Pivot to new business model

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PlayGiga Case Study

PlayGiga is a cloud-based gaming services company that aims to engage more ISPs by offering its cloud-based gaming platform to include high-quality games. These games can then be accessed by ISP subscribers on various smart devices at lower costs. The company has already engaged two ISPs, Telecom Italia and Turner Media Group, in order to make available their cloud-based gaming services to subscribers through these two partners. The company has offered the following benefits to its partners: richer media library content, better audience reach, and the general increase in subscribers. It also plans to expand their ISP partnership further but it first has to deal with several obstacles such as the gamer’s perception on game quality, infrastructure constraints, past performance of similar companies, and others.


PlayGiga is a technology company based in Spain that offers a recent type of service innovation called Games-as-a-Service. It has developed a proprietary technology that relies on cloud virtualization to optimize its platform and enable the real-time delivery of a premium gaming experience. PlayGiga’s platform can allow gamers to access high-quality games from multiple devices such as TVs, mobile, computers, and other smart devices at a lower cost and without the need to purchase expensive gaming consoles.
PlayGiga also aims to make high-end gaming easily available at an affordable price for everyone and not just for gaming hobbyist. Currently, only those who are heavily into complex games were the ones setting aside huge budgets to be able to buy costly gaming devices, software, and game packages. Furthermore, the high cost of purchasing new releases makes it all the more expensive to continue pursuing the hobby.
PlayGiga’s platform is different from other businesses who sell their game streaming solutions directly to gamers. The company is currently the only one that provides a cloud-based gaming platform directly to businesses such as telecommunication companies, internet service providers, and media firms who are already providing video and music offerings to their subscribers. Recently, it was able to secure a deal with Telecom Italia and Turner International which will enable the availability of PlayGiga’s game streaming platform to both companies’ subscribers.
On top of the platform, PlayGiga will also offer to these partner companies their expansive library of 140+ games that were licensed from more than 40 popular game publishers. The company hopes that their partner companies can gain more customers once their current media libraries are enhanced with cloud-based game streaming features. Users can just pay a set subscription fee to gain unlimited access to game streaming features. With this lower cost option, the ISPs can reach more customers who are not regular gamers such as families and lower income groups. Furthermore, even if the cost is reduced, high-quality game graphics can still be provided as cloud-based services like this are not resource intensive. Games can also load faster with lesser setup needed.
With this kind of business model, PlayGiga and its partner companies can provide a streaming service for games just like what Netflix did for movies and Spotify for music. The company believes that the future of games includes making games available for streaming on any connected device.


As there was no direct mention in any article of how PlayGiga was able to sell their services to their current ISP partners, we can assume that they have used the benefits and general selling strategies mentioned above to engage these companies. With regard to the deal amount of the partnerships, there were no available figures found after searching extensively in various reports, articles, and databases. There was only a mention of the following revenue-sharing model where revenues can just be divided among all the major parties involved in the partnership such as PlayGiga, third-party telecom or ISP companies, and the games’ license owners who can get 20% of the earnings.
PlayGiga was able to partner with Telecom Italia, Italy’s biggest telecommunications' provider. The company has developed TIMGames which has been added to the current roster of media content such as TV shows and music that are already being offered by the telecom company. Telecom Italia’s subscribers will be able to access more than 100 high-quality game titles as a result of this addition. The current subscription rate is at €4.99 per month.
PlayGiga has also partnered with the Turner Media Group, one of the world’s biggest private broadcasters to develop GLOUD, a cloud-based game streaming service that can be accessed from various devices such as MACs or PCs for a set monthly fee. There will be 45 games in the library that will be available to the subscribers without needing to pay for any additional storage or single games. GLOUD is initially available in Argentina and Chile from Turner’s Argentina branch as the company starts the expansion of its digital media services across Latin America. The monthly subscription cost is 222.90 in Argentinian currency and 7,735 in Chilean currency.


Currently, PlayGiga only has two ISPs as its current partners. There is no mention in any reports or articles on specific reasons why PlayGiga was able to engage only two telecom partners even after five years of operation. Given this, we can just infer on the reason based on certain parallelism happening in the cloud-gaming services arena.
PlayGiga hopes to engage more companies in the future as they believe that the future of gaming involves paid subscription streaming services.
However, the company first has to overcome several barriers that are currently keeping it from expanding further. Some of the challenges encountered by cloud-gaming companies were shown in an article that was released three years ago. The content of the article is still relevant as PlayGiga stated that they will keep on taking progressive actions to overcome the barriers stated in the article.
In order to expand further, cloud gaming companies like PlayGiga have to compete first with bigger firms like Sony or Gamefly who usually end up buying lesser players. PlayGiga is already aware of this reality and they have mentioned that their approach can help them expand further. One approach is their own go-to-market strategy where they have started the development of pilot initiatives in Europe, Latin America, and Asia. In these programs, PlayGiga hopes to partner with various companies in order to lower the cloud-gaming costs and acquire their current subscribers.
Another obstacle encountered by companies who are planning to offer cloud-based gaming services are infrastructure limitations. Electronic Arts is also planning to offer a cloud-based gaming service but has encountered some infrastructure concerns along the way. The company is hoping that these limitations can be addressed by upcoming new technologies in order for their games to be made more affordable for everyone. For PlayGiga, their own cloud-based game streaming services are already available in partnership with two ISPs. However, since it is currently one of the few companies offering the service commercially, there might be an underlying concern that the service may not fully work due to perceived infrastructure limitations.
We can also refer to an article that was released three years ago to explain the challenges of cloud-based gaming. The contents are still relevant since we can draw some assumptions from the article on why cloud-based gaming services are slow to expand.
In the article, it was mentioned that OnLive, one of the first companies to offer cloud-based gaming services has already stopped offering the service. Challenges encountered by the company include low gamer adoption due to low-resolution games, large bandwidth requirements, and slow loading times. Investors of OnLive lost millions as a result of the company’s bankruptcy and eventual shutdown. This has made people wonder if cloud-gaming is still the way to go. Although PlayGiga is offering a more advanced cloud-based platform to address these concerns, there might still be a stigma attached to this kind of service given the issues with previous cloud-gaming companies. Companies might still be making sure that the service is stable and will be widely adopted by everyone before partnering with firms such as PlayGiga. This might have explained why they only have two partners even after five years of operations.


PlayGiga’s strategy to sell their cloud-gaming services to ISPs includes highlighting its improved cloud-based gaming platform containing high-quality games that can be accessed on multiple smart devices at lower costs. The company has already partnered with two ISPs, Telecom Italia and Turner Media Group, to be able to provide its cloud-based gaming service to subscribers through these two partners. The company has offered the following benefits to its partners: richer media library content, better audience reach, and a general increase in subscribers. The firm plans to partner with other ISPs in the future but it first has to overcome several barriers such as gamer’s perception of the quality of the games, infrastructure limitations, past performance of similar companies, and others.
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B2B2C Product Sales Barriers


A thorough research was done, and with the requirements of your request, we have separated the results and information for an easier read into four different groups.


The video gaming market in Europe is a growing one offering lucrative possibilities, since it was valued at $18 billion in 2017 and is expected to hit $19.5 billion by 2020. With 37.2 million gamers, the German market has hit $4.4 billion in revenue, making it the largest European market. On the other hand, Germany takes the 17th place when it comes to mobile broadband subscriptions, with 66 per 100 people, with Finland, Sweden and Denmark taking the first three places.

Deutsche Telekom, Swisscom, Elisa, and TeliaSonera are all examples of providers based in Europe who have successfully launched different "cloud service marketplaces". G-Core Labs, a company providing high-quality internet speeds and different IT-related infrastructures, has already started working with Playkey, a cloud-based service, that has a part of their servers placed in Germany. The company was given $1.5 million in funding from Darz, and is planning to release a new platform in 2018.


One of the main barriers to selling B2B2C product is the strain that the communication between the ISP and the clients would put on the hardware, since the ISP would have to offer the best data transfer speeds for the service to run effortlessly. The main strategies that are being employed to solve this problem are data compression and adaptive transmission. Data compression is based on different algorithms that reduce the traffic on the network, and the three main strategies being used are : video compression, graphics compression and hybrid compression, with the first one being the most used one. Since even with data compression, the network can have problems like bandwidth and jitter, which are unpredictable and cause the transmission to fluctuate, adaptive transmission as a strategy is being utilized to deal with those problems.

The next barrier comes from the fact that the telecommunication operators can block, limit or throttle the access to games. Two examples confirm this : Rogers, the Canadian telecommunication company, admitting the fact that they're suppressing the online access to games, and EU Telecom blocking VoIP services, with Skype as an example. With the raising concerns about net neutrality issues, European providers can decide to limit the access to the highest quality data traffic speeds, which is essential to cloud-gaming, to those who pay the most, while leaving behind the many users who don't have the money or want to pay the price.

Although there was an agreement in 2015 on net neutrality rules in EU, there are still alarming loopholes in the agreement. One of those is the regulation called "zero rating", more important for mobile games, since unlimited data on mobile phones still aren't a norm, which gives the operators permission to decide to omit "certain sites or applications against data limits". For example, in Germany, you need to set aside €199,95/month for unlimited data, with the more affordable option being €26.49, that gives access to only 6GB of mobile data.

On the legal side, co-production agreements in Europe are being hindered by different types of IP rights, including UGC's management, making them closed to transmedia.

A number of cloud companies, that go by the name of Cloud Infrastructure Services Providers in Europe (CISPE) stated that they are going to "keep European data inside Europe", published in the Trade in Services Agreement (TISA). This "data localization" gives them the permission to store and process data within EU or EEA, by asking those who sign up for the service to mention their location, and will be given a "trust mark". The main problem with the proposal are the privacy issues, and more importantly, the power of internet providers to limit the transfer of information.

The costs of the integration of cloud services were until recently too high for service providers, caused by the insufficient self-service following the sales, along with being very time-consuming.


The first challenge the ISPs will face are the evaluations of performance that should be built up. They should include:
1. Quality of Service (QoS) — measurements of energy consumption, network and alike
2. Quality of Experience (QoE) — measurements of the quality of the experience perceived by gamers.
The platform that evaluates those metrics and their interplay can prove difficult to build.

The second challenge is built upon the first one, since the data can be used to optimize the procedures regarding cloud-gaming. Some techniques that could be used are :
1. Better distribution of the architecture and resources
2. Adaptive transmissions mentioned earlier as well as optimal coding

The next challenge they will face is the problem of dealing with different genres. One of the categorizations is based on the viewpoint and theme. Viewpoint accounts for the way the gamer observes the surroundings, while the theme determines the interaction between the gamer and the content of the game. For example, first-person shooters, requiring stable and fast internet connection with usually have great graphics, and demand more resources than turn-based RPGs.

A potential challenge with cloud-gaming was found in the privacy of the gamer, regarding the security of data and location.

Also, the ISPs would have to provide high-quality connection when a player issues commands or decides to video stream. The main problem with this is the latency which the player will face. The ISPs would have to identify the best server locations by measuring the latency in Europe, as well as investigate the interaction between the number of servers and latency. This study shows that the technological advancements will have a big impact in reducing the end-to-end latency. Also, a big problem with European internet providers is the speed of the data transfer that they are offering. While Asian countries like South Korea already provide 1Gb connections, European providers are still trying to reach 100Mb. The number of ISPs in Europe aggravates "the commoditization pressures" and creates complexity for potential users of the service.

The challenges of ISPs in the transmedia field face include :
1. The protection of users' data
2. Failures, some of which previously mentioned, of telecommunication structures
3. Lack of experimental structures


If we look at Germany, the gaming capital of Europe, we find that out of the 90% of people that use the internet, more than 50% play some type of games "at least once a month". A quarter of them don't prefer just one gaming device, opening the doors to cloud-gaming, that provides them the satisfaction of playing same games from different devices, confirmed by the fact that the digital distribution is projected to hit 20% of "global gaming revenue" by 2019.

One of the main benefits of cloud-gaming are the less-demanding requirements needed to play high-end games and the option to remove architectural limitations. This allows them to play from inferior devices, saving them money since the need to buy new equipment is severely reduced, and get access to more games, especially since the appetite for "engaging, high-definition visual experiences" is growing. Also, there's a potential for cloud-gaming to reduce the power needed to run those games and the costs of the production of games, since the developers wouldn't need to develop the games for different platforms.

With the high-quality connection being a must in cloud-based services, the fact that the telecommunication companies are introducing 5G connection represents a major opportunity for the development and integration of cloud-gaming.

Since the cloud services today have become more available and flexible, an opportunity for service providers has arisen to "efficiently and cost-effectively" jump onboard with the cloud services.

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