How Will 5G Change The Video Game Industry?

5G is set to disrupt many hi-tech industries, including the gaming industry. As the adoption rate for this new technology is still in its infancy, it may be worth looking into which aspects of the sector would be most affected as 5G-related developments continue.

What is 5G?

Before we define what 5G is, you are likely to be already familiar with its predecessor 4G. Most mobile phones in Canada today use the 4G LTE network. According to the Canadian Radio-television and Telecommunications Commission, LTE mobile networks covered 99% of the population. Approximately 92% of Canadians had access to LTE-advanced network services in 2017, and even more so today. 4G offers up to 100 Mbps download speed while 5G, the next generation of wireless network connectivity, will offer up to one thousand times more, up to 10 Gbps.

5G and the Video Game Industry

Those who aren’t tech-savvy may still be wondering what makes 5G so special. The shortest answer to this question, at least in the eyes of gamers, is the reduction in lag.

Most current high-speed home internet offers fast download speeds and slower upload speeds. This creates “lag,” in which there is a pause between a gamer hitting a button and their character taking an action.

Lag can completely destroy user experience, and it makes competitive gaming almost impossible. 5G offers improvements both in downloading and uploading data, reducing the lag users are faced with today. In a 5G gaming world, gamers can enjoy a more seamless experience.

What does this mean for the gaming industry? This jump in connectivity will have a direct effect on streaming services, mobile gaming, and AR / VR games.

Streaming Services such as Playstation Now and Google Stadia

One of the biggest uses for 5G technology is streaming services for video games. If you don’t already know, this works similarly to how you stream movies on services such as Netflix.

Netflix, the largest streaming service in the world has 139 million subscribers in over 190 nations and territories. Since it launched in 2007, more and more companies followed their footsteps. Amazon launched Prime Video, now with over 100 million members. Gaming industry giants also launched their own streaming services.

Sony launched its subscription-based video game streaming service Playstation Now in 2015. It offers over 700 games which players can access through their Playstation 4 and PC.

Google is also set to launch its streaming service, Google Stadia, in November 2019. It is said to allow streaming of video games in up to 4K resolution via Google’s cloud servers, accessible though desktop PCs, tablets, smartphones, and smart TVs.

Streaming services will continue to grow in popularity both in the entertainment and gaming industries, together with the increasing demand for faster internet connectivity such as 5G.

Mobile Gaming and Online Games

With the 5G improving internet speeds at home, it will also improve internet speeds in your pocket through your mobile device. As mobile adoption rates continue to rise, mobile gaming will continue to grow due to affordability and convenience.

However, many mobile games nowadays also require in-game internet connection for in-app purchases, score tracking, and online multiplayer battles. All these may contribute to lagging and wait times – which 5G would significantly eliminate.

AR and VR Gaming

The low latency levels of the 5G gaming experience will also encourage more developments in AR & VR-related games. It would allow augmented or virtual multiplayer experiences that are currently not possible given today’s network connectivity. With improvements in the standalone VR headsets, your mobile can seamlessly connect users to a virtual gaming world with other VR users without any breaks or lags in the experience.

Both Apple and Google are heavily investing in augmented reality (AR). In 2017, Apple announced ARKit framework while Google announced ARCore. Microsoft recently announced the Minecraft Earth mobile game, which may be the beginning of a new era of AR games.

5G and Innovation

Either way, 5G will revolutionize the gaming landscape. According to a BusinessWire report about the global 5G market (2019–2025), the market is expected to reach $277 billion by 2025 — that’s a CAGR of 111% during 2019 through 2025. 5G is a groundbreaking technology, and researchers and analysts already see a bright and prosperous future ahead.

This is why we recently included a 5G category into the portfolio of our Evolve Innovation Index Fund.  This investment fund provides Canadian investors with the opportunity to participate in the next wave of mobile connectivity. As global carriers invest billions in the development of the 5G network, this innovative technology is on the brink of disruption.If you are interested in investing in 5G and other innovative technologies, you may want to consider the Evolve Innovation Index Fund (TSX Ticker: EDGE). To learn more, click here.