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.

Sony PlayStation’s next CEO will have hard decisions to make: compete against a resurgent multiplatform Microsoft, or retreat and defend an increasingly rickety PlayStation console model.

New gaming hardware will have an outsize influence in the year ahead, giving gamers unprecedented choice, starting with XR headsets and continuing to a likely new Nintendo Switch.

YouTube’s foray into browser-based games will be the service to watch in 2024. If successful, streaming services, including Netflix, will be on track to become heavyweight game platforms.

A new era is starting for the big consumer tech companies, as they venture outside of their traditional comfort zones to bet on future growth—most obviously in AI, and then cloud, gaming, headsets and video.

Competition in the tech space is intensifying as incumbents go head-to-head in new revenue growth areas also populated by insurgent startups—their M&A watched closely by competition regulators.

Fat profit margins have ensured vast financial resources are available to pour into competition, but hitting the right targets for consumer engagement is key to success.

The EU's approval of the Microsoft acquisition of Activision Blizzard enforces expansive pro-consumer remedies that are in stark contrast to the 'hard no' CMA decision in the UK.

Cloud gaming remains the wedge issue in a global standoff amongst regulators over reining in Microsoft and other big gaming platforms.

The overall deal is still in considerable, possibly terminal, trouble with the UK appeal and US lawsuit still to be resolved, and the FTC hearing due in August.

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. 

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.

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.

With major studios arguably over-indexed on SVOD, the stickier experiences of interactive entertainment and the metaverse will eventually form a critical pillar of studio D2C strategy, boosting subscription services and tying in closely with consumer products and theme parks.

Disney’s appointment of a Chief Metaverse Officer is good first step, demonstrating a strategic interest in the space. But other major studios remain cautious and distracted, with limited capability beyond licensing to engage in the metaverse for the next 24 months and possibly longer.

Meta will need to provide a strong guiding hand creatively and technically to ensure its new partnership with NBCUniversal is a success, and to evangelise the metaverse and its revenue model across the Hollywood studio content space.

Advertisers are rushing to create immersive virtual experiences to promote their brands, particularly on social gaming platforms with large built-in audiences. The interest shows no sign of waning.

We are in the very early days of metaverse marketing: formats are bespoke, costs are high and the data provided by platforms is rudimentary. Not all product categories are suited to a virtual incarnation.

The long-term promise is tantalising: advertising that is better than its real-world counterpart, that forges new relationships with customers, and that forms part of the product offering rather than just promotional activity.