Last week, Mary Meeker published her annual Internet Trends presentation (see embedded presentation below) and as I did last year I went through it to see which trends would most influence the social and mobile game ecosystem. Before highlighting the relevant trends she has identified, I went back and examined how prescient her analysis last year was.
Mary Meeker’s 2012 accuracy
Nobody’s predictions will be perfect, and I am not looking to punch holes in Meeker’s analysis. However, it is useful in looking at this year’s predictions to understand her past performance. The big thing that I noticed is that many of the trends she identified last year have not yet had a chance to play out … or even develop. Thus, many of her prediction this year may not have an immediate impact even if they prove eventually to be correct. If you pivot to leverage these trends too quickly, you may have a product before the market develops. Here is a look at the predictions from last year that I most focused on:
- She highlighted the importance of emerging markets. These markets are still emerging and still probably a great opportunity most revenue continues to come from the developed world.
- She mentioned how kids wanted a tablet or iPod touch over a game system. The failure of the Wii U and PS Vita showed she was on target.
- Meeker discussed how mobile traffic passed Internet traffic in India and that other countries will follow. We are seeing a continuation of this trend but it has not happened as quickly as she intimated.
- She identified how iPad growth had left iPhones and iPods in the dirt. We are seeing more companies take a tablet first strategy (Crowdstar just announced such a strategy) but smart phones remain a huge market.
- She highlighted the growth of mobile monetization (devices like Square). Although Square continues to do well, it has not changed the way payments are processed.
- She mentioned how user interfaces have gone from keyboards and mice to touchscreens and gestures. You are starting to see some PCs equipped with touch screens and tablets continue to replace laptops but not at the rate that you can say keyboards are being replaced by touchscreens.
- She noted how operating systems went from a Microsoft world to one dominated by Android and iOS. This trend has continued, with the failure of Windows 8 highlighting the diminishing importance of Windows.
- She commented on how note taking evolved from pen and paper to apps like Evernote. Although pens are definitely less common, I have not seen a commensurate pick up of note-taking apps.
- One of the trends she identified that I felt would have a great impact on the game industry was the ability to raise capital through crowd-funding. This trend is starting to have a profound impact on the game industry, as it is helping indie developers fund projects as well as providing an alternative for some big budget projects.
- Another favorite of mine from last year’s presentation is that product design would go from a secretive, in-house process to crowd-sourced, collaborative solutions. Although I still expect this to happen, you are still seeing most major design efforts handled the old-fashioned way.
- Finally, she identified the trend of education to massively multi-player online courses (MOOCs), a trend that is continuing but so far has not eaten into traditional education. Also, some are saying that MOOCs have devolved into the traditional model just using new technology.
And now for the future
Although Meeker’s predictions are not perfect and not always imminent; they do provide good insights into many key online trends. From her presentation last week, these are the ones that best grabbed my attention
- Emerging markets. Meeker makes the point that the growth in the number of Internet users is being driven by emerging markets. In fact, 14 of the 15 largest Internet markets (by users) are emerging markets.
- Opportunities with mobile advertising. She points to the delta between mobile usage and advertising and shows that there is a huge opportunity for growth. This growth in mobile advertising is an important revenue opportunity for mobile game companies.
- Content is being created and shared at an epic pace. The amount of digital content created and shared—from documents to pictures to tweets—grew ninefold in five years to nearly 2 zettabytes in 2011.
- Photo, video, sound and data sharing is ramping up quickly. One of the most important trends Meeker identifies is the growth the sharing of everything from mobile devices.
- In video, short-form and persistent is where the growth is.6 second videos are experiencing 2X month on month growth while more video is being uploaded to Dropcam than YouTube.
- Win-Win-Win sharing is growing quickly. The model of you help me, I help you, we help others, shown by apps like Yelp, Waze and Jawbone UP are seeing tremendous growth.
- Mobile traffic is increasing its share of global Internet traffic. Whereas last year mobile traffic represented a little over 10 percent of global Internet traffic; this number is expected to rise to about 20 percent by December 2013 and continue to increase at a rapid pace.
- Smartphone adoption will continue. Meeker sees tremendous upside for people to switch from traditional mobile phones (where there are over 5 billion users) to Smartphones (with a 1.5 billion installed base).
- The third cycle in computing is wearable devices. Meeker sees Smartphones and Tablets as the first two cycles in this computing cycle, with wearable/drivable/flyables/scannables as the next cycle. Wearable devices can make smartphones hands-free, environment aware, always on and connected.
- The wearable cycle will happen faster than previous cycles.While the previous cycles have lasted about ten years, Meeker sees this process accelerating for wearables.
- QR codes are a big part of scannable revolution. Meeker sees QR codes evolving from a novelty to a central part of the next computing wave. From product information to boarding passes and rewards, they can change the way we interact with retail. She points to a four-time year-over-year growth in China of QR codes scanned and that is shows how offline business are driving online connections. She also points to Tencent’s WeChat service, which has 400 million users, and connects consumers to businesses through QR codes.
- Technology has unleashed a new generation of entrepreneurs. Meeker points to the many passionate entrepreneurs and how they have been able to grow huge businesses based on technology trends.
Not all of these trends will materialize, and many will take more than a year, but Meeker’s analysis provides a great foundation to understand the dynamics of what is happening in the Internet space. For me, the trends you should start incorporating in your strategic plan are the opportunities with mobile advertising, the trend towards increased sharing of pictures/video/data and the move to short form video. Although I am still not sold on wearable devices and scannable items, Meeker makes a good case that they can transform our world and are thus worth monitoring closely.
I recommend you view Meeker’s presentation for yourself. Follow the link below: