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Latency is defined as the time taken for a data packet to travel from one point to another and back. In applications which require real-time communications, high latency slows down the communications and may result in quality degradation.
In applications like multi-player online games, video conferencing and Internet telephony (e.g Skype) latency becomes an important factor because if your latency is too high, it means the data is taking too long to return to you.
If the latency exceeds 300ms, the delay can be picked up by the human ear. For Internet telephony and video conferencing users, this means experiencing poor voice quality and a long pause between words. For gamers, they will experience what is called lag – a slowdown in gameplay and in extreme circumstances the entire game "freezing" for several seconds, long enough to be defeated by the enemy.
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