The game of latency: What CEOs and gamers have in common

Virtual, immersive, and always online: The gamescom event last week not only showcased trends redefining digital gaming but also highlighted why latency-sensitive applications in the cloud-edge continuum make gamers' hearts beat faster. How a powerful Internet drives digital game worlds and business models. And what CEOs and gaming fans have in common – an article by Ivo Ivanov, CEO at DE-CIX.

Whether as a mobile, online, or download game, video games are booming. According to Statista Market Insights, the industry will generate around 282 billion US dollars globally in 2024, with the trend continuing to rise. By 2027, the market is expected to be worth more than 363 billion US dollars, reflecting an annual increase of around 9 percent. Regardless of whether it’s simulation, action, or strategy – demand in Germany has also risen sharply in recent years; the country where the industry and community are now meeting again at gamescom. With around 320,000 trade visitors from 116 countries, the platform today gathers not only the German but also the international gaming industry.

Slow data packets limit experience and the fun factor

The global success story of the market is also a success story of the Internet. Worldwide, users prefer to buy games online, download top titles directly from the web, or compete against each other online in multiplayer mode. And increasingly in virtual reality (VR) as well. For example, gamers meet live at the digital ping-pong table in Eleven: Table Tennis VR for a virtual match. Especially in titles where multiple users play together, sometimes even in VR, the speed of their Internet connection becomes a decisive factor. Slow ping times, which were already dreaded at LAN parties in the early 2000s, still determine success or failure in multiplayer worlds today. The same applies to cloud gaming, where complete top titles are streamed to users as 4K streams from high-performance data centers. If data packets travel too slowly, they limit the experience and fun factor. Take Google Stadia as an example: In 2019, the cloud gaming service of the US hyperscaler was launched. The promise of playing blockbuster games in console quality without a console did not come true for Stadia. Google discontinued the service in 2023. Time has shown that gaming PCs and consoles still have a future.

Jumping, running, and dodging – when it comes to cloud games, every millisecond counts, making latency crucial. Latency is the time that elapses during data transmission. Unlike film or audio streams, cloud gaming services must send packets to users with minimal latency and receive and process them without delay. Biology sets the rules: our brain needs 20 milliseconds to process tactile impressions, decides what we see in 13 milliseconds, and takes less than 1 millisecond to process what we hear. If inputs and commands via keyboard, mouse, or gamepad do not have the expected and synchronized effect, this diminishes the sensory impression and ultimately makes games from the data center unplayable.

Game consoles in the cloud-edge continuum

High-speed bandwidth is the central ingredient for cloud gaming. Since many countries still can’t offer this across the board, providers like Microsoft or Sony are participating in the segment but continue to offer consoles. Consoles that pull extensive files from a local SSD at the application edge and load via the cloud as needed.

From industrial machinery to autonomous driving – a dual task distribution is the method of choice not only for gaming fans. To process data efficiently in the lowest possible latency and to optimally utilize available bandwidth, centralized and decentralized IT infrastructures merge in the so-called cloud-edge continuum. For instance, autonomous vehicles rely on onboard computers that must decide within a fraction of a second where obstacles, people, or open roads are located. In a system that integrates distributed computing and storage resources, information can be processed both directly in the vehicle at the network edge and centrally in the data center. Reducing throughput times also plays a key role in industry to automate and optimize production steps with artificial intelligence (AI).

Targeting a distributed, interconnected infrastructure

Whether on the home game console, the AI control unit in the factory, or the onboard computer in the smart car – solutions for the cloud-edge continuum will continue to be necessary. In a future where more and more devices need to transmit more and more information faster and faster, an infrastructure capable of integrating different systems and platforms is required. Practically speaking: whether it’s fiber optics, submarine cables, mobile networks, or satellite networks – anyone wanting to move data packets on such an overarching structure needs to bring large data lines and high-performance computers closer to where not only the enjoyment of gamers depends on a powerful Internet, but also life and work in general do. Digital business models require an infrastructure that minimizes latency and maximizes bandwidth. An infrastructure that can be connected on a neutral and open basis through interconnection services, such as those provided by DE-CIX, the world's leading Internet Exchange operator.

A look at the markets where DE-CIX is present shows how Internet Exchanges reduce latencies not only in gaming but overall. Take Dubai as an example: since its market entry in 2012, latency had been reduced from 200 to 3 milliseconds by 2022. The increase in speed has spurred regional entrepreneurship: the number of local data centers has tripled, and networks have increased eightfold in the same period. What is good for the IT industry in the Gulf is also necessary for the global digital economy: according to a current IDC analysis, around 14 percent of European companies expect that AI applications will impact cloud usage by changing connectivity and networking requirements. Is latency in gaming a primary concern for gamers and CEOs? When it comes to smart applications from the cloud, 22 percent of the companies surveyed by IDC have no doubt about it.