Key takeaways for game companies from Mary Meeker’s 2018 Internet Trends

Mary Meeker recently released her 2018 Internet Trends (entire presentation below) and several of these trends are particularly important for gaming companies (both real money and social). For those of you not familiar with Meeker, she was formerly one of the top tech analysts on Wall Street and is now a leading VC (Venture Capitalist) with Kleiner Perkins. Her annual Internet Trends report has become required reading and although I hate predictions (they are about as accurate as your local weather man) she does a good job of identifying underlying developments that change the way business operates.

The trends that are most important to companies are:

Smartphone shipments are flat, the base is not growing, while growth in the number of Internet users has fallen to less than 5%. This fact means for game companies growth will come from increasing the amount of time existing people spend in games and, in particular, your games. It also means you need to monetize these existing users better.
Easy to use products are becoming pervasive, and Meeker points to Messaging (Telegram), Commerce (Square Cash) and Media (Spotify). This development is consistent with the growth of hypercasual in the game space.
Messaging (WhatsApp, WeChat, FB Messenger, etc.) is growing at an incredible rate. This trend suggests CRM, acquisition, support and games on messaging platforms will become incredibly important.
Voice technology is lifting off, suggesting voice will be an increasingly important element of games.
Personalization plus collective data is creating better consumer experiences. Game companies need to continue making experiences more personal for players without crossing over concerns about privacy. This can be done by keeping data cumulative, rather than personal.
Social media discovery is driving purchases. Discovery of products is expanding from Google and Amazon to Facebook and Instagram, which should reinforce their importance for game marketing.
In performance based marketing channels, competition for top placement has reduced ROIs and increased the importance of improving LTV.
Shopping and entertainment is converging, with one example people using YouTube before making a purchase. Game companies need to leverage this by making their games purchase ready on entertainment shopping destinations.
New retail, a phrase pioneered by Jack Ma, puts the right product in front of the right customers at the right time. This translates to how we should present in-app purchases in games, right package to the right player at the right time.
Data is an increasingly important driver of customer satisfaction. You should look to leverage this data so the player experience is tied to their interests.

All of these trends should be considered as your green light and grow your games. Rather than building for today, you should build for when you launch the product and years in the future when players will still be playing. I am sure there are other trends you may find useful and recommend you review the full presentation.

The Complete Mary Meeker Internet Trends 2018 presentation:

INTERNET-TRENDS-REPORT-2018

A review of Mary Meeker’s 2014 Internet Trends versus actuals

Last week, I summarized what I thought were the relevant points from Mary Meeker’s 2015 analysis of Internet Trends, which also made me want to go back and see how prescient her 2014 analysis turned out to be.

Mary Meeker

With any analyst, it is important to realize nobody can predict the future. If they could, they would be billionaires as they would themselves only invest in the next Apples and Facebooks, not the next Netscapes and MySpaces.

Below are some key trends she predicted last year and my take on how they have been applicable:

Internet usage is growing fastest in markets that are difficult to monetize. India remains a key focus for Meeker in her 2015 analysis but she is now most interested in China and India, rather than other emerging markets (Nigeria and Indonesia) while companies have shown an ability to monetize China (sometimes dwarfing their western competitors).
Smartphone growth is following the same pattern as Internet growth. That growth has continued.
Tablets are seeing great growth. I would say this was Meeker’s biggest miss, as she missed the growth of “phablets,” which both Apple and Samsung saw.
Mobile becomes an increasingly dominant form of web usage. Meeker was completely on target.
US operating systems dominate mobile phones worldwide. I would put this one as a maybe. They do right now but Xiaomi and other very formidable Chinese competitors are redefining mobile operating systems (though still based on Android, for the time being).
Mobile ad spend still has tremendous upside. This continues to be a theme for Meeker and I agree with her underlying logic.
App revenue is still the strongest mobile revenue source. Although not a theme this year, it continues to be true.
Cyber threats are intensifying. True, as the hack of the US government last week showed.
Tech venture financing is still depressed. I have not seen the latest data but seems to be rebounding with some companies getting great valuations.
Education may be at an inflection point. We have not seen the inflection point yet but the fundamentals remain that this industry will change dramatically.
Healthcare is another sector that may be at an inflection point. Like education, we have not yet seen the big changes here but it seems inevitable.
Messaging is an exciting space. If anything, this has become a more exciting space with bigger opportunities.
Image and video sharing rising quickly. Continues to grow, though video seems to have eclipsed photo sharing.
The dominance of apps is resulting in unbundling of the Internet. Not a theme in 2015, this trend largely continues.
Apps are re-imagining activities and businesses. Not as many apps have disrupted traditional businesses in the past 12 months but probably because the low hanging fruit was already disrupted.
Biggest re-imagining will be people with mobile devices and sensors uploading troves of findable and shareable data. I would classify this as a miss by Meeker, as this trend has not had a huge impact.
Sensor use rising rapidly. Again, this has not continued into 2015 and Meeker does not focus on it in her 2015 report.
Computing costs dropping dramatically. Probably a trend since 1985, enough said.
Compelling user interfaces are part of why many business are being re-imagined. Although I agree with her analysis, it was not a key part of the 2015 landscape.
Data mining and analytic tools that mine and organize data are growing rapidly. She does not discuss this in 2015 but possibly because it has become such an integral part of the business ecosystem it is no longer worth mentioning as a trend.
Apps are replacing television channels. Still happening but television has been incredibly resilient, though with Showtime following HBO this should continue as a long-term trend.
Social television boosts the impact of ads. We really have not seen this phenomenon at all.

When looking back at her analysis from 2014, I was personally surprised about how accurate her predictions were. While some are still playing out, her analysis proves very valuable in understanding how technology is evolving (and it is a heck of a lot better than my predictions).

What Mary Meeker’s Internet Trends 2015 Means to You

As always, super-analyst come venture capitalist Mary Meeker just published her Internet Trends for 2015, and, as always, I wanted to summarize the trends most relevant for those in the game and gaming industries (and for those who prefer Meeker’s actual analysis, her presentation is embedded at the bottom of this post).

I always find her analysis very interesting but you need to take anyone’s predictions with a grain of salt. After all, they are predictions of the future and very few are good at predicting the future (hence why I don’t try). Most analysts who try show why they are analysts and not trillionaires. Next week, I will look at Meeker’s 2014 predictions and see how they performed. Regardless, it is interesting to see what a leading thinker in the space sees as the major trends we are experiencing.

Below are the elements of Meeker’s analysis I consider critical for success:

Slide 6: Of the top 15 Internet companies in 1995, only Apple is still on the list. Thus, the companies we consider critical partners today may not be relevant in the future while new companies are likely to dominate.
Slide 14: Internet is becoming an increasingly large elements of peoples’ lives, with people now spending 5.6 hours/day on it (and 51% of that time from mobile devices).
Slide 16: Advertisers are still spending much more on print advertising versus mobile given the relative share of media consumption. Given that markets eventually find equilibrium, this figure suggests advertising revenue opportunities on mobile should grow sharply and there may be an opportunity for new mobile ad delivery mechanics.
Slides 23 and 24 show the importance of vertical (portrait) viewing (mobile phone format versus traditional television),having grown to 29 percent from 5 percent. This figure shows the importance of optimizing for both formats.
Slide 47: Six of the top-10 most used apps are messaging apps. Shows the importance of messaging to the gaming space.
Slide 52: Many people use different messaging apps for different purposes, not a winner takes it all market.
Slide 53: Mobile messaging apps may evolve into central communications hubs.
Slide 54: Notifications are evolving and are now allowing for direct interaction and are more up close and personal. CRM strategies must evolve to leverage this increasingly important interaction channel.
Slide 57-65 show the importance of user generated content, from Twitter to Twitch
Slide 88: One of the less positive slides, points to the growth and severity of Cyber Attacks. This slides shows how security will be important to all firms.
Slide 151: The size of the Chinese market is beyond what most people think. In one day, 1 billion “red envelopes” were sent on WeChat.
Slide 158: By taking less of a share than their US competitors, Taobao (versus eBay) and Meituan (versus Groupon) grew to more than twice the size than their competitors. This suggests that lowering the take rate can increase growth and profits.
Slide 165: India seems to be at an inflection point suggesting it may be the next China. It is already the third largest Internet market, with 232 million Internet users (and adding 63 million annually).

There are many other interesting areas of Meeker’s analysis, such as the growth in online platforms and marketplaces, but they are not as relevant (maybe) to my readers. I recommend, however, you take a look at the whole presentation:

What Mary Meeker’s Internet trends mean for the game industry

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

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. Continue reading →

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The Business of Social Media

How to succeed on mobile and social platforms by Lloyd Melnick

Internet trends

The Complete Mary Meeker Internet Trends 2018 presentation:

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Mary Meeker’s 2012 accuracy

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