Winners of forced digitization – the payback of the PC
In our previous article, we took a look at the significant economic indicators of the gaming industry, examined the relationship between the gaming industry and social media, and referred to the pressure of forced digitalization caused by the pandemic as an important catalyst for the IT sector to advance. The article concluded that a novel blend of gaming and community, like ANATA, the product of our portfolio company AYCode GmbH, so the social virtual reality could be a new segment of the game development sector with explosive growth.
The gaming industry is a good benchmark
The price of the major companies in the gaming industry listed on the stock market shows the importance of this sector. Shares of popular EA, Sony, Nintendo rose 30-60% in 2020, while other players in the gaming sector reached a doubling price from below (Game Workshop, AMD), and in exceptional cases, we saw an even bigger rally, such as for NVIDIA which nearly tripled its price in 2020.
NVIDIA’s share price has tripled in recent years.
The pandemic drove demands in the direction of desktops
To see the whole picture, we also need to look at the market of devices used for games. In the fourth quarter of 2020, 79.4 million desktops were sold worldwide, an increase of 10.7% compared to the same period the year before. Mobile phone sales fell 8.7% in 2020 compared to 2019, signifying 401 million device sales. Analyses show that a significant driver of these opposite movements is that consumers have more confidence in desktops than mobile phones as working and learning tools. Also, many households have categorized mobile phones as luxury spending, so they wanted to save on this purchase. However, based on sales numbers only, the share of mobile phones is further strengthening compared to desktops.
Besides, 160 million tablets were sold, an increase of 28% over the previous year, and laptops – also showing growth – sold approximately 220 million in 2020. There are 50 million XBOX One, about 112 million Play Station 4, and more than 60 million Nintendo Switches of the new generation consoles in households. Even prudent estimates suggest that the newest generation, in the Play Station 5 and XBOX Series X/S dominated console segment, is expected to sell at least 250 million pieces over the lifecycle of the new consoles.
The professional nature of forced digitization prefers big-screen
The forced digitalization and the explosion in the gaming industry have thus led to an increase in device sales and a partial overthrow of the “mobile-first” approach, as the unexpected turn caused by the pandemic has shown that users prefer large-screen devices over mobile phones when it comes to professional use (such as office work, learning, and education). We have covered the gaming industry’s growing sales in detail before. In this context, it may be enough to mention that the number of players has increased for all devices, as have sales, and most of the players were on the mobile platform in 2020.
Among the professional uses, it is worth mentioning web browsing, which we can measure in page downloads from each device. Data from 2016 to 2020 showed that the number of page downloads from desktops was head-to-head with mobile page downloads since 2016, but apart from a short period in 2018, we can observe a slight dominance of the mobile phone. The global data can be misleading since users in developed countries still download more pages from desktop computers. It suggests that the Chinese and Indian revolutionary transformation of society considerably distorts the world statistics, as the new classes can afford a cheaper device, but not two. All data shows that these devices are middle- to low-end smartphones. Looking at the entire database, we can tell that whoever can afford, is most likely to surf the World Wide Web on a big-screen device, usually on a desktop computer.
Online education as a virtual experience
In addition to the gaming industry, online education and communication are significant areas in virtual reality. By communication, we mean all kinds of social experiences in virtual reality, from simple messaging to the organization of a conference lasting several days. This kind of use of VR has come into the spotlight as CES, the world’s largest technology expo, was also available in a simulation that provided a gaming experience. Nearly 4000 participants could enjoy an average of 20 minutes in the virtual experience using virtual reality glasses. On the one hand, the number of participants is a great result – especially since the executives entering with the VR headset were very positive about the experience – but on the other hand based on the numbers of nearly 4500 exhibitors and 200.000 visitors of CES, maybe it was a mistake to use virtual reality glasses as an entry threshold.
To confirm the assumption with data, we can see that while just in 3 months 79.4 million PCs were being sold, 6.4 million virtual reality headsets have been sold throughout the year. According to estimates, this number could reach as many as 50 million by 2024, which is a great expectation. However, users today are playing on the platforms discussed in detail earlier.
How does ANATA offer more?
AYCode Gmbh set a low device-entry threshold for its social virtual reality platform, ANATA, since it does not require virtual reality glasses. In addition to entertainment, the platform also specialized in online education and communication. Because of these professional uses, it is optimized for big-screen devices, but it also tries to capture users’ attention with mobile applications that support the user experience even when they are not using their desktops. The software is developed in a VR-ready environment, meaning that it could be transformed in the future to be compatible with virtual reality glasses when the number of device owners justifies it.
The professionalism and market expertise of AYCode GmbH can be highlighted with the fact that the software development company had already determined the directions of development and specified the market it wanted to target before the pandemic.
In the next part of our article series, we will write in detail about the practical uses of virtual reality and the misconceptions about it, supported, of course, by data and statistics.
Why should you invest in 2021?
As we wrote in our previous post, the history of FOX / MIA showed us that we live in extraordinary times: To solve the economic crisis caused by the pandemic, states are providing money, loans, and subsidies to the economy so that it does not collapse. This money will be condensed primarily in the corporate sector. At what kind of companies?
- technological companies that are focusing on the new sectors,
- startup companies that can recognize new market niches and enter an area with their rapid adaptation,
- technological startup companies: the mix of the above mentioned,
- companies going public in the stock market that can show high value because of the above mentioned,
- large technology companies that are already listed, that can gather customers with their capital and brand.
Investors should now take advantage of the market’s changes, establishing their portfolio for 5-10 years!