7 percent to the group’s reported earnings before interest, tax, depreciation and amortization. At that time, the net assets attributable to MTN Syria in the MTN Group accounts had been written down to the estimated recoverable amount of $80 million.

Reuters had also reported that MTN’s operations in the Middle East have been the center of wide controversy, with allegations over its use of bribes to win a 15-year operating license in Iran, while, in parallel, aiding militant groups in Afghanistan; MTN, however, denies all the allegations.

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Telecoms

STL signs record high $100 million deals across MEA

Inside Telecom Staff

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STL

India-based digital network integrator Sterlite Technologies (STL) announced on Monday that it has renewed and extended deals with leading telecoms providers in the Middle East and Africa region (MEA).

According to a company statement, the deals are worth more than $100 million, taking STL’s order book to a record high, while exhibiting the company’s unwavering focus on building future-ready digital networks within the region.

“STL is building solutions to empower its customers in the MEA region for optical connectivity and network software, enabling FTTH and 5G deployments.  We are proud to be a part of the progress of the Middle East and Africa. With our deep technology expertise and growing talent base, we will continue to deliver on the full potential of digital networks, providing enhanced experiences to consumers and businesses alike,” speaking on the deals, Sandeep Girotra, Global Sales Head, STL, said in a statement.

The global pandemic has pushed many telcos to heavily invest in building digital networks to be able to meet the rising demand for connectivity from people remaining indoors due to lockdown measures. STL has capitalized on this and expanded its presence in the region with their fully 5G ready Opticonn and Software Solutions.

“Our unique end-to-end solutions enables customers to build 5G hyperscale networks at a fast pace with lower long-term Total Cost of Ownership (TCO). These multi-years, multi-million-dollar deals range from optical connectivity solutions to network solutions,” the company said.

According to STL, one of the large-scale deals has been signed with a leading telco in the UAE to advance its 5G, 4G and FTTX network infrastructure through STL’s Opticonn Solutions, including onshore logistics and warehousing. Another multi-million-dollar digital transformation partnership has been formed with the leading telecommunications group in North Africa.

The unnamed telco will deploy STL’s digital billing solutions to 7 million subscribers across the region.

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