Bandwidth Management Questions, Failed Efforts Bring Future of Online Gaming Into Question

The FCC vote last Friday ordering Comcast Corp.(CMCSA) to stop throttling P2P traffic raises questions as to gaming’s promised evolution beyond standalone entertainment to online, multiplayer, bandwidth-burning gaming.

Ironically, just days before the latest FCC meeting on Comcast’s traffic-throttling activities, during which the cableco was ordered to come up with new bandwidth management plans by year-end, the company launched a free Nintendo Co. Ltd.(TYO:7974) Wii game system giveaway for new triple-play customers.

Around the same time, word had spread that gaming-optimized network provider GameRail closed shop. And many still are waiting for a domestic operator to roll out Microsoft Corp.’s (MSFT) much-heralded IPTV for Xbox 360.

Collectively, these developments — and the fact that most game consoles now support both standalone and interactive play — raise questions as to when, and how much, gaming will move onto public networks, and how network operators’ bandwidth management efforts will fit into all this.

“What better way for Comcast to get over the whole BitTorrent debacle than by offering new subscribers a Wii!” said Jeff Heynen, directing analyst for IPTV and Next Gen OSS/BSS at Infonetics Research, with strong sarcasm. “Hey, who needs to worry about your traffic being blocked when you’re too busy swinging at imaginary tennis balls and things?”

His comments reference the larger issue of ISP network bandwidth management. Some operators, including AT&T Inc. (ATT) are looking to set firm throughput speed minimums and maximums for the Internet services. Others are considering creating pay tiers or extra fees for power users who they claim are devouring a disproportionate amount of local bandwidth.

That portends to create problems given that gaming is arguably the most delay-intolerant application. Experts such as Heynen have long and strongly recommended online gamers use symmetric Internet for optimal performance.

Yet despite his cynicism regarding Comcast’s gaming promotion, Heynen believes the gaming giveaway has value from a marketing perspective.

IPTV for Xbox 360 MIA?

“The move accomplishes a couple of things such as trumping Verizon’s first-quarter offer of a new TV to all new FiOS subscribers,” said Heynen. “It also defuses AT&T’s planned announcement of rolling out the Xbox 360 as a full-featured [set-top box],” he said in reference to Microsoft’s IPTV for Xbox 360.

Microsoft execs grabbed headlines more than 18 months ago when they announced IPTV for Xbox 360 in a kickoff presentation at the Consumer Electronics Show (CES). The product-in-progress was hailed as the (or an additional) STB in the home, and a means for the software giant to grab real estate in the evolving broadband home.

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