I saw this crazy shift in person a few weeks ago at the airport. I heard what sounded like a war movie and turned around to glare at the person who was rude enough to watch something on his phone in public without headphones (a major pet peeve) and was shocked when I saw a 12-year-old playing PUBG on his phone. I had heard that they were working on porting the game to mobile, but was amazed at how clear the picture was and how latency didn’t seem to be an issue at all. It truly is an amazing time for gaming.
Regarding microtransactions, I’ve read a lot about pushback from governments recently. Loot boxes in particular have been under scrutiny, with US regulators starting to look into them and The Netherlands declaring that they are considered gambling and thus must be removed from games. More regulation here may limit revenue in the short term for game makers, but I’d think the increased transparency will have long-term benefits.
What is interesting about the shift to services is that it still relies on the sales of hardware, which, based on your post and comments, is losing its luster. Because of Apple’s closed ecosystem, it can only sell services to users who are bought into the hardware platform. I am of the opinion that 90% or more of iPhone users and a high (but decidedly lower) portion of people with flagship Android phones are overpaying for their devices because they don’t take advantage of all features or hardware. Somehow Apple has convinced everyone that they need the absolute best product on the market. In no other industry can can company do that – imagine if Ferrari convinced everyone they needed to own one, even if they couldn’t work the manual shifter out of first gear! I know Apple stock is doing well and they have a ton of cash, but I think they need to open up their ecosystem, invent whatever will be the next revolutionary piece of hardware, or it will be a long decline for Apple. (p.s. I hate Apple, if you couldn’t tell!)
Great post! I think there may be a bit of an overreaction to the disruption that big data will provide. I think we will still need people to be able to explain and understand the outputs of big data, and consultants will shift towards this. One data scientist may find correlations, but that does not mean causation. Also, there is an assumption that all clients have enough data to leverage these platforms. Having spent some time in consulting, I was amazed at how poorly a lot of very large companies organized their data. I think we’re a ways away from big data leading big consulting firms to recruit only data scientists and not MBAs.
I lived in a building in New York that would trap someone in the elevator (often for multiple hours) about once a month, so I’m all for predictive maintenance here. Predictive maintenance is huge in industrial machinery, so it makes perfect sense to apply that to elevators. Ubering the technician market may have unexpected consequences, however. This would likely reduce the total number of technicians due to more efficiency, but that may cause a shortage in coverage should there be multiple breakdowns at once – predictive maintenance isn’t perfect after all.
I agree that this use of analytics is beneficial for Allstate, but I have a broader concern with the business – what happens to auto insurance when autonomy takes over? This is not a short-term problem, but becomes very real when human drivers are relegated to closed circuits and daily driving is 100% autonomous. To borrow from BSSE, this sustaining innovation will only last until autonomy – the great disruptor – comes and shakes up the market.
Interesting topic, Hans, and congrats on the Super Bowl. It’s interesting that it’s taken this long for teams to decide to go for it more on 4th down (not to mention 2 point conversions). There is a high school coach that has been doing this since 2008 and has a bit of a cult following. According to MIT, “in the 2008 State Championship season, Kelley never punted and has done so just four times in the last three seasons. According to maxpreps.com, Kelley’s Bruins lead the nation in offense two of the past three seasons.” He was the USA Today Coach of the Year in 2016 and will be speaking at the MIT Sloan Sports Analytics Conference next year.
I am quite concerned with the regulatory scrutiny you mentioned at the end of the post. I think that some of the major ‘winners’ in the tech space – Amazon, Google, Facebook – might be winning too much! In this case, I wonder if Amazon has other ideas for leveraging the technology other than at a grocery or convenience store. This could just be a ruse for them to master machine vision and then apply their learnings elsewhere.
Gamestop is one of the most depressing places you can shop. Their pushy salespeople clearly want to be anywhere else and their stores are now cluttered with tchotchkes that have more to do with movies and TV shows than video games. That said, there are still a lot of people who don’t have the internet speeds (or patience) required for digital downloads. PC gaming leads in this space since computers don’t come with disc drives anymore, but most consumers still buy physical discs for console games.
Gamestop is clearly a dying brand and it is unlikely that they could win in the digital space. Is there anything wrong with extracting cash prior to liquidation?
BAMTech is definitely an industry leader, I remember the first time I was able to watch a live game on my phone and it came through in perfect HD! They even run media for the NHL – they operate NHL.com as well as other related sites and their streaming platform, NHL.tv. It’s interesting to think that BAMTech could easily eclipse the value of the organization that started it. Hopefully the owners of some franchises (like the Marlins) will spend their new weatlh on payroll.