Game Over for Net Neutrality: Esports in a Deregulated Internet

16 January 2018 The Esports Observer Publication
Author(s): Jarren N. Ginsburg Ryan J. Lowry

Riot Games may well be right: A new era has begun in the world of esports.

Recently, the FCC made the controversial decision to repeal the Net Neutrality regulations from 2015. Net Neutrality is the principle that all information and data on the internet be treated equally. In a world with Net Neutrality regulations, Internet Service Providers (ISPs) are not allowed to speed up or slow down internet speeds based on the content, nor are they allowed to block any particular content, applications, or websites, for better or worse. In a world without Net Neutrality regulations, ISPs will be free to operate and administer the internet as they see fit and charge accordingly.

The esports industry, which relies heavily on the internet for streaming games and multiplayer competitions, will undoubtedly be affected by the repeal of Net Neutrality regulations. Even though the esports industry first emerged in an era without any Net Neutrality regulations, the industry as a whole was very different then. Games now require much more data, especially with the advent of 4K and HDR visuals, and esports as a whole is much more ubiquitous in society. Here, we examine the potential impact of the deregulation of the internet on the esports industry and what the industry may do in response.

The Cost/Speed of Gaming

While no one knows exactly what will happen in a world without Net Neutrality, speculation suggests that ISPs will use the end of Net Neutrality to toggle bandwidth and, perhaps, promote high-speed access packages to those who are willing to pay for it. In 2014, online gaming was a top 5 user of internet bandwidth. The amount of bandwidth used in esports will likely grow due to both esports’ growing popularity and the increasing amount of information needed to play games online. Given the amount of internet bandwidth they use, online gamers and esports will likely be among the first groups to feel the effects of the changes in Net Neutrality, both bad and good.

As one of the top uses of internet bandwidth, gamers may worry about how ISPs will handle data throttling and prioritization under the new rules. In this new world, gamers could be asked to pay more per month, on top of basic internet, just to be able to access the world of esports and online gaming. For example, on top of a flat fee for internet services, gamers could now face an additional fee, exclusive of subscription fees, in order to access networks like Xbox Live, PlayStation Network, or Steam. In doing this, ISPs would be regulating how much bandwidth is available to gamers and prioritizing the bandwidth of those who are willing to pay more.

Another potential concern is that while ISPs may not charge the user for access to networks like Microsoft’s Xbox Live, they may charge Microsoft for how much bandwidth the network uses. If this is the case, these charges may be passed on to the consumer. Conversely, if a network like Xbox Live does not want to pay or front these extra costs, the service could suffer—leaving certain gamers without their preferred avenue for online gaming and the market with less competition.

The absence of Net Neutrality regulations could bring certain benefits to the gaming community, however. Because ISP’s will be able to toggle bandwidth to slow it down, they will also be able to create “super speed highways.” Right now, everyone uses the same internet, but the end of Net Neutrality could open the door for tiered access, most likely for a price. This could lead to a better gaming experience overall for those in the esports and online community who may be willing to pay.

Primetime esports events could pay ISPs for premium bandwidth usage and that could enhance the gaming experience. Furthermore, every esport athlete could see an increase in game speed as ISPs toggle back bandwidth on other internet users and enhance it for gaming. Essentially, the ability to throttle speeds could enhance gameplay by ensuring that certain end users are afforded the fastest speeds when they need them as opposed to giving all users the fastest speeds all the time, even when they are just chatting with others during a game loading screen.

Streaming Esports

As in most sports, the three primary components of esports are: the game, the players, and the fans. While it is true that a great game and skilled players are necessary, the fans ultimately determine the viability of a game’s popularity as an esport. The rise in popularity of esports has coincided with the availability of streaming platforms such as Twitch, Hitbox, and Dailymotion Games, which have enabled major tournaments to reach millions of dedicated fans across the globe. Esports streaming has become a big business, and even traditional media conglomerates such as Disney and Turner Broadcasting have made major investments into esports streaming.

The increasing popularity of esports is often linked to the ability of content creators to provide free content to millions of viewers. With the repeal of the Net Neutrality regulations, however, that ability could be fundamentally hindered for the foreseeable future. An ISP’s ability to charge a premium for access to certain content or platforms would necessarily change the way in which esports has operated. More so than traditional sports, the esports community has determined which games will be popular esports titles. Without Net Neutrality, this power would shift to the ISPs and the content providers and platforms willing to pay the premium (without passing it to their customers). This shift could drive traffic to content and platforms that might not be the esports community’s first choice but for the fact that there is no cost or premium to access it. Any attempts to influence the natural order of the esports industry would likely be met with resistance from the gaming community, however.

Although premium-priced “super speed highways” could lead to an enhanced viewing and gaming experience, it could have devastating effects on viewership and participation if the costs for that experience are dumped on the viewers and participants themselves. If having to choose between paying the premium or not watching at all, many could opt not to watch or participate. Cable-cord cutting millennials make up a significant percentage of the esports community and are notoriously willing to cut or avoid such expenses. Given the potential impact, the implementation of premium access charges should merit careful consideration.

The Development and Availability of Future Games

While the end of Net Neutrality may have its most visible effects on the end users, its potential reach also extends to game developers, which will likely need to recalibrate employment, growth strategies, product consumption, and consumer testing.

The esports and game development industry tends to function differently from more traditional businesses. This is especially true as it relates to employee collaboration and exchange of information. More traditional businesses —like law firms—often have a central location (or locations) where employees are expected to work together in an office setting. This is not the case for many video game developers, who can often work from home and “telecommute,” sometimes never meeting other developers in person before finishing a project. As a result, developers may personally pay for their own internet access, and if limited by their personal incomes, increased access costs associated with the end of Net Neutrality could create production bottlenecks and make virtual meetings more challenging. This may force large developers with medium to large development teams to utilize a central physical location. By having all employees or contractors in the same place and using the same connection, the developer could experience some productivity benefits, such as improved ability to monitor individual performance and more efficient problem solving through face-to-face contact between developers.

With the end of Net Neutrality, smaller developers could face additional costs as their development powers and market reach grow. For instance, as their graphics improve with subsequent updates or follow-up titles, their data consumption and need for higher internet speeds will follow. Therefore, these developers may need to expand their access and internet speeds by utilizing one of the aforementioned “super speed highways.” While this could come at a cost, it could positively force these developers into traditional strategic growth plans: as the company’s demand exceeds its factory’s capacity, the company must get a bigger factory. So, consumers and developers alike could benefit from improved technical capabilities as the company grows, rather than remaining stagnant.

Developers also may be forced to become more creative in order to meet a changing demand. As certain gamers may be less willing to purchase packages with high enough bandwidth for consistent online gaming, they may, in turn, seek out games with offline modes. This could force developers to rethink their products and offer such capabilities. In this context, players could play offline to hone their skills and save their limited online play for certain tournaments or events. This could then change the way that in-game strategies develop. With players not streaming or recording their strategies, this could lead to exciting televised gameplay where even the experts will have a harder time anticipating a certain move or strategy. Depending on how certain tournaments and leagues rank or select players, underdogs, and relative unknowns could make a name for themselves as they shock more established professionals all the way to a championship. This could create thrilling action and spontaneity, which are often critical to a game and a league’s success.

Finally, the end of Net Neutrality will likely affect developers’ relationships with end users. Many developers rely on “beta testers”—select real-world test subjects—to play an early, unfinished version of their game as a means to find errors and give overall feedback. If users experience online play differently depending on their internet speeds, this could degrade the reliability of the data and feedback obtained. However, in a world of stratified access, developers could target their core users—the “die-hard” fans—who crave access to the “super speed highways” in order to be the best. These beta testers are more likely to play the game when it is finished and play it the most. Therefore, the developers will be able to use targeted beta-testing to address concerns that are relevant and important to the most serious gamers.

Ultimately, competitive and casual gamers alike are going to find a way to get their fix. The question is, in the absence of Net Neutrality regulations, who is going to provide them with that fix and at what cost? While the deregulation of the internet is certain to impact the status quo of esports, it is not likely to deter the rapid growth of this exploding industry.

This article was originally published by The Esports Observer on January 15, 2018. Click here to view the original publication.

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