The title of this post is "Will Net Neutrality Kill Cloud Gaming?" -- and no, that's not the wrong way around. While a handful of game developers just
advised the FCC on the importance of net neutrality for the future of online gaming, and to an extent correctly
so, there are cause-and-effects in play that also pose significant threats.
Let's get some definitions out of the way. First off, for the purposes of this post, "cloud gaming"
refers to games that are rendered in the cloud (i.e. on servers). In essence, this is the promise of services like OnLive, a gaming offering that portends high-quality gaming on the simplest of
devices by centralizing the heavy lifting in the cloud. It's not there yet, but the intent
has many gamers' hopes up for a day in the future when they can leave the hardware arms race behind.
"Net neutrality" is the idea of nondiscrimination for network traffic. In essence,
this means that high data streams like BitTorrent or online video can't be throttled by ISPs. It also means ISPs can't charge companies for preferential treatment (like a gaming service like
Xbox LIVE getting preferential bandwidth when the network gets congested). Game developers are getting behind the initiative because they want to prevent ISPs from blackmailing them into paying
for preferred streams, or throttling traffic, which will deliver sub-par experiences to customers. And while this scenario hasn't occurred so far, the whole point of ratifying network neutrality rules
is to prevent it. But one crucial point is overlooked: network neutrality has nothing to do with billing.
See, the ISPs and telecoms are looking at network neutrality, and their dream of
a B2B revenue stream is being crushed. At the same time, cable subscriptions are being threatened by broadband video. So these companies are looking at their current business model, and
trying to figure out how to grow profits despite decreasing revenue streams. The answer many are considering quite carefully is something called "consumption-based billing." In essence,
pay for what you use. And this model is a death knell for cloud gaming.
The issue comes down to speed versus volume. An absence of net neutrality threatens the promise of high
speed, low-latency gaming. Consumption-based billing either dramatically increases costs to consumers, or decreases margins to game service providers (depending on who is footing the bill).
A net-neutral world with consumption-based billing will mean cheerio for consoles and high-end PC games that have much of the content on disc. But for services rendering frames centrally
and piping that down to computers as an HD stream -- well that's going to be a pretty penny.
Both network neutrality and consumption-based billing are a far way off for terrestrial ISP
networks, but they present a very interesting scenario to ponder. But as digital distribution increases in share of sales, and as cloud gaming starts taking its baby steps, these issues are
going to dramatically impact the future direction of a number of gaming services. Let's watch and see how things play out.
[So, my personal opinion is: "pro" for both network neutrality
rules and fairly priced consumption-based billing.]