Ok, so I am totally in love with this report. It's written by Tony Greenberg and Alex Veytsel from a firm called RampRate that provides IT-related market and strategic analysis. I stole the subject line for this post from their report, and while I love cutsey titles more than life itself, the actual analysis in the report is even better than the title. They talk about the effect of the probable demise of net neutrality--the principle that your ISP and backbone net providers should not be allowed to discriminate between packets--on two industries, VOIP and MMOGs. I can't believe I didn't think of this myself, but net neutrality is all about jitter and latency and guess who cares a lot about these issues:
Companies like Blizzard Entertainment, Electronic Arts, Sony Online Entertainment, and countless others, have built a business on the fundamental assumption of relatively low latency bandwidth being available to large numbers of consumers. Furthermore, a large — even overwhelming — portion of the value of these offerings comes from their “network effects” — the tendency for the game to become more enjoyable and valuable as larger number of players joins the gaming network. With the permanent barriers that the removal of net neutrality will erect for these uses, the worst-case scenario includes three waves of change:
- One or more mainstream ISPs will introduce excessive lag that will effectively prohibit their users from participating in online games. The move will not be aimed at restricting usage per se, but rather to extract a fee from the game operator. However, as the Cablevision and YES dispute of 2002 showed us4, a fee disagreement between a cable company and content provider can effectively lock out the use of a popular service for over a year;
- As online gaming guilds, clans, and partners disappear into the rifts created in the Internet fabric, players that derive value from the community of the game rather than the playing experience per se will drop off. This vicious cycle of scarcity of users will lead to diminished enjoyment for existing users which will lead to still fewer users, until more games follow Asheron’s Call to oblivion;
- Hardcore users will write strongly worded messages to their ISPs, who will classify them as unreasonable malcontents using more than their share of bandwidth.
There is lots more. Honestly I just want to excerpt the entire report here, but obviously I won't. But go out and read this. It's really good.