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Enders Analysis provides a subscription research service covering the media, entertainment, mobile and fixed telecommunications industries in Europe, with a special focus on new technologies and media.
Our research is independent and evidence-based, covering all sides of the market: consumers, leading companies, industry trends, forecasts and public policy & regulation. A complete list of our research can be found here.
Games update: A grim forecast for games consoles
13 August 2024Sony PlayStation 5 and Microsoft Xbox unit sales crashed in the last quarter, despite promotional discounting. Neither company appears able to reverse a clear consumer shift away from fixed consoles.
Nintendo Switch outsold Xbox and nearly matched PlayStation sales, even with the Switch 2 set to launch in 2025.
A radical change in hardware strategy and leadership will be the best solution for Microsoft to demonstrate a growth narrative following its acquisition of Activision. Gamescom this month may provide more clues.
Karen Egan was quoted in the Financial Times on "Indian billionaire to buy 24.5% BT stake from Altice".
12 August 2024Karen said “[Mittal] is not short-term. He’ll be completely constructive and collaborative with BT, he really understands the holistic approach of telecoms."
She added that taking a stake in BT was not an obvious move for the company but Mittal’s experience will have given him an understanding of where BT needs to focus.
Joseph Teasdale was quoted in the Financial Times on "Perplexity’s popularity surges as AI search start-up takes on Google".
12 August 2024Joseph said the AI search market was “hotting up”.
“The risk from AI is . . . that general web search as a whole is made redundant by new ways of matching users with information, products and services,” he said. The “big unknown”, however, is whether it can be reliable enough for mainstream use.
“AI is stubbornly prone to confabulation,” Teasdale said. “At the scale of billions of queries per day, serious failures are inevitable.”
Niamh Burns was quoted in The Telegraph on "What can Britain do to tame Elon Musk’s X after the far-Right riots?"
12 August 2024One of the key points of contention is the removal of proposals for controls on material that is “legal but harmful”. The wording sparked concerns of an incursion on free speech, but critics say the U-turn amounts to a watering down of the rules.
“These original proposals were too far-reaching and did have the potential of incentivising platforms to limit free speech online,” says Niamh Burns at Enders Analysis. “But it could be argued disinformation has slightly fallen through the cracks in the end.”
A second-hand future? Mobile operator handset sales
12 August 2024Handset sales by UK mobile operators have been weak for some time as customers keep their phones for longer due to affordability issues, slowing technological advances, and the spread of longer handset contracts.
Though margins on handset sales are often slim, their erratic nature can lead to big EBITDA hits—we estimate that the recent 20% declines at VMO2 and Vodafone have had a 6-9ppt impact on EBITDA.
The operators have an opportunity to improve their fortunes in the refurbished handset market where take-up is low, but both consumer interest and margin potential is high.
Gareth Sutcliffe was quoted in The Standard on "Xbox console sales are plunging. So what now for the gaming giant?"
12 August 2024Gareth said “The direction of travel for console sales is grim....Microsoft have had a terrible year; Sony have followed them having a terrible quarter. And in some respects, it's not a surprise because what we're seeing is that the model they’re offering is really coming under stress"
Streaming fell back into the red again, although with further price hikes on the way—along with "modest" Disney+ subscriber growth—next quarter should see the beginning of a profitable trajectory
In the UK, Disney+ continues to grow engagement—if not necessarily subscriptions—however, we still await a boost from local scripted originals
While the performance of Disney's core segments appears to be stabilising, 2024 remains a year of unfinished projects
Virgin Media O2: The struggle to grow subs
5 August 2024VMO2 survived the hammer blow of lower inflation-linked mobile price increases in Q2 with substantially unchanged revenue and EBITDA growth, helped by improving broadband ARPU
However, both mobile contract and broadband subs suffered declines, likely driven by issues with serving existing customers as well as attracting new ones, and these trends have to improve for the company to return to top and bottom line growth
Guidance implies that EBITDA growth will worsen in H2, but this would be good news in our view if it is driven by expenditure to support improved subscriber growth across broadband and mobile