The spatial computing ecosystem is on the uptick with the wider availability of head mounted devices (HMD). Apple and Meta’s commitment to developing HMDs is existential to conquer the enormous technical hurdles these devices continue to face. 

Apple has chosen to maroon the Vision Pro with a lack of controllers and other design choices making it reliant on mostly passive entertainment. In total contrast, Meta’s deep engagement in gaming and 3D experiences showcases the potential for the HMD category.

Live sports is the outstanding use case for TV experiences on VR headsets, with exclusive NBA VR programming on Quest bringing new levels of immersion and presence, while gaming, and its developers, will still remain the dominant driver for VR and MR for the rest of the decade.

Sony 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.

Meta led the pack of tech results in Q2 with 22% growth and championing a suite of generative AI products; should these falter, Meta can recalibrate by devoting more of its AI infrastructure to core user and ad products. 

AI and the metaverse give Meta an uncertain shot at a new platform play, leveraging its enormous user base and bringing developers back into the fold. 

Reality Labs is still burning cash, but a collaboration with Ray-Ban offers a path to usable head-mounted displays, and could get Meta there faster than Apple’s cutting-edge approach. 

Streaming profitability beckons, but owes much to the profitable services folded into companies’ DTC segments alongside the headline streamers.

There is a broader move towards bundling and price rises. The former bolsters subscriber additions and lifetime value but is ARPU-dilutive, while price rises will bump up both ARPU and churn.

2024 marks the first year with multiple players at scale in the ad space, as Prime Video entered the market. Other streamers with high CPMs and lower scale may be forced to re-examine their offerings.

Device makers regained their mojo at this year’s MWC, with phones a crucial route to generative AI becoming a daily habit. 

AI software has improved and proliferated, but limited differentiation leaves room for consolidation as a competitive funding crunch looms. 

Unanswered questions loom large, but won't dim AI's potential. 

Meta's China risk is overstated: the spend from Chinese advertisers is diverse and resilient to everything short of a full-blown trade war. 

Apple (and Tesla) are in the more precarious position of selling directly in-market, and face sharpening domestic competition.

Amazon's exit from selling in China still leaves it exposed: its marketplace strategy is built on Chinese sellers, whose potential routes to market are proliferating with local platforms going global.  

Apple's first headset is an experimental offering, but promises to be version one of a compelling but controversial device category.

The Vision Pro is not being pitched as a metaverse device, and not just because Apple refused to use the term. Applications are focused on where a good experience can be delivered today.

Contrary to expectations, Meta could be the main beneficiary in the short term, as the Apple halo boosts the headset category's respectability and developer focus.

Recent developments in AI have ignited a frenzy in the tech world and wider society. Though some predictions are closer to sci-fi, this new phase is a real advance.

We view AI as a ‘supercharger’, boosting productivity of workers. The impact is already being felt across media sectors, including advertising and publishing.

Firms thinking about using AI should assess which tasks can be augmented and what data is required. Be prepared for unpredictable outputs and a changing legal and tech landscape.

The CMA's decision to block Microsoft’s takeover of Activision reflects the lack of trust regulators have in Microsoft’s leadership and its future plans for game services.

The decision ultimately rewards Sony PlayStation, the market leader, which has little incentive now to transform its high-cost model, but will also stymie PlayStation's own acquisition ambitions.

Getting approval for the acquisition is difficult but not impossible. The European Commission may approve the deal in May. 

The games industry, with the potential to become the world’s largest media and entertainment sector by revenue, is undergoing profound transformation.

The consolidation of major developers is a response to a revenue model pivoting toward subscription, with direct consequences for those already in the subscription space: film, TV and music.

A technology-led creative medium, with an audience approaching three billion gamers, is seeing its franchises become more valuable and useful than ever.