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Titanfall and the Future of Game Consoles

After more hours of sleep deprived nights than I care to admit, I’m convinced that Titanfall shows us something about the future of consoles. Specifically, they are not dead. I’m not saying the market for consoles is gigantic, or even growing, but it is still very alive and well.

A game like Titanfall is simply not coming to a device other than a game console or PC any time soon. More importantly, this game reminds us when good software developers are given incredible performance at a CPU and GPU level, they take advantage of that performance. There is a saying in the semiconductor industry that I’m fond of: “You will never hear a good software developer say we have enough performance.”

Titanfall has redefined the first person shooter genre. First person shooters will never be the same and this game will serve as the mechanism for that change. Halo did similar things for the space on the first XBOX and Titanfall will do it again on the XBOX One. The idea that cloud gaming platforms or mobile devices will render consoles moot any time soon is pure silliness.

Since I have a background in semi-conductors, I study them regularly. There are mobile device roadmaps, and there are heavy client or more compute based roadmaps. Just because mobile processors will get more powerful than they are today does not mean they will ever be more powerful than those being built for high-performance applications. Console gaming is one of these high performance applications.

The question is not whether mobile devices or other things will kill consoles but whether or not there is still a big opportunity in consoles. Just casually watch a male, young or under 45, walk through a room where others are shooting, racing, or blowing things up and you will know the answer.

Without question, the total addressable market for mobile game developers is bigger than the total addressable market of consoles. But that does not mean the console market is not healthy. The only case one could make that consoles are dead is that developers will no longer make a game like Titanfall and any number of titles like it. These developers are not focused on bringing this experience to a mobile device and even if they did the experience would pale in comparison to one on a high-performance built console. As long as quality developers take advantage of high performance silicon there will always be a market for consoles. Titanfall serves as the evidence of this point.

The Early Days of the Mobile Web

If you listen to mine and Benedict Evans podcast then you will know we talk a bit about the mobile web. Specifically, we call out the importance of the mobile web and how it is an experience that contrasts that of the desktop web. Everything is different because our context is different. Most of the time when we are browsing the desktop web we are sitting in a fixed location. Most of the time when we are using the mobile web or our mobile device in general, we are not fixed but mobile. Our mobile context is very different from our fixed context.

With that in mind, I still wonder if we are in the early days of the mobile web. The pew research tweeted out this photo that got me thinking:

BieUl6kCYAAVFDr.png-large

The tweet containing this image had the following caption: In 1996, this is what a cell phone with Internet capabilities looked like. Traveling down this rabbit hole, I went searching for screen shots of the early days of the desktop web. I came across this link with a chronology of time periods and the evolution web pages went through.

Here is Apple’s web page from 1997 for example.

Old-Apple-Website

All of this got me thinking. What stage of the mobile web are we in today? It seems as though we are out of the very early stages but are we even at the middle stages yet? What if we translate web pages into Apps? Are we still in the early days of apps?

We are in the process of connecting the unconnected. For the next billion people, the web will be fresh. Apps, browsing, media, it will all be brand new. We are moving into an area of explosive growth driven by consumers who never owned a personal computer, or even any electrical gadget of any kind before.

Ten years from now will we see similar links to the one on webpages I posted showing the evolution of apps from early stages to modern times? Absolutely we will. Device capabilities will evolve. Consumer needs will evolve. It will all change. What is intriguing to me is how fast it will all change. We can look at the time period of the evolution of the desktop web as being 25 years. The mobile web won’t take half that long to change twice as much. Playing in the mobile arena will be playing in the fast lane. It will all change and quickly.

Macs Everywhere

A little over a decade ago, I was still new in Industry Analyst circles. I was fresh out of the start-up scene to attend corporate analyst events and trade shows as an “analyst.” I noticed right away that I was frequently either the only one or one of only a few people in attendance at industry events using a Mac. Bringing a Mac to an analyst or industry event always gave me a sense of pride. I genuinely enjoyed using something that I believed was superior, but also that feeling that I was in the minority.

I used to enjoy getting the all too common question of “why do you use a Mac.” The question always seemed to be asked with a tone of inferiority or disdain implied. Then I would explain why I thought it was better and show some things it could do that Windows couldn’t. Or how I didn’t spend many hours a month troubleshooting computer issues any longer. I would explain that everything just “worked.”

I was not only in the minority at many of these analyst or media events, but I was often also the youngest person by a healthy gap. So it was always interesting that I sensed the disdain in the question was sometimes muted by my youth and perhaps perceived naivety. So I always felt compelled to include in my answer that I spent years in IT at a Fortune 500 semiconductor company. I always liked to add that I could troubleshoot Windows with the best of them, but now that I was on a Mac I didn’t have to worry about stuff like that any longer.

Since those times, things have changed. I know I live in the hustle and bustle of Silicon Valley, but I see Macs everywhere. Go to San Francisco, or Palo Alto, or most major hot spots where people take their PCs out in public to work, and you will notice more than just a few Macs. In fact, Windows users are in the minority it seems in many areas I observe. I know Macs are not the majority of the PC install base but casual observations in public and many corporate spaces would suggest otherwise. I am constantly surprised as I attend meetings or briefings with startups, enterprises, and other types of organizations, how many Macs I see being used.

Even in education the percentage of Macs is rising. When I first joined Creative Strategies late in 2000, I was tasked with doing research on the Gen x and Gen Y demographics to understand their needs, wants, and desires for technology. I would use my networks to go to high schools, and college campuses, to get a pulse of the youth. Around 2005, I observed a steady and consistent increase in the number of Macs I saw being used in classroom settings at colleges in particular. It was fascinating to watch.

That being said. Macs are certainly increasing annually as a percentage of the overall PC install base. With the trends in the PC market I am seeing, I still feel there is a growth story for the Mac ahead.

How Much Electronic Glass Do You Own?

I finally got around to a project I have been wanting to do for a while. I figured out how much sq ft of electronic glass is in use in my home. Benedict Evans loves to point out a stat from Corning on how much square ft of glass is shipped each year. Benedict tweeted out yesterday that estimates were that over 4b square feet of glass will be shipped in 2014. While I like the broad statistic of glass shipment estimates, I was struck with the question of whether we can break that estimate down to a forecast per person. So I decided to start with myself.

I measured, then did the maths, and figured out that I have just over 25 square ft of electronic glass in use in my home. If I were to tally up all the electronic glass from devices and gadgets not in use, it would be much higher. Now I fully recognize I am in the minority. There are 4 people in my household that is a little more than the US average, but I have way more than the average electronics in use. So I decided to include some “normals” in this experiment as well.

As I went to friends and families houses over the past few weeks, I tallied up their amount of electronic glass as well. In all, I surveyed 15 households. I was careful not to include people in the tech industry. Most of those I surveyed were in industries like education, police and fire, construction, and agriculture. It was interesting to see the mix of devices both of platforms and screen size in each household. After measuring and doing the maths, I came up with an average of 14.2 square feet of glass in actively being used in the 15 households I surveyed. That is likely even a bit high for the US average, but I’m guessing it’s fairly close given the mix of devices I saw in each household that maps with many of the device trends we have seen in the US for the past few years. In each house, the largest piece of electronic glass was obviously the TV. Each household also had more PCs than tablets, and every member owned a smartphone.

Clearly every area of the US will differ in this average. I’d bet the average in Silicon Valley or New York is different from the average of a rural area in Kentucky. Going further, the US average would be much higher than the average of China or India. While forecasting this would be extremely difficult, if not impossible, to accomplish. But I like living in the tension of the question. What will the average square ft of glass be per person, per household, per company, be in 2014? 2015? How about 2020?

We forecast specific devices and form factors. Sometimes we forecast screen size volumes, but rarely do we just look at square foot of glass in use per person. If it is “all just glass” then this seems like another dimension worth thinking about.

The Challenge Competing on Mobile

The mobile industry is one of the most fascinating and one of the most complicated markets to study. The mobile platform is without question THE key platform for many companies. It seems like not a month goes by that we don’t read reports of how much money a company is making in mobile. For every one company succeeding in mobile, there are countless others who are failing. Competing in mobile is a challenge. This challenge often gets overlooked. The biggest challenge for companies competing for mobile eyeballs is not as much in relation to other competitors, but it is in relation to time.

While the mobile screen is always with us, for many, it is not the only screen we look at and more to the point it is not the one we stare at for the longest periods of time. This is the advantage products like the PC and now the tablet has. While they may not be the most portable, they are the ones many look at for longer periods of time. There are certain consumers, like many in emerging markets, which are mobile only. The smartphone is the only screen they look at. However, due to the nature of the mobile device, even that screen time is still limited. The challenge for anyone competing in mobile is to grab a sliver of the time spent using a mobile device. This time is finite and currently dominated by a few competitors and tasks.

I find it helpful to frame my point as a pie chart. More data exists on US consumer smartphone behavior than in markets where smartphones are the only computers owned. I’d love more data like this on emerging markets but have not found reliable statistics yet. But for US consumers Harvard Business Review compiled some research and produced the following chart.

Screen Shot 2014-03-03 at 8.33.17 PM
A study was released middle of last year stating that Americans on average use their smartphones for 58 minutes a day. That has likely not changed too much so let’s use the assumption that American consumers use their smartphones for a grand total of an hour each day. Using HBR’s study as a baseline, then any social app is competing with other social apps for 11.4 minutes of time. Facebook would probably be the market share leader likely occupying anywhere from 8-10 minutes of that social time. Meaning a new entrant either needs to try and steal time from Facebook or is competing for a little over 1 min of possible time/share.

Competing in mobile is difficult. Consumers have developed habits. Those habits will tend to lean toward a few apps they use in certain situations or when they are in certain contexts. Just like market share statistics in any category, these certain apps have the market share of a consumer’s time. Competitors either need to steal time from dominant apps or get the owner to start dedicating more time to their smartphone usage.

The share of mobile time spent using a device creates challenges for competitors in every market. In western markets the best chance to compete is to not only target the smartphone with an app or service but to target all three, or four, screens a consumer may own or use. If a significant amount of daily compute time is spread across devices like a PC, tablet, smartphone, and even the PC, then a competitors best chance is to create experiences that span all those screens.

Similarly in emerging markets the challenge may be even greater because mobile is the dominant platform for now. Solutions don’t have the luxury of creating a service that spans many screens as they have to only target one–the main one–the smartphone. While mobile in emerging markets is competitive, it also favors a few key dominant players. I don’t see that changing any time soon.