Ten 2016 Predictions

10 Predictions

These are in no order of importance… < 365 days to see how right or wrong I am…

  1. Apple will reinvigorate ROI for its developers

Apple will use WWDC to start addressing issues concerning how iTunes works (or doesn’t) economically for developers. It will either be a smaller focus, that foreshadows more to come, or a big overhaul that’s been in the works for a while but not addressed due to wanting to get all their other platforms out so it could be addressed all at once.

A key element of this strategic invigoration of the App store will be the increasing shift toward the App store being a system where each product is compiled on-demand for the user’s device when ordered. Developers will increasingly be uploading entire repositories for their products, not finished single executables. Over-time this will take on more sophistication and will enable Apple to better improve more than just bandwidth issues around delivery of product.

A couple of late additions to this. First, Phil Schiller taking over the entirety of the App Store bodes well for this prediction. There is a need for better dialogue and pronounced action and hopefully this will help (WWDC will be key). Second, does Apple directly do more to help with advertising monetization (especially for AppleTV apps) that is increasingly a major area that helps developers monetize their work (see last prediction) and could still stand a lot of improvement if Apple cares to do more with iAd than it’s done thus far.

2. VR will be ‘big’ but won’t stave off the ‘indiepocalypse’

The VR craze will hit, and the press will be massive, but the experience will be short lived, and the opportunity for it to be a strong new market for indie developers will be pierced quickly.

3. Nintendo’s Hybrid Console is Last Shot in Hardware

Nintendo’s new console will be a major story not only because the company needs to right its ship, but because it likely becomes the first home console to be simultaneously portable.

Setting aside how this still competes in an age of mobile phones and tablets, this has potential to be disruptive in terms of the videogame market itself and it will be recognized as the last best-hope Nintendo has before it may have to make a life-changing decision to exit console hardware completely.

4. Draft Kings and Fan Duel will collapse in value

Due to increasing regulatory issues. Their last best hope may be winning major federal court cases. The stakes are enormous for these companies. The bigger issue, however, may not be that the cases change the definition of their product, but that the cases expose the one-sided nature of the business where 95% or more players lose $$ playing — turning away most players. It’s quite possible Draft Kings and Fan Duel will cease to exist in the next 24 months — or otherwise be acquired by large established gambling concerns at fractions of the value they once seemed headed toward.

5. Apple will enter the search engine business.

Apple already is making progress in doing so by integrating Siri and Safari directly with search results that bypass Google. Plain old search results currently sourced mostly from Google will essentially be a derivative move away for the tech-giant, made even more possible by an expanded partnership with DuckDuckGo, or an outright acquisition of the company. Google’s stock will take a hit which is exactly what Apple wants. The issue isn’t how much more $$ Apple makes by increasingly offering non-Google search capability, the question is how much does it hurt Google’s market-value.

6. Microsoft will slowly morph the Xbox into being a cloud-based system that runs over increasingly cheaper hardware.

Looking to make Xbox essentially a unified games business that is no longer about the hardware tied within a specific device that sits in a living room. Clamor will grow for Microsoft to exit the hardware business with XBox and the response will be to subsume it into the growing Surface Tablet business.

7. Microsoft or Google will buy Slack for an astronomical sum above its current unicorn valuation.

Slack has caught the tiger-by-the-tail and is creating an API for distributed teams within fluid organizations. It’s great stuff — especially if it becomes even bigger as a developer ecosystem.

The other option is for Salesforce to do it via a major merger. My money is on Microsoft but if I were Benioff I’d find a way to write the biggest check I could and then parlay that into dominating the next decade.

8. There will be a shakeout in the RFID toy business.

There are too many competitors. Nintendo’s Amiibo will continue to do well less as a game business, and more as proof that Nintendo has a major opportunity in the action figure business. Someone is going to eat a lot of inventory in this business — and my bet will be Lego.

9. Cable and Mobile companies will increasingly use data-caps not preferred bandwidth to compete.

Increasingly bandwidth will be free for certain, mostly streaming services, as a market differentiator that doesn’t violate net-neutrality since packets are not prioritized, but are discounted toward exceeding bandwidth caps. Given that only a handful of services actually make up the bulk of such caps, it will be interesting to see how it plays out and affects cord cutting, telco service providers, HBO vs. NetFlix vs. Hulu, etc.

10. As the Web fades as an advertising medium, in-app advertising will rise, because there is no way to block ads within individual apps.

eCPMs will rise, and increasingly advertising in games, let alone corporations producing ever-more entertainment directly, will continue to transform the games business. At the same time, mobile-social mindshare, and where people spend their down-time online will increasingly not be a game A vs. game B issue and instead be seen as Facebook vs. Games, Netflix vs. Games. I would not be shocked to eventually see Netflix attempt to create integrated games and series for kids.

This form of advertising is big for games, because despite no-one loving it, it feels more in-place for games than for utilitarian applications like photo-sharing. As such games will increasingly gain major favor for branded digital advertising. Right not eCPMs are dominated by whale-searching mobile games, but eventually this will give way to much bigger advertising markets like cars, and movies.

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