Monsters and mechs drive home networks

SOHO network vendors should target this growing market more aggressively

As I sat in my living room the other day while a friend who lives a thousand miles away blew me away on my X-Box, I realized just how cool online gaming is. Here I am, playing over my home network; my X-Box console plugged into my home router through an Ethernet connection.

With over 350,000 X-Box Live customers plugging into a broadband connection to game over the Internet, many using a home network to do so, what will be the impact of gaming on the home network market? 

As the world of online console gaming grows — where the action takes place in front of the living room TV rather than a bedroom or office PC — gamers will increasingly connect the console to the broadband modem via a wired or wireless router. Why? For one, the modem is typically at some distance from the game console. And two, most people won’t pay $40 per month for broadband access for just gaming — they’ll want to surf the Web, too.

In-Stat/MDR research confirms the link between gaming, broadband and home networks. A survey of U.S. consumers in August 2002 showed gamers are more likely to have broadband: 18.4% of gaming console owners vs. 13.8% of the general public. The same survey also showed 13.7% of gaming console owners had a home network vs. 9.8% of the general public. In fact, In-Stat/MDR’s March Digital Domicile 2003 report on home networking found the most prevalent form of non-PC networked entertainment devices through 2007 will be network-connected gaming consoles.

This is good news for SOHO network vendors. Linksys, D-Link, Netgear and Iogear already recognize the gamer as a key market niche, developing gaming Web pages and attending big gaming conferences. But with the recent push by game-console makers Microsoft and Sony to develop a bigger community of online gamers, these vendors and others would be wise to go a step further and develop products specifically targeted to console gaming. This means offering bridges designed to look like consumer electronic devices and working with retailers to develop co-marketing campaigns and more strategic in-store placement.

One vendor going after the gaming market is Microsoft. Last fall, the company launched its line of wireless and wired network hardware to roughly coincide with its launch of X-Box Live service. Microsoft will also likely release targeted add-ons, such as wireless LAN bridges to connect to the X-Box Ethernet port. However, the use of an Ethernet port on the current X-Box means it’s limited to using a wireless bridge, which requires its own power supply. In contrast, the Sony Playstation 2 uses a USB port (which has a built-in power supply), so you can connect via a wireless LAN adapter instead. More options, one less power brick.

Count on the next-generation X-Box and Playstation to include Ethernet and USB ports, and possibly even embedded 802.11 wireless, which will drive the market for 802.11 wireless (b/g and a) even more.