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

At this year’s CES, Microsoft’s Bill Gates claimed in his presentation that BT was deploying the offering. But no North American service providers — not even Microsoft’s largest U.S. IPTV software customer, AT&T — have signed up to use the box.

But whatever the in-home device employed, getting customers to sign on to any kind of new services or products during a down economy can be a hard sell.

“Whether it’s Wiis, iPods, TVs, whatever, tough economic times make consumers stay where they are, be it with their homes, investments, jobs and service providers,” he continued. “Take a look at FiOS’ drop in subscriber additions in the second quarter, and you’ll see that in full effect. There is never a more saturated market than one undergoing a recession.”

Though Verizon Communications Inc. (VZ), Comcast and AT&T won’t admit it, he added, the economic environment is dampening the effect of their messaging and reducing their ability to add new subscribers. That’s probably why they are using promos and giveaways, like Comcast’s Wii deal, which are restricted to new customers.

It’s unclear whether it was the economy, an idea that was before its time, or another reason leading to the derailment of a high-profile online gaming effort dubbed GameRail.

GameRail Derailed

GameRail was created in 2007 to provide a network optimized for online gaming. The effort used gigabit Ethernet transmission links supplied by XO Communications between key network hubs, which housed switching gear from Foundry Networks Inc.. The hubs also included game servers that consumers could access to play via their ISP access connections to GameRail.

The company said its direct-connect approach “connects game players to their favorite game hosts and vice versa, thereby eliminating game play-degrading, high-latency hops on the Internet.”

But, ultimately, GameRail failed. This may be a signal that online multiplayer gaming has a ways to go to reach critical mass, or at least live up to the hype produced due to high-profile additions of online abilities on gaming consoles.

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