Gaming Everywhere, But Don’t You Want Them At Home?

Monday February 25, 2016 – Shelby Cunningham

It’s still a little early to know if Sony has something else up its sleeve, but after the PS4 announcement I feel like Sony isn’t meeting the competition head on. The Xbox 360 has been the PS3’s primary competitor, and the Xbox 360 has dominated the living room in terms of gaming and Internet video streaming, as well as being able to be used as a pay TV STB in some instances. Sony logged success with its streaming services too but Microsoft has been more aggressive and successful at taking over the living room for gaming and video streaming.

Microsoft hasn’t even officially announced the next generation Xbox yet and we have already heard significant rumors about focus on TV integration, use as a pay TV STB, DVR, and Internet streaming, as well as traditional gaming of course. We have seen the official PS4 announcement that promises a new controller and the integration of cloud gaming for backward compatibility. In addition Sony wants to focus on “gaming everywhere.”

With the announcement of the PS4, why does it appear that Sony has shifted visions with this new “gaming everywhere” focus? Similar to the familiar “TV everywhere” system and movement, Sony wants to bring gaming wherever the gamer may happen to be. This is an interesting concept for consoles, which in years past have sought to bring the gamer into the living room and tried to convince him or her to use the console for more than just gaming (to use it for all kinds of entertainment in fact).

Why build a sophisticated piece of hardware to plop into a living room and then send the gamer out into the world?  Why not just allow them to update their PS3s and other Sony hardware devices, making use of the recently acquired Gaikai cloud gaming capabilities?

Not emphasizing a “media center” aspect of the new system appears to be a change in strategy, or at least, messaging.

To be fair, many people will appreciate the focus on gaming, but I believe a wider audience will not be available down the road for this device unless it offers more than games. 

Can BB10 and WP8 impact Android/iOS smartphone dominance?

Tuesday February 19, 2013 – Stewart Wolpin

Republicans/Democrats. VHS/Beta. Team Jacob/Team Edward (ask your kids). And, of course Android/iOS.

Most folks, especially technology folks, like a simple choice, one or the other (the Xbox/PlayStation/Nintendo ménage à trois a notable exception). All of which makes the recent rumblings of competition in the smartphone space so fascinating.

According to recent figures from a number of sources, Google and Apple are battling over nearly 90 percent of the smartphone market. But two wannabees – one a former king looking to reclaim its crown, the other a potential usurper – are fighting an uphill battle. As in the real world, however, third-party and even fourth-party candidates don't stand much of a chance.

Take Windows Phone 8, please – at least that's what Microsoft is pleading. But despite having a critically lauded interface (personally, I think it far superior to Android for novice smartphone users), Microsoft's smartphone share actually shrank in the holiday shopping Q4 last year, from 3.6 percent to 2.9 percent.

Microsoft's problems

Any increased consumer adoption of Windows Phone 8 faces four major hurdles.

One, being the soft acceptance of the Windows 8 desktop OS. Microsoft clearly hoped the creation of an end-to-end OS ecosystem a la Apple would lead to broader WP8 market share. But according to Net Applications, uptake of Windows 8 didn't even reach Windows Vista's levels.

Two is Microsoft's demographic marketing approach. Ads from Nokia, especially for its Lumia 920, for instance, are aimed at perhaps the most loyal user group in tech history – iPhone owners. iPhone is an OS you switch to, not from.

No, the soft underbelly of the smartphone market is Android, whose users rarely take anywhere near full advantage of the often overly complex OS and whose users lack a parallel desktop version. Given the open nature of the OS, Android owners are far less emotionally and technologically invested in the Google ecosystem than Apple acolytes are, which means it should be easier to lure Android owners to switch to the friendlier WP8 platform.

Even lower-hanging fruit for Microsoft are feature phone owners susceptible to compelling reasons to jump on the smartphone bandwagon.

Colorful WP8 handsets – and low pricing (Verizon is offering the wonderful Nokia Lumia 822 for free on contract) – are clearly designed to target non-smartphone owners. But Microsoft's marketing seems to completely ignore this non-smartphone owning constituency.

Three is a lack of enterprise adoption. Since Microsoft is targeting lower-end consumers, WP8 has gained no corporate traction. Without some sort of management mandate, there's no forced foundational user base.

Finally there's Microsoft's smartphone party arrival tardiness. For most consumers, the market has already made up its mind – Apple or Android. No matter how clean, efficient and innovative WP8 is, the OS is perceived as an interloper, a Johnny-come-lately and especially a gamble. Why invest, consumers ponder, in an ecosystem that might not be around in a year or two?

Given this last hurdle, WP8 future – or lack thereof – may result in a case of self-fulfilling prophecy.

BlackBerry's problems

BlackBerry's task is more daunting than WP8 because of its fall from its once lofty smartphone market perch.

Less than three years ago, BlackBerry lorded over the smartphone world. Even after iPhone had been available for two years, BlackBerry still maintained a significantly larger share of the smartphone market over iPhone.

But now, BlackBerry's share of the smartphone market is minuscule in comparison (ouch), and still falling fast (oucher).

What doomed BlackBerry wasn't iPhone or even Android or even its own failure to develop a compelling touchscreen alternative – it was the iPad.

Realizing its error in ignoring the enterprise market when it unveiled the iPhone, Apple carefully laid the foundation for corporate adoption of the iPad. iPad then served as a Trojan Horse for executive acceptance of iPhone and iOS.

What has followed in the last two years is an exodus more shocking than the Hebrews from Egypt. Company after company, government agency after government agency, have abandoned BlackBerry for Apple, with several high profile switches awkwardly announced (for BlackBerry) in the days after the introduction of BlackBerry 10 and the Z10 handsets on January 30.

Worse were two very public BB10 burps. First came the death of New York Magazine's Z10 review unit and subsequent tongue-in-cheek eulogy. Then, there was a tweet by newly-minted BlackBerry creative director Alicia Keys – reportedly from an iPhone. Keys awkwardly asserted her Twitter account had been hacked and that she's been using her Z10 exclusively in 2013, but the mainstream media may have missed (or not believed) this subtlety.

The BlackBerry Z10 is a fine device, despite the death of New York Magazine's review unit, and BB10 represents some solid OS steps forward. But neither is likely enough to cause a reverse migration – it's sort of like leaving a second spouse to go back to your first just because s/he's had plastic surgery and gotten a better job.

While the Z10 and BB10 may help stabilize BlackBerry's bleeding, it may be a case of too much, too late. The damage to BlackBerry's tainted corporate reputation may be too much to overcome. Combined with Microsoft's WP8 seeming failure, it seems Apple and Android will uneasily maintain their smartphone market dominance.

Pay TV's Future: Curation, Not a la Carte

Monday February 11, 2013 – Greg Scoblete

"I bought a bourgeois house in the Hollywood hills, with a trunk-load of hundred thousand dollar bills. Man came by to hook up my cable TV, we settled in for the night my baby and me. We switched ’round and ’round ’til half-past dawn. There was fifty-seven channels and nothin’ on." - Bruce Springsteen

When the Boss sang "57 Channels (And Nothin' On)" the year was 1992. Fast forward to today and Springsteen's channel-surfing woes would be much, much worse.

This over-abundance of content has naturally led to a lot of frustration. On the consumer side, there's the sense that the majority of their cable bill goes to pay for channels they don't watch. For pay TV providers it creates a complicated user experience that manifests itself in an impenetrable grid/program guide that everyone agrees is cumbersome in an age of visually rich user interfaces.

One solution that's frequently bandied about is "unbundling" or "a la carte." Rather than group channels together into various service tiers, pay TV operators could, the theory goes, simply let consumers pick, chose and pay for only the channels they're interested in seeing. In practice a la carte simply isn't feasible given today's market structure. While it's true that sports packages consume a disproportionate share of an operator's programming costs, smaller, niche channels may struggle to stay viable when their reach shrinks, as it naturally would in any unbundling scheme.

But there is a new, alternative future coming into view, and that is "curation." Rather than sift through an endless channel guide, pay TV operators will present their customers with a selection of content that they believe is of interest, using recommendation algorithms in the same way that Netflix is able to surface shows you may enjoy. They will also enable greater customization. At CES, the cloud-based user interface firm ActiveVideo showed off technology that would allow pay TV subscribers to create customized channel clusters based on themes (sports, science, etc.) with live video thumbnails for each channel grouping.

Cisco also stressed content personalization during its CES press conference. Their new "Snowflake" interface, which will be rolled out to service providers as part of Cisco's Videoscape Unity package, combines multiple content sources -- pay TV channels, video-on-demand, YouTube, social networks -- into an experience that can be personalized to each member of the home. The same content recommendation algorithms that Netflix and Amazon use to such great effect are being ported over to cable and IPTV providers to deliver this personalized experience.

In the curated future, you'll still subscribe to hundreds of channels, but you'll only see those that you're interested in. You will have, in effect, the illusion of a la carte, if not the trimmed bill that should accompany it.

Looking ahead, it's also possible that this curated approach will suck more wind out of Apple's (still opaque) TV plans. Aside from Siri integration and an elegant display, the big hope underpinning an Apple foray into TV is the notion that they will be able to force an a la carte approach on pay TV providers. If consumers are getting something close to the a la carte experience from their pay TV providers, they'll be less tempted to jump ship for a "virtual MSOs." At least, that's the theory.

Optical Illusion

Monday February 4, 2013 – Maya Jasmin

So another CES has come and gone and in the past few weeks my colleagues have so eloquently highlighted what stood out on the showroom floor, and any extensions of that floor – i.e. hotel rooms, lunch tables, or cramped corners in the press room – that showcased the next big (or little) idea. And I must admit, as a relative newbie to the show I was starry eyed and intrigued by all the gadgets, from the robot that rode a bike to the beautiful and lifelike 8K HDTV display (with a picture so crisp I shamefully admit that I thought it was a mural when I passed by). But after the show was said and done it was those products that are no longer drooled over or blogged about that danced around in my head.

With connected TVs, phones, tablets, and gaming systems being the stars of the show, what about the less glamorous products that are no longer under the spotlight, such as DVD and Blu-ray Disc players?  Despite reports of near death, DTC forecasts significant shipments for the next five years and likely beyond within the DVD and Blu-ray Disc market. Even in the face of decline, prerecorded DVD and Blu-ray disc shipments are expected to hover above the annual 4.5 billion mark as far out as 2017. And even though Blu-ray doesn’t come close to rivaling its DVD predecessor in shipment volume or longevity, it continues to pump life into the market. Player shipments are expected to experience nominal growth over the next five years with 128 million units shipping in 2013 and 140 million in 2017 on the strength of Blu-ray Disc players. Taking into account PCs and video game systems, DVD and Blu-ray Disc devices are expected to ship over 400 million units annually through 2017.

Even with Internet-delivered and DVR-archived content eating into the market, packaged media continues to hold on to a large portion of the video delivery market with significant growth in select geographies. The days of prolific growth are long gone and most surely will never return for the shiny disc. But to write the packaged media obituary is premature and to ignore it altogether is to miss one of the most significant revenue streams in the video entertainment industry.

For more information on DTC’s Video Optical Disc market forecasts, you can go here to see a table of contents for our Video Optical Disc: Devices and Media report.