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.
Microsoft and Google are both incorporating AI-powered chatbots into their core search offering. This will create a better user experience for some search categories earlier in the customer journey.
Search is a huge prize, bigger than TV advertising, and AI represents the biggest potential shakeup to that market since the rise of mobile. With ~95% market share outside China, Google's risk is to the downside.
Search is an early, but not the most natural, home for conversational AI: Microsoft and Google have also announced integrations into productivity software. Expect a wide range of services to be transformed by AI integrations as startups and tech giants alike seek share in newly contestable markets.
Consumer tech revenue growth ground to a halt by the end of 2022.
Changes in technology and user behaviour are creating risks for incumbents.
Shareholder pressure is driving efficiencies, but high costs are an inevitable response to growing challenges.
Microsoft’s planned acquisition of Activision Blizzard is in trouble. US, UK, and European regulators may make the deal impossible for Microsoft—and a disaster for Activision and the wider industry.
Sony’s late improvement in PlayStation 5 sales is only just enough to reach its target numbers for the year. It needs a more dynamic approach to a rapidly changing industry, and a less dogmatic message to consumers and regulators.
Netflix Games is more than a trial—it’s on track to become a major games platform.
A combination of factors drove the worst quarter ever for big tech growth, though the secular shift online of the economy and society will continue.
Advertising demand is down, reflected in lower prices. Ads did better the closer they are to transactions, with variability by category.
Efficiencies and AI are the investor-soothing buzzwords going into 2023.
The Copyright Royalty Board (CRB) delivered its Web IV ruling on statutory SoundExchange licensing rates for webcasters for 2016-20, raising Pandora’s total music royalty costs by a forecast 12% in 2016
Had the CRB sided with SoundExchange, rates for Pandora’s non-subscription tier would have shot up 79%, leaving the company floundering in a sea of red ink
Nevertheless, these increased licensing costs for Pandora over 2016-20 will postpone the moment when the company attains net profitability
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BBC proposals for local media set out on 7 September offer solutions to an alleged market failure, without much evidence, contained in February’s Future of News report.
There is no dispute that local commercial print and online media operations have suffered heavy revenue losses since their peak a decade ago – the industry is, however, still profitable, innovation and online growth are helping to stabilise the top-line, and new enterprises are emerging.
Local media publishers prefer a turbo-charged BBC policy of linking to their sites to the proposal for a local media digital hub fed by publishers and 100 BBC journalists.
Germany remains the second largest market in Europe for the exploitation of composition rights by their authors, with €382 million paid out to them in 2014, up 8% on 2013 (63% share of distributions on average). The German Government intends to secure an even “better balance for authors” in their contracts with music publishers, by allowing the composer to “re-tender” their contracts after five years to secure a better deal
GEMA, the collecting society, has a strong position in Germany and is poised to lead the development of the digital single market for online music services. Together with PRS for Music (UK) and STIM (Sweden), GEMA has formed a joint venture (JV) to offer multi-territory licensing and copyright administration services to services, music publishers and other CMOs, cleared by the EU Commission
Music publisher revenues from domestic collections could rise from €225 million to €247 million from 2014 to 2017, due to a moderate rise in broadcast revenues on the back of the economic recovery, a boost to public performance revenues from a higher live music tariff and flat royalties from recorded music expenditure, as the decline of physical mechanicals is offset by the rise of online royalties
News Corp’s original bid for full ownership of BSkyB was withdrawn because of the phone hacking scandal. It was never blocked by regulators. Had it not been for the scandal, the bid would almost certainly have been approved.
With the phone hacking scandal fallout largely over and the election of a friendly government, the climate is now much more favourable to a renewed bid. With undertakings, we believe it would be approved by regulators.
The increasingly global scale of TV and film distribution means the commercial case for the bid is, if anything, stronger now than in 2010. The questions are simply whether the right price can be agreed, and how high up it is on James Murdoch’s list of priorities.
The Game Developers Conference (GDC) and Mobile World Congress (MWC) saw major announcements in virtual reality and new generation streaming game consoles, as well as further opening up of access to game engine software
Latest earnings reports show that major publishers and developers are currently in buoyant form as growth in the PlayStation 4 and Xbox One install base boosts revenue and consumers migrate to digital sales
Results for developers dependent on the mobile or online ecosystem are more mixed: King (producer of Candy Crush) continues to grow, but Zynga is struggling, although recent performance hints at a possible halt in its decline