"Videogame companies are spending millions of dollars to build faster networks for online games that attract tens of millions of players apiece".
"Electronic Arts Inc., for example, says its spending on lag is in the same bucket as its investment in analytics and security. Estimates put the cost in the single-digit to low tens of millions of dollars. But as game companies create more hit games and gain more players, the costs can grow".
"Riot is piecing together its own network backbone, in part by leasing space on fiber-optic cable from telecommunications providers including Level 3 Communications Inc. and Zayo Group Holdings Inc. Riot said it expects to finish the bulk of its U.S. and Canada network at the end of March. The company said it is also talking to Internet service providers such as Comcast Corp. to ensure gamers’ data is routed through its new network instead of slogging each step of the way through the pipes that make up the Internet.
A private backbone is just one avenue for game companies. Another involves plunking down servers closer to where large groups of gamers live".
"Valve Corp. acknowledged in a November blog post that its popular “Dota 2” game suffered from “significant network issues across multiple regions,” in some cases disconnecting players from game servers. Valve, which has a private Internet backbone, blamed the problem in part on distributed denial-of-service attacks like the ones that brought down the online networks of Sony Corp. ’s PlayStation and Microsoft Corp. ’s Xbox Live over Christmas.
Building an international network backbone can cost the smallest developers millions of dollars a year, Perseus Telecom Chief Executive Jock Percy said, which is typically 10 times more than running a basic service over the public Internet."
"Activision, Valve and Riot declined to say how much they are spending to beef up their networks. Analysts at SuperData Research estimate that Riot, which was bought by China’s Tencent Holdings Ltd. in 2011, will spend between $10 million and $20 million building out its infrastructure in 2015.
Annual maintenance costs could rise to $4 million a year. Still, that’s a small sum considering that “League”—Riot’s only game to date—generated about $1.3 billion in revenue in 2014, SuperData estimates. Riot declined to comment on its finances."