Speed Merchants - how the connection is king
Increases in broadband speed lie behind the egaming industry's staggering growth. Yet even in mature markets, the speed delivered is far below what it could or should be. In emerging markets meanwhile, operators still provide their products as if users are using dial-up connections. Joanne Christie reports on how operators and suppliers address these issues.
THE DAYS WHEN WE WOULD SIT and wait patiently while our internet connection took a minute to load a page are long gone. These days we’d be on the phone to IT straight away if anything took more than mere seconds to appear in our browser.
But while broadband has increased the speed at which we access the internet exponentially in recent years, the move away from ADSL towards cable is opening up a whole new ball game in terms of speed.
With BT currently rolling out fibre-optic cables across various areas of the UK as part of its plan to eventually offer download speeds of 40-60 megabits per second (Mbps) to almost half the country by 2012, we’re well and truly on track to super-fast broadband. Such moves are replicated across Europe, with governments asking their major internet service providers (ISPs) to ensure broadband coverage of the majority of their markets, so that users in less densely populated areas can benefit from high-speed access to the internet.
Although many consumers think they’ve already got pretty fast broadband, with packages of “up to 20Mbps” routinely sold, operators and regulators know the reality is far different. According to a recent Ofcom survey of nine of the major ISPs offering “up to 8Mbps”, the average speed was more like 4Mbps and about 20% customers were getting less than 2Mbps. In peak evening hours, users were likely to see their speed drop about 20% due to an increase in demand during the time period.
However, Paul Beattie, vice-president of content operations at Orbis, says the nature of ADSL service delivery means those limitations are inevitable. “If you are with someone who is using BT as their service provider it literally is dependent on how far away you are from your exchange. If you are sitting three miles away from your exchange and you’ve got 4Mbps broadband then you’re probably lucky if you’re getting 1Mbps, whereas if you’re 200 yards away you might be getting something like 3Mbps,” he explains. “But with the cable companies they have these tower boosting cabinets on many of their streets, so if they say that they are giving you 8Mbps there’s a reasonable chance you are probably getting 7Mbps because it is done on a street-by-street basis.”
Of the ISPs it surveyed, Ofcom found Virgin’s cable service to be the most reliable of its sample, with it delivering an average speed of between 8.1Mbps and 8.7Mbps on an “up to 10Mbps” connection.
For the online gaming industry, broadband limitations effectively mean many operators and suppliers have thus far had to limit the size of their offerings to cater for the lowest common denominator when it comes to broadband speeds. Richard Hadida, executive chairman at Evolution Gaming, says: “Even though we could already produce really high-quality content, we couldn’t guarantee that the user would be able to see it, so therefore we generally limit ourselves to using 1Mbps as our highest transmission rate.”
The obvious follow-on question from those comments is if operators are holding back because their customers aren’t able to access super-fast broadband, what are they likely to offer once they’ve got potentially 50 times the speed to play with?
Sports betting on the run
In-running betting is already a major feature for online sportsbooks and it will become even more prominent as faster broadband will give punters access to better, and more diverse, live streams.
Mark Sweetman, director of engineering at Global Betting Exchange, parent company of Betdaq, says even though Betdaq doesn’t provide live streams, he thinks the company will benefit from an increase in the number and type of events being streamed online: “In general, people are not willing to bet in-running unless they can see what is going on.”
“At the moment the only events that are covered in-running by most of the exchanges are the events that are covered on TV,” he says. “I think the increase in broadband speeds will change customers’ ability to get much nearer to real time pictures and audio sources to go with their exchange trading activity. They would have much greater probability of being able to get pictures of some obscure fourth division game in some of the minor South American leagues.”
Marc Thomas, head of sportsbook at Sportingbet, says that it’s easy to access live streams “ whether legal or illegal “ of big sporting events, and adds that as a company that does provide live streaming, Sportingbet will benefit from punters being unable to get live sporting coverage elsewhere in the shape of increased betting turnover.
“On some sports, and tennis is a good example, and also some of the minority sports like the basketball that we stream, these streams aren’t widely available, so in some cases our websites are almost the exclusive places where you can get these streams from,” he says. “We don’t charge anyone to watch any of our streams. All we require the client to have is an account with Sportingbet, but the chances of somebody sitting down and watching a stream and then having a bet on it are obviously higher than if they are not watching the stream.”
Orbis’s Beattie sees the in-running sports betting industry evolving into something akin to financial trading. “I think our clients will benefit from being able to offer a more advanced in-running service where you have got more information about form, or players, or horses and so on thanks to increased broadband speed, because there is more capacity to be able to create this at the front end. That would follow quite closely things like the spread betting industry,” he says. “If you look at stock and share trading in the UK, five years ago they were all relatively basic lines, you could see the price of a company and you could go long and short on it and that was about it. Now if you look at something like IG Index or City Index, there has been a huge growth in the volume of trading information that they have on their clients.”
Moving into the living room
At Evolution, Hadida thinks the opportunities go beyond the ability to watch streaming on one’s computer. “It is unquestionably a big jump going from 5Mbps to 50Mbps because of the opportunities of moving properly into the living room. When IPTV [internet protocol television] delivery systems start pushing into the living room and there is the bandwidth there to support 8Mbps feeds and the set-top boxes can support Flash, then we at Evolution see a huge opportunity of moving into the living room.”
But he says we’re still some way from having the infrastructure to support this. “When internet can support people in a guaranteed way, rather than speeds ‘up to’, which is what everyone gets so upset about, at that point there can be big technological changes.
“There is no question that cable has a much greater capacity to deliver than ADSL. BT is going to start the 50Mbps connection; that is going to happen and that is the point where an internet connection will be able to outdeliver any other form of media delivery service in a point to point fashion.”
Casino games
While many casino games have quite a slow rate of play and are well supported by current broadband rates, there are still opportunities for improvement.
Nick Clark, lead Flash designer at Game Account, says making aesthetic improvements can be important. “As average broadband speeds have gone up we’ve added more graphics, the sound quality is better and you’ve got extra features. I think to some extent it has a real impact “ if you visit a poorly made website or one that looks very old you tend to trust it less. But if stuff looks sleek and modern you will subconsciously give it the benefit of the doubt, especially when you are depositing real money.”
Clark says a new generation of Flash games using 3D features that will include larger files and the use of video streaming within casino games is likely to grow in future. This would not have been possible before broadband speeds started to increase.
Orbis’s Beattie says slot machines are another area which may become more profitable for operators once broadband allows upgrades. “We would probably look at making them more interactive and including potentially more betting opportunities within the game, so rather than having just one bonus round as many slot games typically do, we might try and make it a bit richer, try to mirror the real world slot and have four or five bonus rounds,” he explains.
The bottom line
There’s no doubt broadband has been the technological catalyst for the stupendous growth the egaming industry has experienced in the past 10 years. With current UK penetration at 68% and rising, according to Ofcom’s Communications Market Report released in August, super-fast broadband is likely to lead to greater innovation and more growth within all areas of e-commerce, including online gaming. Interestingly, the Ofcom study also revealed that broadband and other communications were one area in which Brits were least likely to cut back during the recession. Although 47% of those surveyed said they would decrease spending on eating out and 41% on holidays, just 10% said they’d cut back on their broadband services.
And although operators remain somewhat cautious about the reliability of mobile broadband devices such as dongles, Ofcom’s report shows the number of people with mobile broadband access has jumped from 139,000 to 250,000 in the past year alone.
All this bodes well for the sector, but some operators are still faced with catering for a customer base which includes those that aren’t so technologically savvy.
Beattie draws a clear distinction between online-only and online and land-based operators. “You’ve got the typical online group who have no retail presence and as a result they can assume that all the users they have are technologically savvy,” he says. “But then you’ve got the big retail-based operators like Ladbrokes and Hills, who are obviously looking to transfer more and more of their existing retail base online, but as a result they need to cater for people who are quite possibly not going to have any technical insight and won’t have been using websites for anywhere near as long.”
There’s also the fact that many operators exist in markets outside the UK, some of which have a much lower level of broadband penetration. Sportingbet’s Thomas says much of their customer base is in emerging countries such as Bulgaria and Hungary, where broadband provision is far less developed.
“In a lot of cases we do struggle to actually provide a service in those areas. But if you are a customer on a 56K line and it is dropping down all the time I don’t think you would have an expectation really of being able to watch a live stream,” Thomas says. “But we do offer different sites in different countries. The sports we offer vary by country. So we internationalise ourselves from the bottom upwards, so that includes the content and the technology as well.”
It’s clear the advent of super-fast broadband in the UK and in other countries will create challenges as well as opportunities for operators, but one thing’s for sure “ no one can afford to get left behind in this business and as speed improves, so will the experience customers will expect.
This article first appeared in the October issue of eGaming Review.
Don’t miss out on egaming news: sign up for our free Snapshot email.