Key Cloud Gaming Concepts with Blacknut’s Olivier Avaro

Cloud Gaming Primer - key concepts - NETINT Technologies

Recently, our Mark Donnigan interviewed Olivier Avaro, the CEO of Blacknut, the world’s leading pure-player cloud gaming service. As an emerging market, cloud gaming is new to many, and the interview covered a comprehensive range of topics with clarity and conciseness. For this reason, we decided to summarize some of the key concepts and include them in this post. If you’d like to listen to the complete interview, and we recommend you do, click here. Otherwise, you can read a lightly edited summary of the key topics below.

For perspective, Avaro founded Blacknut in 2016, and the company offers consumers over seven hundred premium titles for a monthly subscription, with service available across Europe, Asia, and North America on a wide range of devices, including mobiles, set-top-boxes, and Smart TVs. Blacknut also distributes through ISPs, device manufacturers, OTT services, and media companies, offering a turnkey service, including infrastructure and games that allow businesses to instantly offer their own cloud gaming service.

Cloud Gaming Primer - the key points covered in the interview

The basic cloud gaming architecture is simple.

The architecture of cloud gaming is simple. You take games, you put them on the server in the cloud, and you virtualize and stream it in the form of a video stream so that you don’t have to download the game on the client side. When you interact with the game, you send a command back to the server, and you interact with the game this way.

Of course, bandwidth needs to be sufficient, let’s say six megabits per second. Latency needs to be good, let’s say less than 80 milliseconds. And, of course, you need to have the right infrastructure on the server that can run games. This means a mixture of CPU, GPU, storage, and all this needs to work well.

But cost control is key.

We passed the technology inflection point where actually the service becomes to be feasible. Technically feasible, the experience is good enough for the mass market. Now, the issue is on the unique economics and how much it costs to stream and deliver games in an efficient manner so that it is affordable for the mass market.

Public Cloud is great for proof of concept.

We started deploying the service based on the public cloud because this allowed us to test the different metrics, how people were playing the service, and how many hours. And this was actually very fast to launch and to scale…That’s great, but they are quite expensive.

But you need your own infrastructure to become profitable.

So, to optimize the economics, we built what we call the hybrid cloud for cloud gaming, which is a combination of both the public cloud and private cloud. So, we must install our own servers based on GPUs, CPUs, and so on so we can improve the overall performance and the unique economics of the system.

Cost per concurrent user (CCU) is the key metric.

The ultimate measure is the cost per concurrent user that you can get on a specific bill of material. If you have a CPU plus GPU architecture, the game is going to slice the GPU in different pieces in a more dynamic manner and in a more appropriate manner so that you can run different games and as many games as possible.

GPU-only architectures deliver high CCUs, which decreases profitability.

There are some limits on how much you can slice the GPU and still be efficient and so there are some limits in this architecture because it all relies on the GPU. We are investigating different architectures using a VPU, like NETINT’s, that will offload the GPU of the task of encoding and streaming the video so that we can augment the density.

VPU-augmented architectures decrease CCU by a factor of ten.

I think in terms of some big games, because they rely much more on the GPU, you will probably not augment the density that much. But we think that overall, we can probably gain a factor of ten on the number of games that you can run on this kind of architecture. So, passing from a max of 20, 24 games to running two hundred games on an architecture of this kind.

Which radically increases profitability.

So, augmenting the density by a factor of ten means also, of course, diminishing the cost per CCU by a factor of ten. So, if you pay $1 currently, you will pay ten cents, and that makes a whole difference. Because let’s assume basic gamers will play 10 hours per month or 30 hours per month; if this costs $1 per hour, this is $30, right? If this is ten cents, then costs are from $1 to $3, which I think makes the match work on the subscription, which is between 5 to 15 euros per month

The secret sauce is peer-to-peer DMA.

[Author’s note: These comments, explaining how NETINT VPU’s deliver a 10x performance advantage over GPUs, are from Mark Donnigan].

Anybody who understands basic server architecture, it’s not difficult to think, wait a second, isn’t there a bottleneck inside the machine? What NETINT did was create a peer-to-peer sharing inside the DMA (Direct Memory Access). So, the GPU will output a rendered frame, and it’s transferred inside memory, so that the VPU can pick that up, encode it, and there’s effectively zero latency because it’s happening in the memory buffer.

5G is key to successful gameplay in emerging markets.

[Back to Olivier] What we’ve been doing with Ericsson is using 5G networks and defining specific characteristics of what is a slice in the 5G network. So, we can tune the 5G network to make it fit for gaming and to optimize the delivery of gaming with 5G.

So, we think that 5G is going to get much faster in those regions where actually the internet is not so great. We’ve been deploying the Blacknut service in Thailand, Singapore, Malaysia, now in the Philippines. And this has allowed us to reach people in regions where there is no cable or bandwidth with fiber.

Latency needs to be eighty milliseconds or less (much less for first-person shooter games).

You can get a reasonably good experience at 80 milliseconds for most games. But for first-person shooter games, you need to be close to frame accuracy, which is very difficult in cloud gaming. You need to go down to thirty milliseconds and lower, right?

That’s only feasible with the optimal network infrastructure.

And that’s only feasible if you have a network that allows for it. Because it’s not only about the encoding part, the server side, and the client side; it’s also about where the packets are going through the networks. You need to make sure that there is some form of CDN for cloud gaming in place that makes the experience optimal.

Edge servers reduce latency.

We are putting a server at the edge of the network. So, inside the carrier’s infrastructure, the latency is super optimized. So that’s one thing that is key for the service. We started with a standard architecture, with CPU and GPU. And now, with the current VPU architecture, we are putting whole servers consisting of AMD GPU and NETINT VPU. We build the whole package so that we put this in the infrastructure of the carrier, and we can deploy the Blacknut cloud gaming on top of it.

The best delivery resolution is device dependent.

The question is, again, the cost and the experience. Okay? Streaming 4K on a mobile device does not really make sense. The screen is smaller, so you can screen a smaller resolution and that’s sufficient. On a TV, likely you need to have a bigger resolution. Even if there is a great upscale available on most TV sets, we stream 720p on Samsung devices, and that’s super great, right? But of course, scaling up to 1080p will provide a much better experience. So, on TVs and for the game that requires it, I think we’re indeed streaming the service at about 1080p.

Frame rates must match game speed.

When playing a first-person shooter, if you have the choice and you cannot stream 1080p, you would probably stream 720p at 60 FPS rather than 1080p at 30 FPS. But if you have different games with elaborate textures, the resolution is more important, then maybe you will actually select more 1080p and 30 fps resolution.

What we build is fully adaptable. Ultimately, you should not forget that there is a network in between. And even if technically you can stream 4K or 8K, the networks may not sustain it. Okay? And then you’ll have a worse experience streaming 4K than at 1080p 60 FPS resolution.

Unlocking the Potential of Cloud Gaming with VPUs

Blacknut-cloud gaming-B.jpg

In this interview, Olivier Avaro, the CEO of Blacknut, discusses the emergence and potential of cloud gaming. Blacknut aims to bring the joy of gaming to the mass market by offering a large catalog of games through cloud-based distribution. Avaro highlights the maturity of both users and technology, making cloud gaming a feasible and attractive option. The interview explores the transition from physical discs to streaming, the importance of cost-effectiveness in delivery, and the architectural advancements in cloud gaming systems.

Avaro emphasizes the potential of hybrid cloud infrastructure and the role of GPU and VPU in maximizing the number of concurrent players and reducing costs. He acknowledges the challenge of making cloud gaming affordable for a wider range of consumers, including those in emerging markets. However, he emphasizes that the cost of delivering the service can be kept within a reasonable range, with subscription prices ranging from $5 to $15 per month, depending on the economic conditions of the region.

The technical infrastructure of cloud gaming is explored in detail. Avaro explains the basic architecture, where games are stored on cloud servers and streamed to users’ devices, eliminating the need for downloads. The key requirements for a seamless experience include sufficient bandwidth, low latency, and a well-equipped server infrastructure comprising CPUs, GPUs, and storage. Initially deployed on public cloud platforms for scalability, Blacknut has devised a hybrid cloud approach to optimize the economics of the service. This involves the incorporation of private cloud servers, allowing for improved performance and cost efficiency.

The interview addresses an innovative architectural aspect of Blacknut’s system. Avaro discusses the decision to offload video encoding from the GPU to a dedicated video processor unit (VPU) provided by NETINT.

This approach increases the density of concurrent game sessions, enabling up to 200 players on a single server. This breakthrough in density enhances the economic viability of cloud gaming platforms by significantly reducing costs.

These insights offer valuable perspectives on the advancements in cloud gaming, the importance of cost considerations, and the technological infrastructure that underpins its success.

Avaro also addresses challenges related to unstable internet connectivity in certain regions, discussing collaborations with Ericsson to leverage 5G networks and optimize network characteristics for gaming. While geographical limitations exist, Blacknut is actively expanding its presence to provide global access to its gaming service.

Voices of Video - Cloud Gaming being Real

Play Video about Cloud gaming platforms can greatly benefit from Avaro's revelation: offloading video encoding to a dedicated VPU, enabling 200 players on a single server.
VOICES OF VIDEO
Cloud Gaming being Real. A conversation with the CEO of Blacknut
Watch the full conversation on YouTube: https://youtu.be/w9Pho6G_bdM
 

Mark Donnigan:
So we are at the top of the hour, and looks like we should get started. Oliver, are you ready to talk about cloud gaming?

Oliver Avaro:
Absolutely ready.

Mark Donnigan:
Excellent, excellent. Well, welcome to those who are joining us live. This is the May edition of Voices of Video. And if you haven’t joined us before, Voices of Video is a conversation, or some might say a real dialogue. Not a podcast, I guess a videocast. We go live on LinkedIn and also a lot of other platforms. And we are talking each month with innovators in the video space. And so this month I am super excited to have Oliver Avaro, who is the CEO of a company called Blacknut. And we are talking about cloud gaming. I will let Oliver tell us all about what his company does. But welcome to Voices of Video, Oliver.

Oliver Avaro:
Look, thanks a lot, Mark, for the nice introduction. So my name is Oliver Avaro, I’m the CEO of Blacknut, which in short is doing to games what Spotify did for music, right? So we are distributing game from the cloud, large catalog of games, more than 700 games so far, and this for a simple subscription fee, right? I was long time a gamer. I enjoyed it a lot when I was a teenager. I enjoyed it a lot with friends, with my family, later with my kids. And I started Blacknut in 2016 with the big ambition to actually brings this joy of gaming, this good emotion, all the also positive value of playing together to the mass market. We deployed the tech for about three years. I think cloud gaming does require a bit of technology to work efficiently. Then we started deploy it all over the world and this is where we are today.

Mark Donnigan:
So we are at the top of the hour, and looks like we should get started. Oliver, are you ready to talk about cloud gaming?

Oliver Avaro:
Absolutely ready.

Is the Blacknut CEO a gamer himself?

Mark Donnigan:
I love it. So I have to ask the question, sometimes when we’re building advanced technologies, we get so into the technology, we don’t get to do the thing that we originally set up to do like play games. So are you still a gamer? Set aside time each day to play?

Oliver Avaro:
I set aside each time to play a little bit. That’s true. And I have to say that I was a… The first game I played was on the Commodore 64 machine, it was named Boulder Dash, right? The older of the audience will know about it. Now I’m still, I’ve been playing with my kid of course on the Wii, all the Nintendo games. And Mario and Super Mario Kart and Super Mario Galaxy, right? And to be truly honest, I’m still playing a bit with my kid, but mostly I’m touching a bit Pokemon Go sometimes to still get a conversation with my wife on gaming.

Mark Donnigan:
That’s good. That’s good. Well, I am really excited for this conversation. And I was just thinking back as I was making some notes for what I thought we should talk about. And in 2007 I had the distinct privilege, and I really do consider it to be a privilege, to be a part of a company, one of the early, early innovators of streaming what we call now OTT, and at the time it was transactional VOD. The company still exists, it’s called Voodoo. And we had this crazy idea to take the Blockbuster, those who have been around for a little while will remember Blockbuster video stores in the US. Other countries, they had the equivalent. And eventually I think Blockbuster did expand outside the US. But you’d go to the video store, you’d rent a disc, DVD, and then eventually Blu-ray, and you would drive home so excited for the family to join around the TV and watch it.

And I can remember how shocking it was to have built this amazing experience where every title was in stock. And those of us who remember the video store, remember that that was part of the challenge, on new release day you had to rush down to the store to be the first in line so you could even get the movie, because they only had so many copies. And then of course you had to worry about did I return it, did I return it by the deadline or do I have to pay for a second day. There was a lot about the experience that actually wasn’t so great. And yet we were shocked at how many people said, “Why would I want to stream over the internet? DVD is great. This is amazing. Look at the quality. No one’s going to want to replace the DVD.” Well, 15 years later, obviously that sounds absolutely crazy, as now the entire world is streaming and we can’t even imagine a world without it.

But as I was thinking about cloud gaming, it feels like maybe we’re a little bit further than we were in 2007, but they’re still not everybody’s convinced. And I’m even surprised that major publishers that I’m coming across, and it’s not a foregone conclusion that the console is going to be replaced with streaming. And so let’s start there. Oliver, I have to imagine that a lot of what you’re spending time doing, aside from building the technology, is making the case for why internet delivery of a game experience is going to be better and is ultimately better than something that’s installed on a PC, downloaded or a console. So what insights do you have to share about where we are in this transition from consoles and discs to streaming for games?

Oliver Avaro:
And Mark, I think the analogy with the Blockbusters I think is very relevant. And I feel that first, in terms of market maturity for the end user, we are probably at that point where people would question, “Why should I do that? I can download a game, why should I actually stream it? Why do something different?” Right? And when I created Blacknut, actually a person that I highly respect told me, “Wow.” People will not use it because they can download it, right? Now, if you look at where we are right now with people now consuming all the media, like audio and video and your musics and books in a streaming manner, it seemed that definitely having those people accessing games the same way seems to be actually, it’s the right idea or the right next step, right?

And I do think that there is a bit more of maturity of people actually willing to access games this way. Now, there has been probably an inflection points in terms of technology maturity. I think the technology, meaning basically the hardware you can have on the cloud, the bandwidth you have available on your home, as a kind of device you have to run it and so on, is good enough to provide actually a great experience. And I do think that we are at the time here where we’re passing this inflection point that probably years ago it was not sufficient. And we have seen lot of companies trying to do this, but actually failing and failing really badly. But actually learning a lot from these failures.

So I think we’re at a very exciting time now where we have this maturity in terms of technology. We have the maturity of the end user, because they are used to consume this kind of media with audio, video, eBooks and so on. So probably they’re craving to get access to game, and more and more people are gaming. And we have also the maturity of the content owner and the publisher. So I think we’re at a very, very good time in the market.

Deliver at ultra low latency. Possible?

Mark Donnigan:
Well, I definitely agree that we are much further advanced than we were. I think of some of the things that we had to do, Voodoo in 2007 actually required an appliance, a device with a hard drive in it that we could download the first 30 seconds, maybe a minute of every single title in the library in it. At that time, the library was not as big as what the libraries are today. But just because streaming bandwidth was 768 kilobits. Maybe 1.5 megabits was really fast. If you were really lucky you had 5 megabits. My, how we’ve grown. So it’s definitely we’re in a better position.

Before we get into the technology, because that’s where we’re going to spend the bulk of our time today. But something that I think also you’re in a really good position to address is, is the cost side. So certainly, we’re at a place today with the cloud that you can deliver anything, really anywhere via the cloud. So the notion that you can do cloud gaming, i.e., it’s possible to deliver an ultra low latency, very high quality experience from the cloud. I don’t think anybody conceivably would say, “Oh, I don’t believe that. That’s not possible.” But there is a real issue of the cost. And so why don’t you address where we’re at in terms of just delivery cost, and I’m speaking of OpEx. Where are we at? I mean, is this possible but not affordable, or is this possible and affordable, even for someone who might not be able to charge their consumer a whole lot of money? Not all markets are the US or Western Europe, or some of these regions where consumers are willing to pay $10, $15, $20 a month.

Oliver Avaro:
No, that really is a key issue, Mark. Because, as you mentioned, I think we passed the technology inflection point where actually the service becomes to be feasible. Technically feasible, the experience is good. We think it’s good enough for the mass market. I am sure that some people will be unhappy with it. Really, core gamers will say, “Well…”

Mark Donnigan:
Sure.

Oliver Avaro:
Probably the same people that when the DVD came they say, “Well, I still want to listen to my vinyl on my turntable because this is what I’m using to listen my music. And you will not beat that quality with digital sound.” Right? But for the mass market, I think we got to the point where the feasibility is here. Of course we need good bandwidth, stable, very low jitter, so the variation of the latency. But we are here right.

Now, the issue is indeed on the unique economics and how much it costs to actually stream and deliver games in an efficient manner, so that it is affordable basically for the mass market. And one thing here is I think the gaming is not done. Okay? There is some challenges. As you know, the cost of streaming depends on the number of hours per month, let’s say that you stream. We think that we got at least some maturity where it’s becoming available so that you get to a price point which is what people expect, which is between $5 to $15, depending on the how poor are the country is. So we think this is realistic. But of course, it depends on the intensity of the player, how much they play. And if you want somehow to really sustain and to have great economics, there is still some improvement to be done. Okay? And I would say we have the baseline architecture that allows the service to be profitable, to make it really work, really scale. There is still some margin of improvement. And we have ways actually to improve this unique economics.

Technical infrastructure

Mark Donnigan:
So you’re saying right now that to the end user, which means that the actual cost to deliver the service has to be less. But to the end user, about $5 a month to $15 a month is a target that is possible to reach?

So $5 a month, even in more emerging markets where maybe subscription prices cannot be what they are say in the US, feels like that’s doable. So that’s actually good to hear. Tell us what is the technical… Let’s talk now about what the technical infrastructure looks like and what it takes to deliver. How have you built your system? And then we will get to the broader architecture of Blacknut and what exactly you’re offering. But let’s start with what is your system built on? What does it look like? What are you deploying? Is this a cloud service? Is it run all on prem?

Oliver Avaro:
So basically, the architecture of cloud gaming is somehow simple. You take games, you put them on the server in the cloud and you’re going basically to virtualize it and stream it in the form of a video stream or in some other format so that you don’t have to download the game on the client side, and you can play it as you are playing a video stream. And when you interact with the game, you send a command back to the server and then you interact with the game this way. And so of course bandwidth need to be sufficient, let’s say 6 megabit per second. Latency need to be good, let’s say less than 80 milliseconds. And of course you need to have the right infrastructure on the server that can run games. No games mean a mixture of CPU, GPU, storage, and all this need to work well.

We start deploying the service based on public cloud, because this allow us to test the different metrics, how people were playing the service, how many hours. And this was actually very fast to launch and to scale. So this is what the public clouds, the hyperscaler, SCP, and so on provides. That’s great, but they are quite expensive as you know. So to optimize the economics, we actually built and invented in Blacknut what we call the hybrid cloud for cloud gaming, which is a combination of both the public cloud and private cloud. So we have to install our own servers based on GPUs, CPUs and so on, either directly in Blacknut or with some partners like Radian Arc so that we can improve the overall performances and the unique economics of the system. That I think allowed us to build a profitable service. I think if you just match basically the public cloud currently, I think this is super hard to get something which is viable. But with this kind of hybrid cloud, I think it’s actually very doable.

Mark Donnigan:
And these are standard x86, commercial, off-the-shelf, Intel, AMD machines. I mean, there’s nothing special required or have you gone to a purpose-built design?

Oliver Avaro:
No, the current design is basically definitely specific for the private cloud, but it’s based on standard x86. And for GPU we use a AMD or NVIDIA. Okay? We have a mixture of different providers, but basically this is, I would say reasonably standard architecture, with a mix of CPU, GPU and storage.

Cloud gaming use case

Mark Donnigan:
The cloud gaming use case is a primary one and that’s obviously why we got introduced. And you are using Netin, which we will get to. But kind of the key measure from a technology perspective, and it maps directly back to cost, for a cloud gaming installation is the number of concurrent sessions per server. Obviously, just stands to reason that the more concurrent sessions or players that you can get on a server, well, it’s going to be less expensive to operate and to run. So that’s not too difficult to understand.

One of the things that’s really interesting is, and I’d like for you to talk about this architecture where you have the GPU rendering the game, but you’re actually not doing the video encoding on the GPU. So what does that look like? And also, talk to us about the evolution, because that’s not where you started. And most cloud gaming platforms today are attempting to keep everything on the GPU, which has some advantages, but it has some very distinct disadvantages and trade-offs. And the disadvantage is you just can’t get the density, which means that your cost per stream likely cannot meet that economic bar where you can really affordably deliver to a wider number of players. I.e., you can’t drive your cost down so you have to charge more, and there’s people who will say, “Well that’s too expensive.” But talk to us about this architecture.

Oliver Avaro:
So that’s correct, Mark. I think the ultimate measure is the cost per CCU, right? The cost per concurrent user that you can get on a specific bill of material. If you have a CPU plus GPU architecture, the game is going to actually slice the GPU in different pieces in the more dynamic manner and in the more appropriate manner so that you can run different game and as much game as possible. Right? So typically if you get on the standard GPU, you can run probably a big game, like a large game and you can cut the GPU in four pieces. If you run a medium game, you can run it maybe in 6 or 8 pieces. And if you run a smaller game, then maybe you can get to, I don’t know, 20 pieces, right?

There is some limits on how much you can slice the GPU for the GPU to be still efficient. And likely, for example, the NVIDIA centralized you to slice one GPU in 24 pieces, but that’s it, right? And so there is some limits in this architecture because it all rely on the GPU. We are indeed investigating different architectures where indeed we are using a VPU, like NETINT is providing a video processor that will somehow offload the GPU of the task of encoding and streaming the video so that we can augment the density. And we see it in as terms of full architecture as something which will be a bit more flexible. I think in terms of number of big games, because they rely much more on the GPU, probably you will not augment the density that much. But we think that overall, probably we can gain a factor of 10 on the number of games that you can overall run on this kind of architecture. So passing from a max of 20, 24 games to a time 10, right? Running 200 games on architecture of this kind.

Mark Donnigan:
Yeah, that’s really remarkable. And just in case somebody isn’t doing the quick math here, what you’re saying is that is it with this CPU plus GPU plus VPU, which the VPU is the ASIC based video encoder, all in the same chassis, so the same server, we’re not talking about different servers, you can get up to 200 game players simultaneously, so concurrent players. Which just radically changes the economics. And in our experience, working with publishers and working with platforms, cloud gaming platforms, nearly everybody has said literally without that it’s not even really economical to build the platform. In other words, you end up having to charge your customer so much, and where the experience is, it’s not viable.

Oliver Avaro:
That’s correct.

Mark Donnigan:
Yeah, that’s important.

Oliver Avaro:
And for certain category of games, definitely you can reach this level. So actually augmenting the density by a factor of 10 means also of course diminishing the cost per CCU by a factor of 10. So if you pay $1, currently you will pay 10 cents, and that makes a whole difference. Because let’s assume basic gamers will play 10 hours per month or 30 hours per month, if this is $1, this is $30, right? If this is 10 cents, then you go to one to $3, which I think makes the match work on the subscription, which is between 5 to 15 euro per month.

Is hardware super expensive

Mark Donnigan:
One of the questions that comes up, and I know we’ve had this conversation with you, is how is this possible? Because anybody who understands basic server architecture, basically it’s not difficult to think, well, wait a second, isn’t there a bottleneck inside the machine? And this must require a really super hot rodded machine. So maybe the cost savings is offset by super expensive hardware. And I think it’s important to note that the reason why this is possible is first of all, the VPU is built on NVMe architecture. So it’s using the exact same storage protocol as your hard drive, as the SSDs that are in the machine. And what we have done, what Netin has done is actually created a peer-to-peer sharing inside the DMA. So basically the GPU will output a frame, a rendered frame, and it’s transferred literally inside memory, so that then the VPU can pick that up, encode it, and there’s effectively zero latency, at least in terms of the latency is so low because it’s happening in the memory buffer.

And so if anybody’s listening and raising an eyebrow wondering, “Well wait a second, surely there’s a bottleneck.” And especially if you’re talking 60 frame per second, which by the way, our benchmarks are generally always at 60 frames per second. Because unless it’s real casual games, you need that frame rate to really deliver a great experience. Even above resolution in some cases, it’s better to get the frame rate up than to increase the size of the frame.

Oliver Avaro:
Absolutely. Absolutely.

Mark Donnigan:
Yeah. Let me just pause here and say that we would love to have questions. And so feel free, on whatever platform, if you’re on YouTube or LinkedIn or wherever watching us right now, just type in and I will try and pick those up. I have looks like, like we already have one. I think this is actually a really good one. I’m going to pick this up right here. But feel free to enter questions in the chat. So Oliver, the question is, “I live in a country where stable internet is not always available.” And by the way, I would say that this isn’t only a country issue, internet varies, right? And the expectation of users is more and more that they don’t think about the fact that I’m in a car, I happen to be in an area where there’s great coverage, but seven miles down the road that changes, right? They want to keep playing and keep enjoying this great experience.

So the question is, “I live in a country where stable internet is not always available. How will this affect the gaming experience?” And yeah, I mean, that’s the question. So what’s your experience and how are you guys solving for this?

Oliver Avaro:
You see, in Netflix or Spotify, you can actually buffer content so that even if your bandwidth is a bit clumsy, you can actually store that content in the CDM and keep the experience good enough, right? Or you can download the video and make it work. So definitely you have some way to solve that problem in I would say cold media, right? Media that you can encode in one way, then stream later. In games, this is completely different.

Mark Donnigan:
Yeah, you can’t do that.

Oliver Avaro:
Because we have to encode, stream, deliver, and then in text integration right away. So if your bandwidth is not enough, if the quality of the bandwidth is not enough, and not only in terms of the size of the bandwidth but also in terms of characteristic. The latency, how this latency is stable and so on, then the experience will be great, right?

So what we’ve been doing actually with Ericsson, okay, is to use 5G networks and to define specific characteristic of what is a slice in the 5G network. So we can tune the 5G network to make it fit for gaming. And to optimize basically the delivery of gaming with 5G. So we think that 5G is going to get much faster in those region where actually the internet is not so great. We’ve been deploying the Blacknut service in Thailand, in Singapore, in Malaysia, now in the Philippines and so on. And this has allowed us to actually reach people in regions where there is no cable or bandwidth with fiber and this kind of things. So look, I’m not going to solve a problem where bandwidth is not available, but maybe bandwidth will come faster with 5G and that could be the solution.

Mark Donnigan:
Yeah, I want to make a comment there, and thank you for the answer. We are seeing, so it’s very interesting, and I’ll use India as an example. So for years in video streaming, the Indian market was used as an example of where it was very difficult to deliver high quality, and especially if you wanted to deliver say 720p, and 1080p was almost assumed at a certain period of time it’s not even possible. Because the network capacity and the speeds were just so low.

What has happened is, and India’s a great case study here, but it’s really almost all regions of the world, as these infrastructures, these wireless infrastructures have been upgraded, they leapfrogged literally from 3G or in some cases even 2.5G and before, and just went all the way to 5G. And so in the last five years there has been such a fundamental shift in bandwidth availability that in some cases, some of these regions of the world, not only is it definitely no longer true that they’re slow, they’re faster than some of the more developed countries. So I do want to make that statement there. One question, Oliver, can you talk about is this webRTC? What protocols you’re using? There’s a lot of talk right now about QUIC. And I think that would be interesting for some of the listeners who might be wondering even what protocols you’re using.

Oliver Avaro:
So we use standard codeX to start with the bottom line. We have not embedded codeX, we have been into the standardization industry of audio and video for quite some years, and I think you have great experts here doing great technology. And this technology is actually embedded into the chipset, into the hardware, so actually you can rely on hardware encoding and decoding capabilities. So we do think standard codeX is basically a must have, right? Of course you need to configure them the right way because you have to code real time. Okay? So you cannot use a particular techniques to wait for a couple of frames or more, so you have to optimize this. But basically we use standard codeX.

Then on the protocols on top of this we have actually a large variety of protocol. It depends on the device on which you are streaming. So it can goes from full-property protocol that we have invented and patented in Blacknut, to standard webRTC. Okay? So if you look at devices like Samsung and LG, which are basically the top manufacturers, I think the service has been launched on LG. We are going to announce, I think our launch with Samsung in very short time. And these devices support webRTC, and that basically is the only way to implement and to support the cloud gaming solution efficiently. So short answer, we use a wide range of protocol, always the one that is the most appropriate and provides the best experience to the end user. We’re using at of course new protocol, new standards, experimenting this. But I would say for the main streamline new solution, we use our own solution plus webRTC. It’s the only… that they’re there.

The end-to-end latency targets

Mark Donnigan:
The end-to-end latency targets, I think previously you made the comment about 80 milliseconds. But give us some guidelines, what is, obviously the answer is as low as possible, but what’s the upper limit where the game experience just falls apart? It’s just not playable?

Oliver Avaro:
You know that the limit for conventional video is about 150 milliseconds. For playing games, this is much lower, probably half of it. So I think you can get a reasonably good experience at 80 milliseconds for actually most of the game that does not require this kind of fast reaction. But then if you want to go to FPS or this kind of thing, that really need to… to nearly be reactive at the frame accuracy, which is very of course difficult in cloud gaming, you need to go down to the 30 millisecond and lower, right? And then I think it’s only feasible if you have a network that allows for it. Because it’s not only about the encoding part, the server side and the client side, it’s also on where the packets are going through the networks. Okay?

Because you can have the most efficient systems in terms of encoding latency and decoding latency, but if you bucket instead of going directly from the server to the end user, go here and there and transit in many places, then your experience will be crappy. And Mark, this is actually a real issue, because we for example had a great demonstration with Ericsson in Barcelona of the Mobile World Congress. And we had servers in Madrid, but when we first make the first test, we discovered that the packets were going from Madrid to Paris, and back to Barcelona, right? So this need a bit of intelligence and technology to make this connection as efficient as possible.

Mark Donnigan:
Tell us about Blacknut, what exactly you guys deliver?

Oliver Avaro:
We provide basically a cloud gaming service, which is, let’s say categorize it as a game as a service. Okay? This means that for the subscription fee per month you get access to the real stuff. You get access to 700 games. We are adding 10 to 15 new games per month, which is I think the fastest pace in terms of increasing game on the market. And we provide this experience on all single devices that can actually receive a video. Okay? So that’s what we do. And we distribute this service either B2C, so direct to the consumer. So if you go on your Blacknut webpage, you can subscribe, you can access to the games. But we also distribute it through carriers, so telecommunication carriers, operators all over the world. We currently have about 20 signed agreement with the carriers live actually. More than 40 signed, and we are signing and delivering one to two new carriers per month. So that’s the pace where we are in Blacknut. And there’s the choice to use carriers here is for the reason I explained to you that it’s good to have.

Mark Donnigan:
Optimization of the network.

Oliver Avaro:
You need to know where the packets are going. You need to make sure that there is some form of CDN for cloud gaming that is in place here that makes the experience optimal.

Mark Donnigan:
Yeah, it completely makes sense to me, especially because you mentioned the 5G optimization. And obviously carriers, yeah, they’ve been investing now for years in building out their 5G networks. But they’re always looking for reasons to drive more value and to really extract the full potential off the 5G or out of the 5G investment. So yeah, it really makes sense.

Oliver Avaro:
That’s the kind of thing we’re doing as well with our partner Radian Arc, and we are putting a server at the edge of the network. So inside the carrier’s infrastructure so that the latency is really super optimized. So that’s one thing that is key for the service.

The architecture

Mark Donnigan:
What is the architecture of that edge server? What’s in it? What CPU, GPU, VPU. Describe that.

Oliver Avaro:
We started with a standard architecture, with CPU and GPU. And now with the current VPU architecture, we are putting actually a whole servers consisting in AMD GPU, Netin VPU. And basically we build the whole package so that we put this in the infrastructure of the carrier and we can deploy the Blacknut cloud gaming on top of it.

Mark Donnigan:
And are you delivering to only a handful of fixed resolutions? If I was on a TV for example, do I get 4K or do you limit to 1080p or how do you handle that?

Oliver Avaro:
Again, great question. Okay? We actually can handle multiple resolution. I think we can stream from 720p up to 4K. The technology basically has no limits for it, right? And streaming 4K or even 8K is a problem that has somehow been solved already, from a technical matter. The question is, again, the cost and the experience. Okay? Streaming 4K on the mobile device does not really make sense. I think the screen is a bit more so you can screen a smaller resolution and that’s sufficient. On a TV likely you need to have a bigger resolution. Even if actually there is great upscale available on most of the TV sets, we stream 720p on Samsung devices and that’s super great, right? But of course scaling up to 1080p will provide a much better experience. So on TVs and for the game that require it, I think we’re indeed streaming the service about 1080p for the game that requires this.

Mark Donnigan:
Do you also find that frame rate is almost more important than resolution?

Oliver Avaro:
For certain games, absolutely. But again, it is game dependent. Of course-

Mark Donnigan:
It’s game, yeah.

Oliver Avaro:
If you are on a FPS, you probably, if you have the choice and you cannot stream 1080p, you would probably stream 720p at 60 FPS rather than 1080p 30 FPS, right?

Mark Donnigan:
Yes.

Oliver Avaro:
If you have to make some trade-off. But if you have different games where the textures, the resolution is more important, then maybe you will actually select more 1080p and 30 fps resolution. And what we build is actually fully adaptable. Ultimately, you should not forget that there is a network in between. And even if technically you can stream 4K or 8K, the networks may not sustain it. Okay? And then actually you’ll have less good experience streaming 4K than actually a 1080p 60 FPS resolution.

Gaming anywhere where you live?

Mark Donnigan:
Okay. I see a question just came in and it is how do we know where the service is available or is it available anywhere you live? And so I think you can answer that question, but why don’t you also explain are there geographical limitations? Is your content available anywhere? And then as an extension, I don’t think you actually talked about how many publishers you have. You did talk about every month you’re onboarding I think 10 or 12 new games. But yeah, so are there geographical restrictions? How can someone access this?

Oliver Avaro:
Great. Let’s start with content. Okay? Indeed, we have more than 700 games right now, 10 to 15 new games per month. And we actually try not to have geographical limitation on the content. Okay? So this being the content we have on the catalog is, from a licensing point of view, available worldwide. So that’s basically what we do. And we do have exceptions, as usual. But basically, a large part of the catalog is available worldwide. Now deploys this catalog of different region, we are available in more than 45 countries. We definitely need to have servers that are close enough to the end user so that the streaming experience is good enough. And we think that a reduce of between 750 to 1,500 kilometers probably the maximum. So I think we will actually put some point of presence in those geographical areas so that basically the latency, limited by the speed of light, that does not harm the service.

So of course if you look at it, we have Europe very much covered. We have US and Canada very much covered. We have a large portion of Southeast Asia, Korean and Japan very much covered. We are now expanding in Latin America, which is a bit harder. We have a strong presence now as well in the Middle East, with partners like STC in the region. And of course we have some zone that are less covered. Africa is not well covered at all. South Africa is, but basically the rest of Africa is a bit harder to reach.

Mark Donnigan:
By the way, what is the website? Why don’t you give out the URL there?

Oliver Avaro:
www.blacknut.com
I think try the service. We’ll be very happy to support and give feedback. I’m very interested in the feedback as well.

Mark Donnigan:
It’s super exciting. And as I said in the beginning, for me personally, having been really in the very early stages of the transition from physical entertainment delivery, I’m talking about movies specifically, like DVDs, to streaming. I’m just super excited to also now, 15 years later, be there with games. And there’s a lot of work to be done. And as you pointed out, the experience is absolutely not exactly mapped. We can’t throw out the console yet. But the opportunity to bring really the gaming experience to a much wider audience is really enabled with streaming. So by the way, so I think there’s a follow on question here. Do you have infrastructure in South Africa? You mentioned Africa’s not covered as well, but…

Oliver Avaro:
Yes, we do have the capacity to deploy the service in South Africa, absolutely.

Mark Donnigan:
To deploy in South Africa. Okay, great. Great. Well, we’re right up against time and thank you for everyone who joined us live. Really appreciate it. And thank you, Oliver. It’s amazing what you’ve built. And we’re super excited to be working with Blacknut.

Oliver Avaro:
Thank you everyone. Thanks, Mark.

Cloud Gaming Economic Factors and Technical Considerations

Cloud Gaming Economic Factors

The gaming industry has come a long way. In 2022 it played host to an estimated 3.2 billion players worldwide, generating a total revenue of $184.4 billion, according to Newzoo.

One of the most remarkable developments in recent years has been the accessibility and affordability of gaming. Players can now enjoy gameplay on almost any device connected to the Internet via subscription services in addition to traditional PC and console games.

Game publishers have made great strides in adopting the latest graphics and hardware technologies. However, a delay in moving to cloud gaming from console-based approaches could open the door for disruption from subscription video platforms like NETFLIX. Just as NETFLIX disrupted the home entertainment rental ecosystem with their always-available subscription streaming service, they could do the same with gaming.

Cloud gaming platforms operate in a highly competitive environment with narrow margins. In the United States, popular cloud gaming platforms like Amazon Luna start at $4.99 per month. This makes choosing the right GPU for game graphics rendering and video encoder essential for profitability and competitiveness. Cloud gaming platforms specifying video encoders should consider four key factors; CAPEX, OPEX, Quality, and not funding their competitors.

Lowest Cost Per Stream

For a cloud gaming platform, the cost per stream represents the initial investment required to set up the platform, including the cost of servers and encoders. With the cloud, the cost per stream impacts the profitability of a managed service like a cloud gaming platform to the point of making the entire business model viable.

ASICs are the secret to making a cloud gaming service viable. With an ASIC-based encoder like the NETINT Quadra T2 VPU (Video Processing Unit), coupled with a GPU from AMD, a single server can deliver as many as 200 simultaneous 720p60 gameplay sessions. This performance beats the previous high-water mark of 48 game play sessions using eight GPUs in a single server chassis.

Lowest Possible OPEX Per Stream

OPEX (Operating Expense) represents the ongoing costs of running the platform, including electricity, bandwidth, and maintenance. Energy (electricity) costs are a significant part of OPEX, and they are increasing in many regions. This makes power consumption an important and key consideration for choosing an encoder.

NETINT VPUs are the ideal hedge against rising energy costs, ensuring the platform remains viable despite uncertain energy and economic conditions.

Compared to CPU-based encoding with software, the Quadra T2 VPU consumes 10 to 20-times less energy at only 40 watts per hour delivering the same throughput. Depending on the host server configuration, as many as ten VPUs may be installed making each server the functional equivalent of ten to twenty high-end server machines.

Rack space requirements should also be considered. With colocation prices ranging from $50 – $300 per month, the additional servers needed in a software only implementation would cost up to an extra $5,700 per month for 200 gamers (co-location costs only). While costs may be less if housed in your own facility, you still need racks, cooling, and maintenance for 20 servers compared to one.

With subscriber rates starting at $4.99 per month and in some cases lower, margins are razor thin making high-density transcoding and efficient power usage essential to profitability. This should put ASIC-based transcoders on the short list of all cloud gaming services.

Quality Considerations

A long-lingering misconception about ASICs is that the quality cannot match that produced by the software. Obviously, video quality depends upon configuration options and the operational state that the encoder is operated in. Internal tests show that the HEVC output quality of NETINT VPUs is quite competitive to software and other hardware transcoders, especially when run in their lowest latency state. See Table 1.

For example, as compared to x265, the Quadra VPU produced better output quality than NVENC, the popular encoder that is available on NVIDIA’s more recent GPUs and x265 up to the medium preset. x265 using the medium preset produces quality that is close to VOD. But it is an operational mode not commonly used because of the computing power needed.

Most live streaming engineers use the x265 veryfast or superfast presets. When compared to the x265 superfast preset, Quadra VPU produced the same quality and with an additional 25% bitrate reduction, which translates to significant savings.

Cloud Gaming Economic Factors and Technical Considerations
Table 1. BD-Rate PSNR quality comparisons between Quadra, x265,
and the NVIDIA RTX 3090 encoder in low latency settings.

At the extreme right, you see that Quadra was able to match the quality of the NVIDIA RTX 3090 HEVC encoder at up to an 11.57% bitrate production. ASICs producing quality that rivals software encoding is not unusual. As discussed here, Google has achieved near-software quality with their ASIC-based ARGOS transcoder as well. This shows that clearly, you do not need to compromise on quality to achieve the density and efficiency benefits of ASIC-based transcoding.

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HARD QUESTIONS ON HOT TOPICS
Cloud Gaming Economic Factors and Technical Considerations
Watch the full conversation on YouTube: https://youtu.be/PM5Ts9Ko7DA

Hidden Costs of GPU

Evaluating the cost of hardware is relatively straightforward if the primary factors are easily understood and defined. However, with GPUs, there are hidden costs that are not always recognized or acknowledged. For example, as tech platforms expand their offerings, Cloud gaming platforms could find that they are funding potential competitors.

As an illustration, the US Federal Trade Commission is attempting to block Microsoft’s acquisition of Activision, partly because the Azure cloud platform gives Microsoft a cost advantage over cloud gaming platforms without similar infrastructure.

Presumably, Amazon with AWS, has the same advantage. Similarly, this article describes the cost advantage that NVIDIA derives from other services that buy its GPUs for game rendering.

Another hidden cost can be found in the complexity of the procurement process for GPUs. Due to the supply chain issues triggered by COVID, and the incredible demand spike for GPUs, simply having the opportunity to buy the amount needed was far from certain. Still, your negotiation strength could have significant sway on the price or delivery schedule that you received. Put simply, for anyone needing to buy GPUs in the quantities needed by a cloud gaming platform, it cannot be assumed all that is needed is a P.O.

Finally, there’s a significant loss of negotiating leverage once a gaming platform chooses a GPU vendor, and this is particularly true when the GPU performs double duty in rendering frames and encoding them for streaming. Once a platform chooses a GPU vendor, their technical architecture is essentially locked with that selection, so they can’t switch to another GPU vendor without significant development time and cost. This puts the platform at a disadvantage when negotiating with the selected vendor as they have limited bargaining power.

Often, GPU vendors abuse this leverage by charging expensive license/API costs or refusing to make improvements for their customers. In other cases, this lack of bargaining power could lock platforms into using a GPU-based encoder that delivers uncompetitive quality as compared to third-party options. Some GPU vendors may even refuse to undertake enhancements that would enable the use of third-party transcoders, even if this would improve throughput and quality and reduce OPEX for the game platform.

By implementing a dedicated transcoding unit separate from the GPU, a cloud gaming platform can decouple its design into standalone GPU and VPU modules. This makes it simpler for vendors to switch to different vendors, providing significant leverage to negotiations with all vendors.

The Cloud Gaming Opportunity

According to Newzoo, cloud gaming is one of the fastest-growing gaming industry segments, with a CAGR of 50.9% from 2020 to 2023, accounting for 49% of the global gaming market. Cloud gaming is a benefit to players in all regions and it opens up new entertainment experiences for many people without access to expensive consoles or who cannot afford the newest games.

For others, access to high-quality gaming is a way to extend the entertainment experience outside of the home. Also, it offers a way for mobile gamers to access games that they may be unable to play on their mobile devices due to hardware limitations.

With NETINT VPUs, you can deliver
a premium experience profitably.

The business and market outlook for cloud gaming is sure to be a growth driver not to be ignored. With NETINT VPUs, you can profitably deliver a premium experience. Reach out, and we’ll happily show you how to move forward on this exciting trend.

The Components That Make Cloud Gaming Production Affordable (or Not)

CPUs, GPUs, and ASICs - major cost elements of cloud gaming platforms with commercial examples of hardware combinations and stream output. Normalizing comparisons on a single form factor is essential.

If you’ve made it past the title, you know that cloud gaming platforms operate in a highly competitive environment with narrow margins. This makes the purchase and operating costs per stream critical elements to system success.

This brief article will lay out the major cost elements of cloud gaming platforms and cite some commercial examples of hardware combinations and stream output. We’ve created a table you can use to collect the critical data points while looking at potential solutions around the NAB show, or if you’re simply browsing around the web. If you are at NAB, come by and see us at booth W1672 to discuss the NETINT solution shown in the table.

At their cores, cloud gaming production systems perform three functions; game logic, graphics rendering, and video encoding (Figure 1). Most systems process the game logic on a CPU and the graphics on a GPU. Encoding can be performed via the host CPU, the GPU, or a separate transcoder like NETINT’s ASIC-based Quadra, which outputs H.264, HEVC, and AV1.

The Components That Make Cloud Gaming Production Affordable - diagram 1
Figure 1. The three core functions of a cloud gaming system.

Given the different components and configurations, identifying the cost per stream is critical to comparison analysis. Obviously, a $25,000 system that outputs 200 720p60 streams (cost/stream = $125) is more affordable than a $10,000 system that outputs 25 720p60 streams (cost/stream = $400).

Power consumption per stream is also a major cost contributor. Assuming a five-year expected life, even a small difference between two systems will be multiplied by 60 months of power bills and will significantly impact TCO, not to mention the environment or regulatory considerations.

Finally, normalizing comparisons on a single form factor, like a 1RU or 2RU server, is also essential. Beyond the power cost of a system, rack space costs money, whether in colocation fees or your own in-house costs. The other side of this coin is system maintenance; it costs less to maintain five servers that deliver 1,000 streams than 20 servers that deliver the same output.

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HARD QUESTIONS ON HOT TOPICS
Get the cost per stream with the proper mix of GPU, CPU, and ASIC-based VPU
Watch the full conversation on YouTube: https://youtu.be/xaSRL847eIs

Comparing Systems

Enough talk; let’s compare some systems. Let’s agree up front that any comparison is unavoidably subjective, with results changing with the games tested and game configurations. You’ll almost certainly complete your own tests before buying, and at that point, you can ensure an apples-to-apples comparison. Use this information and the data you collect on your own to form a high-level impression of the value proposition delivered by each hardware configuration.

Table 1 details three systems, a reference design that is in mass production from NETINT, one from an established mobile cloud gaming platform, and one from Supermicro based on an Ampere Arm processor and four NVIDIA A16 GPUs.

Table 1. System configurations.

To compute the pricing information for the systems shown in table 2, we priced each component on the web and grabbed maximum power consumption data from each manufacturer. Pricing and power consumption shown are for the components listed, not the entire system. The number of 720p outputs is from each manufacturer, including NETINT.

Table 2. Component cost and power usage, total and on a cost-per-stream basis.

From there, it’s simple math; divide the cost and total watts by the 720p stream count to determine the cost per stream and watts per stream. Again, this is only for the core components identified, but the computer and other components should be relatively consistent irrespective of the CPU, GPU, and VPU that you use. 

ASIC-based transcoders plus GPUs are the most cost-effective configuration to deliver a profitable and high-quality game streaming experience.
We are happy to share our data and sources so you can confirm independently.

As you walk the NAB show floor, or check proposed solutions on the web, beware of custom bespoke architectures using proprietary solutions (e.g. all Intel, all NVIDIA, all AMD). Each company has their demos that showcase technology, but not operational competitiveness. None of these systems can meet the OPEX or CAPEX needed for a competitive and profitable cloud gaming solution.

We challenge you to get your own numbers and compare them!
Download the printable TABLE HERE