Consoles are an increasingly small part of the gaming industry and the least consumer friendly. They are the analog of gaming. If you want the latest games, you must buy a new piece of $700 equipment or upgrade your computer with an expensive graphics card that can handle the gameplay. Making it worse, each new game costs you an additional $50. And once you buy a console, you’re locked into that system and whatever games come along with it.
After you amass a mountain of games and spend your hard-earned cash on extra features to enhance your gaming experience, guess what? The company comes out with a new console — and most of the games you bought aren’t compatible with the new system. The cycle then restarts.
This model ate away at consumers’ wallets and was, and still is, generally inefficient. It’s also a big barrier to entry for game writers and developers, resulting in fewer diverse choices for gamers. Worse, the high upfront cost of gaming almost entirely edged out low-income gamers.
Thankfully, the market, in general, has changed considerably in large part to mobile gaming. Gaming companies can turn your mobile device into a gaming console by leveraging a cloud network and internet connections. This allows game writers and developers to create a greater variety of games with more educational values and relevance to more lives. They can also reach a wider audience due to the ubiquity of mobile devices.
You now have a multipurpose gaming console right in your pocket. In 2022, 80 percent to 90 percent of consumers own a smartphone capable of gameplay. This expands the market tremendously. For instance, the interoperable nature of the mobile gaming industry has also enabled companies like Apple, Google and Meta to compete with Microsoft, Sony and Nintendo in the gaming space.
Cloud gaming goes one step further. It’s like Netflix for gaming — once you pay a low flat rate, you can access any of the games the service offers. This could range from the traditional types you would find on a console to a litany of other innovative games that wouldn’t have a chance in the traditional marketplace. No longer must consumers shell out for the dinosaur consoles and stacks of cartridges, which means gamers from every economic group can be part of the gamer community. They only need to log in, select their game of choice at their fingertips, and play on.
All told, cloud gaming and ubiquitous broadband promises a new world of opportunity for gamers and developers.
But this augmented market also presents different chokepoints. The benefits to be reaped from “Gaming as a Service” could be undermined if the cloud gatekeepers step in and say, “We need a cut.” Apple, in particular, is notorious for demanding fees from apps that compete with their own content or else booting them from the store.
So what can lawmakers do to help? First, they can make gatekeepers like Apple and Google open up their gaming stores so that companies can compete. The most direct path here would be the passage of the popular and bipartisan Open Apps Market Act. Another would be for Congress to pursue broader antitrust legislation that ends online self-preferencing, like the American Innovation and Choice Online Act. Passing either — or better yet, both — would level the mobile playing field.
Second, the Federal Trade Commission can add more competition by approving pro-competitive mergers that can supercharge cloud gaming. For instance, the agency is reviewing a merger that will do just that: the Microsoft-Activision merger. This is a game-changer for Activision that, with Microsoft’s resources and tech, can add more consumer choices in the mobile gaming market. Even better, Microsoft has agreed to open its gaming store to allow all developers (even those outside of Activision) to choose their own payment systems. This is a win-win-win for the FTC, game makers and consumers.
Finally, this migration toward mobile gaming is great for competition, but it relies on ubiquitous, affordable broadband to work. Congress has already set the table by creating the Affordable Connectivity Program — a $30-a-month subsidy for low-income families — and allocating $42 billion for fixed broadband buildout. But the Federal Communications Commission still needs to move forward with the 5G Fund so that Americans in rural areas can enjoy the benefits of high-speed broadband on the go.
Openness, competition and affordable access are necessary for the future of gaming. It’s time to make them a reality.