The Verizon Fios bundling initiative is starting to look like an attractive proposition, and now it has added Google’s cloud gaming offer for an additional twist.
Launched in January, the mix and match offer looked like a sound attempt to boost broadband sales through bundling. There were several interesting elements, including the ability to pick-up and drop certain elements on a month-by-month basis, though adding a gaming segment will make the offer attractive to a small niche of US society.
The mix and match proposition is not a silver bullet for profitability, but more an incremental gain approach to building a comprehensive bundling offer. Each additional element will make the offer attractive to an additional sliver of the population. It’s a gradual and sustainable approach to take the company forward.
As part of the partnership with Google, new customers will receive a free Stadia Controller and Google Chromecast Ultra, as well as a Stadia Pro subscription for first 3 months, which will then cost $9.99 a month. Bundling in with a Fios Gigabit broadband service, Verizon is promising download and upload speeds up to 940 and 880 Mbps respectively, it could be attractive to the growing community of gaming enthusiasts.
According to analyst firm Newzoo, North America is second-largest region for gaming in terms of revenues, accounting for $39.6 billion, while the US is forecast to overtake China as the world’s number one individual market. And while mobile gaming is the largest segment currently, cloud gaming platforms are forecast for a surge in growth over the next few years.
The cloud gaming trends are driven by two elements. Firstly, the availability of platforms and the aggressive nature the providers, such as Google and Microsoft, expanding services. Secondly, the rollout of full-fibre networks and imminent adoption of 5G connectivity will ensure providers are able to deliver the promised experience to consumers.
The days of pure play telcos are drawing to a close very quickly. The attitudes commoditising data and the continuing decline in data prices will erode profitability of connectivity, meaning additional revenues will have to be sought elsewhere to increase (or maintain) ARPU. Another element to consider is the attractiveness of offers.
Numerous telcos are attempting to create convergence connectivity products as well as building on additional added value services such as security, gaming or entertainment options. Consumers are seemingly open to bundled contracts, meaning pure play telcos might become less competitive in comparison to some.
What Verizon is currently building might not revolutionise the financial spreadsheets overnight, but it is slowly developing a very attractive bundling service. Orange has validated the convergence business model in Europe, though this took years to create, and it now seems Verizon is getting a run on the market in the US.