“It follows that the goal of forecasting is not to see what’s coming. It is to advance the interests of the forecaster and the forecaster’s tribe.”
PHILIP TETLOCK, SUPERFORECASTING: THE ART AND SCIENCE OF PREDICTION
Covid-19 accelerated the adoption of entertainment tech, gaming and commerce. But are these trends here to stay?
2020… where to start? If you look at the prediction lists of 2020, none (or at least very few), would have foreseen the chain reaction of Covid-19 to both enterprise and consumer trends. The move to remote work forced quick adoption of cloud technology and tools that were once having difficulties selling to large corporates, saw explosive growth – from Zoom to Hopin, new unicorns were born in record time.
I also believe that there was a fundamental change in consumer behaviour. From how we shop, exercise, connect with friends, get help, etc. Streaming, gaming, ecommerce increased adoption rapidly, advancing 10 years in the space of a few months.
Looking ahead at 2021, with vaccines being rolled out (slowly) in the developed world, it feels like we have a grip on what the year ahead might look like – the new normal. As a fan of prediction lists, I collected a number of interesting reports and expert forecasts for 2021 in the spaces we cover at Remagine Ventures. These include consumer trends, gaming, entertainment tech, sports and commerce.
GAMING
Covid-19 was a huge boost for gaming and usage has grown to new records. According to the Economist, video game internet traffic, including mobile games, has increased 75% in the U.S.
- In Newzoo’s latest report, analysts predicted that in 2021, 2.8 billion gamers worldwide will help the global games market generate revenues of $189.3 billion (up from $175 billion in 2020) but not sustaining the 20% growth experienced in the pandemic. Fortnite alone made $1.8 billion in revenue last year.
- Cloud gaming goes mainstream – Yearly cloud gaming revenues will exceed $1 billion for the first time in 2021 – Google’s Stadia, Amazon’s Luna, Microsoft’s Project Xcloud, are just the beginning. Consoles are not going away, but expect a lot of bundling. According to Gamesbeat, the streaming wars will spill over to the cloud gaming wars, with media companies, streaming companies and telcos looking to include gaming packages in their offerings.
- Game streaming continues to grow in 2021 – According to StreamElements 2020 year in review, game streaming broke new records in 2020. 1.7 billion hours were watched on Twitch in December 2020 alone (17B total in 2020, oor 83% growth YoY). Facebook gaming closed the year with a record 388M hours watched in December alone (a growth of 166% YoY). The ‘Just Chatting’ category remains the most popular on Twitch, and lockdown measures led to concerts, political events, as well as live shows all being hosted on the platform.
- Gaming is the new social. According to Accenture’s Fjord Trends 2021: “There is significant experimentation happening around gaming platforms, social platforms and mixed reality environments. We’ve seen a 47% rise in use of Discord, a platform for clubs, gamers, artists and groups of friends spending time together”
- Game IPOs will continue and change the game industry – several experts including Dean Takahashi at Gamesbeat and Mike Vorhouse predict that the rumoured IPOs for Roblox, Epic and Discord will be some of the most exciting in 2021 and fuel further investment into gaming.
- Gamestop stock becomes more valuable than Google :-) Just kidding.
(Disclaimer: we’re investors in Novos, the training tool for Fortnite and Madskil, an engagement layer on top of gaming streams)
Virtual Worlds and the Metaverse
*Caution – there’s a lot of hype here!
- According to Ark Invest’s research, revenue from virtual worlds will compound 17% annually from roughly $180 billion today to $390 billion by 2025.
- We’re excited about the Metaverse at Remagine Ventures and the potential it has to bring people together. The Metaverse will be an online world (or several) where people go to play games but also meet and hang out with their friends. At the moment, the closest company to delivery on that promise is Epic Games, but 2021 will be an important year to advance that vision. As mentioned in Liontree’s annual letter: “Over time, marquee platforms like Fortnite could become this new internet – where we spend our digital time, interacting with others and where concerts, films, new TV series premiere and even dating.”
- Let’s meet in the virtual world – Even as IRL events return, expect these virtual destinations to continue as a way to make events more accessible to a global audience, according to Ketchum. From virtual concerts to conferences, art installations and shopping events… this is the beginning of the metaverse.
audio
- Audio advertising matures – In Carat Trends 2021 the media agency expects there to be a significant increase in audio advertising as both brands and platforms realise its value and power. YouTube has just announced audio-only advertising as an option on YouTube in recognition of the number of people who use it to listen and not watch (both music and speech-based content)
- “The ear remains undervalued”, says Liontree’s Aryeh Bourkoff in his end of year letter. Audio will be a key component of the next wave of content and consumption, and it is set to continue to grow. Companies like iHeartMedia, SiriusXM, and Spotify are investing in and leading the evolution of audio, focused on music streaming (on-demand and lean-back modalities), podcasting and content production.
Mobile
- The State of Mobile 2021 report by App Annie goes in-depth into the consumer trends in mobile. Mobile adoption boomed in 2020 – $143 Billion Consumer Spend, 3.5 Trillion Hours, 218 Billion Downloads – demand for new apps and games still grows globally, up 7% YoY.
- The “creator economy” will prosper in 2021. This is not limited to mobile, but an array of new tools and platforms will enable more professionals, semi-pros, and amateurs to make successful apps, games, or other software using creator tools from companies like Unity, AppOnboard/Buildbox, Overwolf, Roblox, Manticore, as well as TikTok, Triller, YouTube, Snap and the many video-centric digital platforms, according to Vorhaus Advisors. See previous coverage on the rise of the creator economy on VC Cafe.
- The big App Store antitrust lawsuits will continue into 2021. First it was Fortnite and Epic, now it’s Facebook and soon other players will team up to reduce the revenue share with app stores. This may also trickle down to Google and Amazon. The Information and VentureBeat have more on this.
(Disclaimer: we have three portfolio companies in the consumer mobile space, still in stealth).
social media
In 2021, optimism on investing in social media has returned. It’s enough to see the rapid adoption of new social platforms from Signal in messaging to Clubhouse’s $1 billion valuation in less than a year. Read A16Z’s social strikes back series to get a feel of just how much movement is in this space. Products that were previously not inherently social, will embrace community, stories and sharing to increase stickiness and drive revenue.
- In US Social Tends for 2021, an eMarketer report claims that the all social media in 2021 is pointing to one direction – video.
- Facebook, Instagram, TikTok and Snap start to deliver on the promise of social commerce. As part of this, Vogue says we will see more influencers turning into retailers – either by selling their own merch or driving sales for brands.
- Social commerce is a thing – Over 76M people in the US will make a purchase via a social network at least once this year (38.4% of US social network users) according to Falcon.io’s 2021 digital marketing trends.
Immersive ar/vr/xr
- Adoption of mobile AR is growing, but the industry is still waiting for its iPhone moment for mass adoption. Will Apple come out with their smart glasses in 2021? that is the question. Meanwhile Oculus Quest 2 drove 156% growth in Facebook’s non advertising revenue and is on track to be the first mainstream VR headset.
- Carat predicts that 2021 will be the year of the camera and more immersive experiences will be made possible thanks to smart glasses “the evolution of the camera is likely to accelerate, as we are expecting a new generation of smart glasses from Facebook, Google, Apple, and others. Instead of having to open up a phone to activate AR and QR codes, the smart glasses will automatically take the wearer into the experience, making the process even simpler and friction-free”
- Escapism will drive the adoption of immersive experiences, according to Forrester’s 2021 predictions: “Extended reality, which includes augmented, mixed, and virtual reality technologies, will enable this trend: As of Q4 2019, 36% of US consumers had trialed augmented or virtual reality. In 2021, we predict that another 10% to 12% of US consumers will experiment with the technology, expanding overall exposure to just short of half the US online adult population“
- Investment in AR will continue to grow – Companies such as Snapchat, Facebook, and Apple have increased their investment in augmented $120 reality, encouraging widespread use of AR tools on mobile devices. Ark Invest forecasts that by 2030 the AR market could scale from under a $1 billion today to $130 billion.
(Disclaimer: Remagine Ventures is an investor in EchoAR, a backend as a service for 3D content in the cloud, and Zoog.ai, a storytelling platform)
sports
- Virtual sports -The blurring of esports and traditional sports looks set to continue as the virtual increasingly merges with real-life experiences. From Zwift’s virtual tour de France to Aston Martin’s AMR-C01 racing simulator, at-home amateur athletes will increasingly be able to compete against top-level professionals, according to the Future 100: 2021 by Wunderman.
- Esports leagues and teams will continue expanding their technological innovations and engaging new audiences hungry to watch pro-level competition. Not only that, but the collaboration between athletes and gaming further blurring the lines between the two worlds, there will be even more opportunities for brands to create partnerships at the cross-section of traditional sports and gaming, according to the sports marketing team at Ketchum.
- eBikes and escooters everywhere – Bicycle shops are seeing unprecedented levels of demand as people trade public transit for cycling in new pop-up bike lanes, and e-bike shares are filling the roads further, as pointed out in Facebook’s 2021
(Disclosure: we are investors in Minute Media, the leading voice of the fan across various categories)
Media
- In a world without cookies, we’ll see smart alternatives to targeting that avoid cookies altogether: contextual targeting, time-based targeting, and using syndicated and custom audiences, according to the 2021 media trends and predictions by Kantar.
- Fight fake news, but embrace synthetic media – Disinformation becomes the most important story of the year, according to John Battelle. How the content moderation happens, still remains a huge challenge the platforms have yet to solve. On the flip side, there’s a narrative that has yet to be properly told about the potential of synthetic media companies to create high quality content at scale and at a fraction of the price. (Disclaimer: Remagine Ventures is an investor in HourOne.ai, a platform for synthetic video creation, based on real human characters)
ecommerce
- In Adobe’s 7 consumer trends that will define the digital economy in 2021 the top trend has to do with the growth of online commerce. Data from Adobe found that consumers spent a whopping $34.4 billion during Cyber Week, which represents a 20.7 percent year-over-year (YoY) increase. Social is a big driver for commerce.
- Shopateinment – Shopping will become a top priority for social media companies – from TikTok to Facebook and Snap – video will be a big driver for product discovery, as Andreessen Horowitz partner Connie Chan points out.
- Video + shopping is also highlighted in Global Web Index 2021 consumer trends report:
“The explosive growth of TikTok, the rise of influencers, and the need for brands to distinguish themselves online. Three trends that will converge in the world of “livestreaming commerce”. Already popular in China, livestreaming commerce will be a new battleground for retailers and may bring community and entertainment to online shopping – elements it currently lacks“.
(Disclaimer: we’re investors in Syte.ai, the visual search/image recognition tool for commerce).
It’s hard to make predictions about the future. Just take a look at similar lists from 2019, trying to predict what was going to happen in 2020… but regardless of the crystal ball, 2021 is already looking like an exciting year in Entertainment tech, gaming and commerce. I’m excited to back the founders that are building the future in this space.
Co Founder and Managing Partner at Remagine Ventures
Eze is managing partner of Remagine Ventures, a seed fund investing in ambitious founders at the intersection of tech, entertainment, gaming and commerce with a spotlight on Israel.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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