Predictions for 2011

At almost three weeks into the new year, I suppose its getting on the late side for "2011 predictions" posts. That said, I'd made some notes to author such a post, and the recent CES trip I did helped crystallize this thinking.

I think these types of posts are healthy to do for two reasons. The first is humility. I'll surely be wrong on a number of these and so when I look back on them in early 2012, I can be reminded of just how off base I was (and thus generally am!). Secondly these assertions can start conversations. Ones in which I hope you, esteemed reader, will partake.

Lets first dispense with the usual stuff you are hearing around the internet: There will be lots of smartphones (duh), tablets will take over everything (they won't, but they'll be a big category), TVs will get thinner (would they get thicker?), etc. A lot of these things you can take for granted as true or false, either believing vendor claims or not. The more interesting things come in thinking about implications and general trends that result thereof.

So that said, here are a few that come to mind.

1. "Bespoke Design" and "Devices of Emotional Attachment"

For years now, the PC industry has wondered why it is that its machines can't hold a candle to Apple's when it comes to design. I think that the consumer electronics industry as a whole has come to terms with this. In the past few years they have been copying Apple (e.g. remember when everything went "white plastic"?), but this isn't the answer. The answer is in designing things that people care about. Either because they embody something they stand for, allow them to state their place in a tribe, or recall an era for which they have affection. Examples include Google's Chrome laptop (logo-free minimalist bespoke look), Fuji's retro looking camera, or similar examples from Leica or Olympus. Combine this with things like falling manufacturing costs and a premium that people will pay for this kind of design, and there's opportunity for many small hardware niches (e.g. laptop vendor that does build-to-order chassis based on custom materials).

2. "Appstore Fatigue" and the coming competition over connected commerce

(This is a big one on which I'll do a lengthier post in the coming weeks)

In a quick - by no means comprehensive - survey of products at CES, I counted no less than twenty "appstores" across a variety of phones, tablets, PCs, Netbooks, TVs and settop boxes. With the improved capabilities that apps bring to devices, and of course the revenue stream it brings to the vendors, it's not surprising that so many device vendors are doing just this. However, I believe it's unsustainable at current rate/scale. It will have fallout in a number of ways:

• “AppStore Fatigue”: Consumers are not likely to trust (or want to bother) maintaining an ongoing commercial relationship with every device they own, though it appears that every device is going to ask for one. Consumers are going to forgo some in favor of others. Those appstores that fail to resonate with users are going to become ghost towns of sorts. Users being assaulted with yet-another-appstore will suffer ‘AppStore Fatigue’, not wanting to fire up yet another appstore credit-card entry. Those launching appstores will have to think about how to incite that customer in the door. I’d imagine we’ll see lots of “Comes bundled with $50 worth of AppStoreBux” types of offers. Similarly, developers will be faced with a huge choice of channels. Even with lightweight click-to-accept agreements, most will not have the bandwidth to launch on every service and customize for services/devices. This is playing out exactly as the PC Download Casual market did in 05-06 when I worked at MS. As it did then, it will lead to lowest-common-denominator development, a rise of distributor/aggregators, and developer focus on the 1-2 leading platforms leaving others to wither.
• "Competition over Connected Commerce". Again, I'll address this in longer post, but the short version is this: A large part of determining who will win here will be dependant on which vendor walks the line best between (a) giving developers tools to innovate in commerce (light up new business models, create new pricing models, develop external direct commercial relationships with customers) and (b) presenting the end user with something that they can still understand, navigate, and trust. Consider that developers on the AppStore are lighting up new hybrid business models daily or weekly, while Xbox took several *YEARS* to light up a F2P/item-sales model in ONE game. This is going to be the front on which the most exciting innovation is going to take place.

3. Stereo 3D will reach a point of "undeniable lack of success"

Fall 2010 didn't see the furious adoption of Stereo3D that the more bullish were predicting. At CES this year, plenty of vendors were still hawking it, but (a) with less enthusiasm, and (b) as only one of several things they were showing, not the main attraction. My belief is that by end of year, it will be evident that Stereo3D is a niche at best, and likely a small one at that. Vendors will blame the glasses, but this is a red herring. The real issues are more fundamental, and I beleive insurmountable:

• There are fundamental physiological issues with Stereo3D at close distances that make it fatiguing at close distances. This isn't an issue in the cinema where the focal and convergence points are near-identical but becomes and issue at close range. Headmounted displays are extremely uncomfortable. TVs and PCs for extended periods, YMMV.
• Authoring 3D Content costs money. The model Hollyowod is pushing is predicated on a long-term-sustained premium over the whole content waterfall. While theater goers are paying the premium for ticket prices, it's not at the level they'd like and it's not clear that cable, blue- ray, etc, will be able to command a premium at the same level.

The two things that Stereo3D has in its corner are home-theater enthusiasts and sports (gaming enthusiasts are mice nuts in comparison) . I'm not in the camp that beleives these two niches are enough to evade a collapse, but who knows.

4. 3D printing, on the other hand, is about to take off

Several sub-$2k printers, several startup services allowing printing of your own designs (Ponoko, Shapeways, Figureprints) or offer boutique products for sale. Feels on the cusp of something big, though what exactly I'm not sure. Print your own board game pieces? design your own jewelery? Maybe Alice will figure it out for us! There's certainly some overlap with #5:

5. Gaming's Virtual & physical worlds meet

There were a number of toy manufacturers around CES this year, and some of them are doing interesting work in melding physical toys/games with the virtual. There was of course a first step in this direction with toys like WebKinz, BarbieGirls, and BuildABear, but this was only a commercial link, using physical toy as proxy/token for the games cost of entry. What we are seeing now are things like Mattel’s Rock’em Sock’em robots having a complimentary augmented reality game, SphereO a remote controlled robot ball that you drive via smartphone; and ARDrone, a remote controlled helicopter that you pilot with your iphone while simultaneously playing augmented reality games (e.g. 2 real-world copters, but the ‘bullets’ and ‘rockets’ are in virtual space). Also, I got a chance to play Sifteo, a tactile game platform made up of physical cubes that react to how to you move/tilt/connect them. I think all of these are indications of an interesting trend melding the virtual and real worlds. The uber-smart Frank Lantz once said “we think of games as something you put into computers, but this is wrong. Computers are something we put into games”. I think this captures the essense of this trend – that we’re finding ways for technology to pervade and enhance all aspects of play, on and off the screen (which includes things like Nike+, etc)

6. Apple has a gaming platform.

Well, they have two of course. The iPad and the iPhone. What I mean though, is that this posturing (part BS'ing, part wishful thinking) from game console manufacturers about iPhone not really competing with the DS/PSP (it does) and iPad not competing with high-end consoles (they do for share of wallet) is no longer going to fly. Market data will emerge that proves that Apple's platforms are taking gamer money out of the pocket of traditional game platform manufacturers.

7. The Post-PC-Era will officially arrive.

Classify it how you will; Smartphone & tablet growth outpacing PCs, or more people connecting to the Internet on non-PC devices, or any other metric, it will be clear that it's no longer a PC world. This will have all kinds of implications for people developing games content. HTML5 (and

related tech that often is thrown into that bucket) will become increasingly important, cross-platform services will become attractive for gamers, and we'll see the emergence of #8

8. Brands-as-Memes.

This proliferation of app-enabled platforms will lead, I think, to another interesting phenomena. It will be hard and expensive for large-budget games, outside of their core market, to get onto enough platforms to rise above the noise of the collective conciousness. On the other hand, smaller titles, being able to appear across iPhone, iPad, Facebook, consoles and PC, will - when they 'hit' - spread across the cultural landscape like wildfire. Red Dead Redemption made tons of cash, but its got to be a little bit frustrating to work on a $100M AAA blockbuster thats supposed to be the biggest thing in gaming, only to turn on the TV and see that everything from SNL skits to Jay Leno monologues are talking about Farmville and Angry Birds. When Angry Birds gets this level of virality, its no longer just a brand, it's a meme.

9. E-reader apps & services will see an explosion of innovation

The first wave of e-reader devices, apps and services have been too focused (a) on improving their supply chain and costs, and (b) too focused on emulating paper, not on surpassing it. The device war is going to be waged on a number of fronts (Kindle will stick e-ink, but they'd better add a touch interface), but for 2011 its going to be Kindle loyalists and the iPad juggernaut, with some niche-serving tablets in peleton further back. On the software front though, there is room for a ton of innovation. Trying win customers over, people will build social networks or latch onto existing ones, and then layer on features for book clubs, shared annotations, circle-of-trust recommendations, book lending/sharing, gifting, treasure-hunt games, and of course acheivement systems. Lots of magazines and newspapers trying their hand at different interpretations of what their content should look and function like on digital platforms. HTML5 will make it easier and cheaper to produce high quality typography and layout and to make it portable. There's also a ton of work to do to make text more readable on screens.

It took us a few thousand years to get paper to where it is today. YOu didn't think we were done with e-readers upon reaching the iPad, did you?

Some people to watch in this space: Craig Mod, James Bridle, Bill Hill, Copia (who have the right idea, and whose feature set will likely be copied by Amazon and/or Apple)

10. Cracks in gaming's walled gardens.

Consoles are walled gardens. Platforms like Apple's are as well, but less so. As I wrote about a while back, as consoles are tempted - or demanded by their partners or customers - to reach out into the broader Internet to leverage the benefits of other services and platforms, they'll start to lose some degree of control on their platforms. The recent Steam/PS3 headline is a prime example.

And now, FIVE more bonus predictions!

11. HTML5 begets real apps: Real, viable competitors to Office, Visio, Photoshop, etc, etc.

12. Android consolidation. Such a mess right now there has to be some consolidation in device UI and form and application distribution or the app landscape will be bleak.

13. Games market analysts will struggle to segment an amorphous landscape. They used to segment handheld differently than phones, differently than console, retail vs digital, etc. Things like iPad blur all those lines. It'll be hard to make sense of the market.

14. No 'official' Kinect for PC. Some are predicting it. I just don't see it happening. It was so hard to bring Live to the PC, and not particularly successful, that I can't see them overcoming all the calibration/usage issues, nor the high demand for it materializing.

15. Tablets as producer platform: People are framing tablets as 'consumption-only' devices because largely today they are. However, people will innovate on the platform and turn them into production/editing platforms, and we'll see them take off for real in many niches as PC replacements, not compliments.

That's it! Let loose the commentary on this broad-reaching food for thought!