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TeliaSonera's Vlad Ihora on the growth of online gaming and the inevitability of digital distribution

Online gaming continues to grow in popularity, both for persistent world MMOs such as World of Warcraft and console or PC competitive games like Call of Duty or FIFA.

Here, TeliaSonera's head of gaming, Vlad Ihora, explains how the attitudes of ISPs are changing towards gamers, and why widescale digital distribution of full games is just a matter of time.

GamesIndustry.biz How has the internet landscape changed in Europe in the past 12-18 months, from a usage perspective?
Vlad Ihora

Overall - globally - the internet has grown by over 50 per cent, 52 per cent to be exact. But Europe's been taking the lead, from what used to be the US and Asia, purely because of the penetration and increase of speeds in broadband services. To a certain extent the availability has also changed, so that it's not so much of a luxury item, but an everyday service, so all that's helped tremendously.

You have things like triple- and quadruple-play services brought in by ISPs where you're told the internet is free... well obviously it's not free, it's part of the overall package, but it's being pushed as a baseline product on which you build everything else.

It's been a real benefit to the gaming industry because even though we know lots of games can be played on connections that aren't necessarily top ADSL levels, the better the end-user connection is, the better the quality becomes.

In terms of growth, looking into the statistics we had as estimates, compared to what we now see in terms of our usage, even under the current economic conditions the growth has been a lot higher than expected.

It's going to continue as well. Our view of Europe is that not just Northern Europe is growing, but also a lot of Southern and Eastern Europe is growing. The availability of broadband services in Eastern Europe is now starting to make an impact in terms of the geographical split of traffic showing up, and overall it's been quite visible that instead of lots of European customers going onto US traffic, it's the other way around, or in the middle. You have Europe getting so much traffic from other regions that it's now a bit more of a fair game in terms of how the loads and splits are being made.

GamesIndustry.biz There's a sense that the developing markets, such as Russia - the infrastructure is definitely there now, and that's something that's changing rapidly, even though there's still lots of physical work to do.
Vlad Ihora

It's also a bit of a double-edged sword, because when you go into areas which haven't had much of an infrastructure before, while you have the effort to put in the initial investment to bring it it, what you actually bring in is not old technology - you bring top of the range new technology, which allows you to grow so much faster than more developed areas which might still use copper laid in the early 1900s. There's quite a big difference between that and fibre optics.

But then there's also the question for the billing and payments systems - for any telecoms or broadband company that's actually quite straightforward if you have a large area to cover, it's still easy enough. But if you have any applications on top of this, it becomes an interesting question - how does online gaming work in areas where credit and debit cards are not so readily available?

Then you have to come up with some interesting ideas, such as co-billing with the telco provider, or scratch cards, or loading up an online account with any other card to maintain security - it all triggers new ideas which can be brought into other areas to make things easier.

It's a jumping board for new business models, but I'd say overall that we can't see it as a significant market for online games. It's more like those companies that are there are stepping into the resources that are even by today's standards cheaper in terms of development. That's still an opportunity, for studios to establish themselves in these areas and then export the ideas outside to areas they can actually sell the games themselves.

We've had quite a lot of opportunities with Russian, and more recently Polish, companies who have done well in their home market and are now trying to find ways to break out internationally. It's nice, it's like fresh blood, fresh ideas coming in, and a new attitude towards the system compared to the more established models that have been going on for a long time.

These new guys are sometimes far hungrier to get out and show what they have, and get the feedback from the market.

GamesIndustry.biz Digital distribution is a big buzzword right now, and it's now pretty established for things like downloadable content or patches - but it's still not the primary way of picking up complete games yet. However, some sections of the press delight in talking about the internet grinding to a halt because of too much information flying around, so could we all get games digitally now? Or would there need to be more capacity?
Vlad Ihora

From an ISP perspective you'd probably have a different answer than from our side, because we sit on the layer which is forming the core of internet connectivity. From our side you could flick a switch and have it available overnight, it's not an issue.

The internet isn't going to fall apart, that's not at all the case. It's more about the infrastructure on the end-user side - how do you make sure that the license of the game is protected? How do you make sure that a big download can be fragmented, and be certain that all the packets have arrived properly? That's the only issue, but it's more an issue for the publisher and the provider of the digital distribution system than for the network itself. The network can take it, there's so much more bandwidth available.

It's a simple rule - the internet is formed by networks, computers, coming together. The more computers come together, the bigger the pool is. There's also the question of guaranteeing quality - it's down to making sure that within your network itself you can control it properly, that you link it with the others and apply the same protocols in order to provide a transparent service. This is being done today by private peering, for example.

It's not a question of the internet shutting down, it's not like the gas supply at Christmas - it's more down to making sure the customer expectations are set correctly, and the promotion is done to encourage these sort of services.

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