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 transition from linear to digital and on-demand usage has the potential to unravel national television ecosystems. Global tech monopolists may eventually control the interface and content discovery paths, pushing European providers down the supply chain.
Maintaining cultural sovereignty over the industry’s architecture is a prerequisite of a thriving, pluralistic ‘electronic public square’, as well as a high performing and locally-relevant creative economy.
Only consolidated commercial broadcasters have sufficient scale to steer national markets towards digital models where European content providers retain prominence and their ability to set the popular cultural agenda.
Netflix’s decision to launch games as part of the subscription bundle is smart business: rewarding current subscribers, leveraging its IP, and signalling that subscription is the best long-term revenue model in the games space.
Expect technological innovation to be central to Netflix’s ambitions with games. Netflix will make it easier for different game experiences to occur, and ways to attract external developers will inevitably follow.
For Disney, Netflix just made the battle for customers more difficult and more expensive. Disney will need to make hard decisions about how to approach the games business—something it has shown before it finds difficult to do.
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.
Despite relying on a narrow IP base, US content production is booming, overwhelming other markets and seeking alternative distribution to cinema.
Responding to the rise of Netflix and Amazon Prime, studios seek to shift distribution from wholesale to retail—but only Disney may succeed.
Most content is likely to remain accessed by consumers through bundles. Provided they engage with aggregation, European broadcasters can adjust to the new studio model.
The pandemic has caused an unprecedented demand boom and revenue windfall for the games industry, allowing developers to ease production bottlenecks, assist remote working, and spend more cash on games that matter.
Producing quality game experiences remotely—from greenlight through to release—has driven innovation and flexibility, and much needed change for game studios.
Most large game developers expect a return to in-studio development late in Q3 2021. Many workers hope a return will not also bring back toxic game production environments.
The games industry enjoyed a robust 2020, with the pandemic creating high demand across titles and platforms. Now a core part of the mainstream media and entertainment ecosystem, games share of entertainment spend and audience viewing time will maintain momentum and increase in 2021.
The demand for, and value of, premium content has migrated to game IP, with top franchises driving increased M&A activity and tighter integration with film and TV output, and providing an important advertising channel.
The pandemic has provided breathing space for the industry on regulatory scrutiny of revenue models, and overall consumer safety. Regulators need to increase their speed in 2021, and act decisively on predatory ‘free-to-play’ game mechanisms.