Monday, 28 January 2013
"Big Data" is a fashionable term nowadays and of course it boosts the demand for (among others) B2B media companies who often sell the data or setup ways to collect it. Yet, one should remember that the ultimate goal is to get good information to generate more value than competitors. My short article in The European Business Review describes some of the opportunities.
Thursday, 24 January 2013
Yesterday Google's stock went up some 8% after the earnings call for the fourth quarter of last year. The media talk about Google's progress in mobile advertising (see, for example, a Reuters report here). This explanation is a bit ambitious as it is not clear how much of the spectacular growth in revenues compared to last year came from mobile. What is true is that it vastly compensated for the (slowing) decline in advertising rates. This could be a sign that mobile rates are stabilizing but not a sure thing. Clearly though, Google rocks.
Monday, 14 January 2013
This is a really cool chart that appeared in Bloomberg Businessweek (Dec. 10-16, 2012). It shows the share of new game releases for the different game platforms (PC, XBox, Playstation, iPad and their various sequels) for every year between 1975-2012. The chart is complex but closer examination reveals a few fascinating facts.
It is important to realize that the number of new releases per year has massively grown over the years. In 1975 there were only 24 video games on a single available platform, Arcade. By 1987, just 12 years later, this number grew to 1,225 new games/year. Not surprising given the explosion of new platforms (see the blue, yellow and purple 'hills' on the left side of the figure). What is surprising though is that the number of new releases doesn't really change till 2007, that is, for 20 years! In this period, the industry is dominated by two developments. First, platform consolidation. By 1998, 60-65% of games are developed for Microsoft's Windows and DOS platforms and for the newly emerging Playstation. Even in the mid-2000's Microsoft and Sony platforms own 70% of the new releases. Second, in this 20-year period, games become much more sophisticated, with the average development budget increasing from less than $0.1 million to $18 million.
Today, we are experiencing another revolution. It is largely due to the Internet and the associated explosion of a whole new generation of mobile hardware platforms (iPhone, iPad, etc.). In 2011, more than 730 games were released on the iPhone alone, which is only responsible for 15-18% of new releases. This means that the total number of releases in 2012 is around 4,000 games, four times more than the historical peak in the last 20 years! In other words, the Internet almost quadrupled the number of new games and we are just at the beginning of the life cycle of mobile devices.
Finally, it is interesting to see who the winners and losers are among the platforms. Playstation, the inventor of high-end games in the 90's has lost most of its share. Wii, who emerged as a revolution in the mid-2,000s is not doing well. Apple, who dominates the new mobile platforms is a big winner of course. But as is Microsoft, whose Windows platform is still strong (not surprising, given the huge installed base) and who still owns the successful XBox platform.
The interesting questions are (i) how far will the growth go? (ii) who will capture it? (iii) in particular, will the (by now) dominant Android mobile platform be able to get a large share of the gaming apps in the near future? Stay tuned!
Tuesday, 8 January 2013
A really cool video on the evolution of the newspaper business in the US can be seen here. A snapshot is posted below. It basically shows that only the newspapers who convinced viewers to pay for digital content have done well, The Wall Street Journal and The New York Times. In fact, they have increased their viewership and the NYT has now more online users than traditional ones. It is not clear that profits increased though as online advertising rates are typically lower. In any case, the video is very revealing.
Friday, 4 January 2013
Today's Financial Times reports (on its first page) that Google's core search engine is cleared by US regulators from antitrust charges. This is good news for the search engine, which is still not entirely out of trouble on antitrust issues as it faces similar probes this month in the European court. Nevertheless, this is an important step forward and even more so in light of the reason provided for the decision: "Google's search practices don't harm consumers". Google does have a formidable technology that represents strong barriers to entry for competitors. However, as long as this technological advantage is exploited to improve the customer experience there is no reason to stop the industry leader. Let's hope Europe will also lean on the argument of meritocracy...