Mobile gaming trends

Smartphones are taking the world by storm. They appear to be the fastest growing technology we have ever seen. They slowly grew to a 10% adoption rate and then something changed everything: Apple launched the iPhone. 2 years later the adoption rate reached 40% in the US. Right now nearly half the adults in the US own a smartphone.

Tablets are not doing too bad either: 1 in 4 smartphone owners owns a tablet. The tablet market is expected to reach a 40% adoption rate in the US by 2016.

Mobile app stores

Apple pioneered a new way  of looking at software distribution that has deep roots in Steve Jobs’ vision of “connected consumer”. With the launch of the App Store, Apple triggered a behavior based on instant software delivery and micro payments. The great thing about the system is the seamless integration between the devices and the central market. Payments are easy to make, software installation does not require any advanced IT skills and the iOS makes it easy to operate apps.

revenue from app stores
Apple leads the way. Amazon follows closely.

Apple app store market was a huge success. It now features more than 500 000 apps, 66% of which are paid. This apps generated over $3.4 billion revenues Apple paid to its developers. Google Play, the Android app store, paid “only” $240 million.

Google Play is actually not the biggest retailer of Android applications. The main challenger to Apple’s reign seems to be the Amazon App Store. According to mobile analytics company Flurry, Amazon generates 89% of iTunes App Store’s revenue.

Mobile Gaming is on the rise

Angry birds space
A sequel to the popular Angry Birds is expected this year

“All work and no play makes Jack a dull boy”. Jack decided he would play a game on his smartphone and now the mobile gaming industry is expected to generate $7.5 billion dollars in revenues by 2015.

Established game developers such as EA, Gameloft, Ubisoft, talented new comers such as Zynga and Konami and independent game studios jumped the wagon. They had to learn the new rules and understand the mobile users behavior as the mobile gaming industry is a new breed, where concepts such as social gaming, micro payments and in-app purchase matter. The fast growing user base expects new releases, awesome graphics, multiplayer support and the gaming companies serve them well after a few past flops.

Freemium games

The top grossing games share a common feature. They’re freemium. That means they’re free to install and play and generate revenue from in-app purchases. I have discussed the model in the “Social Gaming Architecture” article but let’s go over the basics again:

  • users are free to install and play the game
  • they get incentives to help them understand and start playing the game on a daily basis
  • as the time passes the games are harder to play and game gratification is harder to obtain
  • by buying in-game upgrades the users can get upgrades, virtual coins etc.

The future of mobile gaming

We should expect mobile gaming to become mainstream. With better connectivity between tablets, smartphones and TV’s we will probably see a decline in gaming consoles popularity and sales.

Because the cost of entry in such a market is rather low for now the market will see new challengers to established gaming companies. Rovio was acquired by EA after the highly popular Angry Birds game went mainstream but Rovio is just one of the many studios just trying to get into the market. I expect mobile gaming, just like social gaming was, to have a disruptive effect on the overall gaming industry.

Does internet help education?

“The printing press helped education”. It’s pretty hard to argue with that. When Johannes Gutenberg invented the printing press he had a simple idea in his mind: to help more people read the Bible. Also – make some money out of it (Gutenberg was a goldsmith so we might assume he had some economic motivations).

The printing press helped Europe escape the Dark Ages

 

The printing press

Back then The Church held a monopoly on Bible printing and distribution. Most of the Bibles were hand written in Latin and it was frowned upon, to say the least, to translate or own one. There were few people able to read, let alone read Latin, so the Church held the absolute truth as priests were able to interpret the Bible in any way they found it appropriate.

Johannes Gutenberg changes all that in 1440 with his invention of the printing press. He is credited with having printed the world’s first movable type book, a 42 line Bible.

The context was favorable as Europe was seeing a post-medieval rise in learning, the early notions of capitalism appeared and manifested themselves through a high interest in product efficiency. In just a few decades the printing press spread throughout Europe. This is not as impressive now as we take book publishing  and distribution for granted, we read our books on tablets or the Kindle but back then it was unheard of any technology to spread that fast. In under 4 centuries the book printing output rose from one million to over one billion books.

Soon people began printing more than Bibles. Authorship actually started meaning something. Back when the printing press did not exist the author was not really important. A copy of Platon’s Republic in Paris may have been entirely different from the one in London. Authors where sometimes unknown and most didn’t find any interested in writing something that brought no profit or recognition in return.

The sciences blossomed as people were able to exchange ideas in writing. The arts started blossoming as literature was finding its way to the masses. The first newspaper was printed in 1620, almost 200 years after the invention of the printing press. Illiteracy dropped as educational means were now available and the life quality increased.

We may never know how important the printing press actually was to the evolution of mankind but  we can guess that were it not for the printing press we might still be living in the dark ages.

There was a time when we didn’t have internet access

Imagine the world without internet. It’s pretty hard to do that now as you have probably spent at least an hour today sending and receiving emails, using Google, shopping online or reading the news on your favorite news portal. If you are older than 25 you might remember a time when the Internet was something closer to science-fiction than everyday utility. There was a time when you actually had to wait more then a few days to send a letter to someone across the globe.

How did the Internet came to be?

ARPANET

Back in 1950 a point to point computer communication between mainframe computers and terminals was developed. A decade later this led to the development of several networks and in 1970 one of these networks, the ARPANET, a military developed network, developed the concept of internetworking, basically a network of network. 1982 saw the implementation of TCP/IP, a protocol to allow interconnection. A few years later ARPANET was decommissioned and in 1995 the internet was commercialized.

Bam! Everything exploded! Well – not actually. At that young age the internet was still mainly used for scientific purposes and information exchange.

Soon, though, people started experimenting with email systems, eCommerce, self-publishing, and others such.

A big breakthrough in research and education were the search engines. Before Google there was Altavista and Yahoo. Yahoo was actually a web directory that helped users find websites based on interests. The development of Google meant people didn’t need to browse for hours to find what they were looking for (we might remember the days when a 64kbs dial-up connection was considered a luxury).

The internet and education.

Altavista

Now we can find almost any kind of information online. The search engines crawl billions of webpages on a daily basis, everyone with an access to a computer and  internet can easily publish an article and Amazon is already selling more instant-delivery eBooks everywhere in the world.

Some of the most important universities in the world now have free access to online courses. Have a look at this list to get a glimpse into how much information is available to anyone willing to spend the time to learn.

As  mobile internet consumption rises new education approaches emerge. Apple launched iTunes U, a collection of higher education courses in audio or readable format.  Hard to reach populations are actively taught through mobile internet connections.

Some of the most prestigious universities in the world have online courses that offer a degree with lower education costs for those in less economically stable areas.

The Wikipedia

Yes, “THE” Wikipedia is probably the greatest education feat in the human history. Human knowledge is now accessible for free to those that want to learn more, understand more. It features more than 4 million English articles and is available in 278 languages.

Wikipedia drove the paid print version of Encyclopedia Britannica to extinction as generous article contributors have made Wikipedia the go-to place for fast research.

Internet has changed many things for the better but education is the field that changed most. Never in our history has so much information been available to so many. I believe in a future where individuals are empowered, informed, educated. Internet has mad that possible as education and information became publicly available.

 

What is Shopkick?

Physical stores have a greater conversion rate than online stores. Conversion rate for in-store traffic is 20% in fashion, 50% in electronics and 95% in groceries. Physical stores are therefore superior to online stores in terms of conversion rates where a 5% conversion rate is considered very good. Even though classic retailers benefit from a high conversion rate the traffic is way lower than online.

Shopkick gets traffic to brick-and mortar stores

Shopkick is a company based on a mobile product that works on iOS and Android mobile devices. It uses different in-store incentives (discounts, freebies) to reward potential consumers that choose to check in using the app in the partner stores.

The check-in, incentive redeem technology is quite impressive. It does not use, as one might expect, GPS features as these are not accurate enough. Founder Cyriac Roeding, explains just how accurate GPS on smartphones is: “It is so inaccurate that you could check into a Starbucks two blocks away”.

Instead Shopkick uses sounds inaudible to the human ear to check you into stores. The technology is patented worldwide and Shopkick founder says they are doing great with over 7000 large retail stores.

What is Shopkick after all?

Simply put Shopkick is a mobile based company. But if we think about it – Shopkick is much more than that. It is the bridge between online and offline retail. Its incentives increase real traffic in stores, increase revenue and all with a simple mobile solution.

Shopkick is doing way better than Foursquare in terms of growth acceleration and revenue per user. After all it has real, tangible discounts. While Foursquare offers you electronic badges and peer recognition (“Look buddy, I am the mayor of this place”) Shopkick’s incentives engage users and marketers even more. The numbers are clear on this: with 3 million  monetize – able users Shopkick is here to stay.

Is Facebook trading information with Apple regarding its users? Facebook-Apple partnership?

This is the question that popped into my mind as I saw a Facebook ad leading to an iTunes Album I have previously bought four of songs from (this one). I bought the songs on my iPhone from the iTunes Music store.

I instantly started thinking how could had Apple (or Facebook for that matter) target me so well. I can now see three possible explanations here:

  1. Sheer coincidence. Maybe … just maybe … Apple happened to market that album to the demographic group I happen to be in. Facebook had just shown me an ad pointing to the exact album I had purchased some songs from. Those 4 songs out more that 20 million songs currently available on iTunes. Not very likely, I presume.
  2. Apple and Facebook started an partnership and are now sharing user data. That means that right now Facebook may have access to my contacts, application data I use, purchase history, browsing history and others. Apple has access to my Facebook data, off-iOS related browsing history, Facebook related purchase intent and so on. More likely.
  3. Apple is using data from my Apple account to remarket products on other web platforms. Such as Facebook. This might mean that Apple is not actually sharing data but might be using data collected on the iOS to target users on other platforms. I believe there is an automated marketing system setup on Facebook for ads that run and target users based on their previous purchase history. Very likely
  4. Apple is using application data to target users. Possibly without express consent from the Apple Developers. I use different emails for Facebook and Apple login. This got me thinking about possible data usage by Apple without express consent from Facebook – or other developers. As I believe an integration with Facebook Ads would be impossible in this case without a partnership between the two companies. I would rather rule this one out.

Apple-Facebook partnership highly probable

Having two of the fastest and largest growing technology companies partnering is pretty much amazing in terms of products they could develop. However several privacy and monopoly questions might arise. Apple was part of a privacy controversy in 2010, regarding the iOS 4 privacy policy:

“The revised policy states that Apple has the right to share this information with 3rd parties who provide services to the customer, including advertising and promotion services. Apple also states that “it may be necessary” to provide this [real-time] information in response to “requests from public and governmental authorities within or outside your country of residence or if [Apple] determines that for purposes of national security, law enforcement, or other issues of public importance, disclosure is necessary or appropriate…. Additionally, in the event of a reorganization, merger, or sale we may transfer any and all personal information we collect to the relevant third party.”

The revised policy does not make any distinction between warrant-based and warrantless searches, nor provide what criteria would trigger the sharing of personal real-time information with government entities, nor allow an opt-out for the location-based information.”

Apple, and all the other technology companies for that matter, don’t really deal well with privacy. Mark Zuckerberg is known for stating that the age of privacy is over.

While that might be true and the younger generations are letting go of old-timey privacy concerns I still want my data taken care of with a bit of responsibility. After all I am a paying customer to Apple and not just a target for advertising. While I do appreciate a more contextual advertising as opposed to classic mass communication I believe I and all the other Apple users have the right to share our my information to whomever I choose.

Is there more to the Facebook-Apple partnership?

On one hand we have Apple with more than enough cash than it needs (110 billion dollars to be more precise). On the other hand we have one extremely high potential technology company that might change the way humans interact and is not doing very well on the stock market right now (Facebook stocks have dropped 47% from the IPO and keep going down).

Apple can take advantage on the blow Facebook took on the market and buy stocks that, in my opinion, are sure to rise again. Facebook could do really well with such an unexpected help. Both companies would benefit from such a move:

  • Apple is reaching a innovation plateau and it needs a young, visionary leader or product that might replace Jobs. Facebook and Mark Zuckerberg could fill the gap. Although Zuckerberg is still young and inexperienced he has a certain charisma that could develop in the future. Apple fans need an icon, they need innovation. Also – let’s not forget that Facebook is an one billion users market that Apple could turn into consumers.
  • Facebook is not harnessing the huge potential it has. Facebook gaming, social commerce, mobile are all things that are there but the Facebook team cannot yet capitalize on the growth. Apple is doing really well in all those areas and could share some of the knowledge.

In the end – maybe Apple will not take over Facebook but such a move would benefit both companies and is sure to add at least 10-15 years in the spotlight for them. Unfortunately such a technology behemoth will not be taken lightly by the Federal Trade Commision so the two will have to find ways to find ways to address this.

Internet in my car?

The internet connected car has been a great concept for quite some time now. As 3G connections  become more and more popular and 3G coverage extends to even the most remote areas car manufacturers have seriously taken into account adding internet to your car.

iSuppli’s telematics analyst Richard Robinson expects 25% of all cars to be internet connected in the next 5 years. Changes in auto industry in-car entertainment are expected to be as great as changes in entertainment post and pre dial-up internet connections.

audi connect
Audi Connect will be available to the 2012 luxurious models Audi A6, A7, A8

Intel expects the internet connected car to be the third fastest growing technology, after smartphones and tablets. Audi, Ford, Kia and Nissan are among the first to adopt such technology. Audi has equipped the A7 with a Wi-Fi system callled Audi Connect that turns the car into a hotspot able to host 8 connections at a time.

Ford has also jumped the wagon with its Microsoft powered Sync My Ride and has solved the connectivity issue with a simple internet stick solution.

In car internet killed the radio star

In car internet radio is now an option with MyFord Touch as drivers can tune in to their Pandora accounts and listen to their favorite stations.

Google, Apple, Samsung, Microsoft and LG are already testing connected cars concepts and gadgets. Google has recently confirmed that their self-driving cars have passed the 300.000 miles threshold incident free.

In car internet is surely to develop into a huge industry that will benefit car makers, entertainment and media companies, telecom operators, mobile device producers and of course – the buyers.

How does internet change the auto industry?

As consumers get more attached to their mobile devices and start expecting everywhere connectivity the auto industry will start monetizing on this trend. But that’s not all. What else should we expect? Here are a few consequences of increasing in car internet adoption:

  1. Increase in popularity and subscriptions to internet radios: there is a 52 minutes daily timeframe when 44% of all Americans listen to in-car radio. That margin will turn into revenue streams for internet radios and other internet music streaming providers.
  2. Location-based advertising will lead to a decrease in outdoor advertising: as advertisers will find it easier and more efficient to target consumers on their daily routes, by estimated income and purchase intents, billboards will become obsolete.
  3. Car traffic and mileage optimization: having large data available car manufacturers or internet services providers can offer the best real-time routes for faster navigation and better mileage.
  4. A new class  of in-car entertainment devices: GPS devices had a huge increase in popularity and sales as they were fitted to cars. So will the internet ready entertainment devices.
  5. Increase in driving safety: as more and more cars will get connected they will be able to pair and increase safety by automated collaboration.
  6. Increase in audio books sales. Audio books streaming. So far we got accustomed to listening to audio books on CD’s. With in car internet we will see more and more subscriptions to audio books streaming service. Amazon will surely benefit from this.
  7. Car hacking.  Car software security software. We don’t really expect our car to be “hacked” but this will surely happen. Where there is a connection, there is a potential breach of security. Software security companies will have offers specifically targeted to internet-connected car owners.

Key takeaways:

  • in car internet will happen. get ready
  • in 5 years 25% of all cars will have internet connections
  • there is a great business opportunity in providing connected car owners with car specific internet services

Mobile internet trends

It seems like everything goes mobile these days. Mobile phones get smarter, tablets get more and more popular and people use their mobile phones for much more than voice. Mobile internet usage includes news, entertainment, shopping, social networking and much more.

The Facts on mobile internet

First of all – what is mobile internet? It is the usage of internet on mobile devices such as handhelds, tablets, personal assistants, netbooks or laptops. It has become quite popular in the past 3 years growing growing from under 1% of total internet traffic in 2009 to more than 10% in 2012.

The mobile internet is expected to surpass desktop internet by 2014, as shown in the attached graph (source). Such a fast adoption rate is caused by:

  1. Decrease in PC sales (HP sales in the US decreased 12 percent in the second quarter of 2012 and Dell’s PC sales decreased by 9%).
  2. Increase in tablet and smartphones adoption (Apple alone has shipped over 60 million tablets in just 2 years from launch and more than 20 million iphones)
  3. Decrease in 3G connectivity costs (Idea Cellular decreased the costs for 3G connectivity in India by 70% )
  4. Mobile penetration is disproportionately larger than internet penetration. The global mobile adoption rate is now 86.7% . The global internet adoption rate is 32.7%. Mobile operators will grab out and reach the treasure that is mobile data traffic. They have the infrastructure, the clients and the distribution.
  5. Voice has been steadily declining compared to data traffic in developed countries.

Mobile internet plans are decreasing and adoption rate is increasing – what now?

With mobile internet plans decreasing we will see a clear increase in adoption rate. There is still a long way to go as mobile traffic accounts for only 10% of all internet traffic. Taking into account the fact that Internet has just 32.7% penetration we see that there is a huge opportunity there: mobile internet traffic is due to increase by at least 1000% in the next five years.

How can we benefit from mobile traffic growth?

Using this date one might think of this potential opportunities:

  1. Increase in cheap smartphones sales. As you can see in a previous article almost 75% of all mobile phones are owned by consumers in developing countries. This consumers need low-cost, decent performance, mobile internet ready devices.
  2. Increase in mobile operators revenue. The untapped potential of data traffic is even bigger than the one voice plans had. Mobile operators already have the client base, the mobile infrastructure and the distribution network to reach this potential market.
  3. Increase in mobile commerce: whether retail or paid apps distribution the mobile sales will increase in the future, even at a faster rate.
  4. Premium mobile entertainment: just like apps, paid entertainment will develop at an exponential rate in the future.
  5. Decreased market for desktop based software companies: Microsoft has already began to feel the surge in desktop sales as desktop based software such as Microsoft Windows, Microsoft Office will either adapt or fade away.

Mobile phones to help save lives

There are almost 6 billion mobile phones in the world and almost three quarters of these mobile phones are in developing countries. The mobile phones are probably the best connection people of the world have right now. With costs dropping and mobile penetration closing in to 100% mobile phones might be some of the best ways to tap into human behavior, especially in the developing world.

Digicel, the largest mobile operator in Haiti offered anonymized data regarding the post-earthquake behavior of almost 600 000 people. Results were astonishing. Using the data provided scientists Xin Lu and Linus Bentsson managed to create an algorithm that was able to predict with a 85% accuracy where were people going to go after the disaster.

Mister Xin Lu and Linus Bentsson started FlowMinder.org , a place where they can share their research and mobile operator data for NGOs and relief agencies. They believe that the 30 million people displaced by natural disasters can benefit form this and offer Haiti study as a proof of concept.

What are the opportunities and dangers ?

Several uses can be found in working with such data:

  1. Mobile medical assistance – there are places where the patient to doctor ratio is close to 20.000:1 . Using mobile services and self-help information we can states and private companies can setup healthcare automated services that can deliver helpful information to those in need. Moreover such services can help track the appearance of epidemics and evolution of diseases.
  2. Mobile war relief – on most cases war victims are just estimated statistics and data is gathered rather slow. Real time information is of the utmost importance when dealing with war casualties and refugees. NGO’s and relief agencies can quickly get an outlook on the situation and provide assistance where and when is needed most.
  3. Help fight literacy issues with mobile services – Ghana has an adult literacy level of 64% and an mobile penetration of 80.5% . Using mobile services and in the future rich media streamed through smartphones is a quick and cheap way to fight illiteracy issues.
  4. Help setup the base for barter-based markets in developing countries – using classifieds like services through mobile phones governments in developing countries can fight poverty and hunger while at the same time encouraging micro-entrepreneurial movements.

The dangers of  using mobile data

While many positive ways to use mobile services can be found there are several issues that arise such as privacy, ethical usage of data, security of provided data etc. For example – having data publicly available in a natural disaster such as the Haiti earthquake one might wonder how would this kind of data be used by robbers.

Even worse – in such tragic events such as war, public availability of data can, in the wrong hands, result in many deaths and suffering.

I can only hope that in this connected world we will all feel closer to one another, we will be able to put aside our differences and use technology for good rather than personal interests.