Activate CEO Michael J. Wolf talks about upcoming video game wars and their impact on the metaverse

Michael J. Wolf. Photo courtesy of Michael J. Wolf

Activate CEO and Media Analyst Michael J. Wolf spoke to Digital Journal’s Markos Papadatos about the rise of the gaming industry and why platforms are on the verge of a war that will transform. our current ecosystem in digital hubs as we prepare to enter the metaverse.

What happens when technology, media and e-commerce collide?

Streaming wars.

Wolf is the co-founder and CEO of next-generation management consulting firm Activate Inc., which works with CEOs and leadership teams from leading tech, media, sports and entertainment companies to strategize , stimulate innovation and improve revenues. performance specifically in the media landscape.

As the tech and media landscape grows to $ 2.5 trillion over the next several years, Activate is at the digital forefront in helping customers take advantage of these growth opportunities.

Wolf, the former president and COO of MTV Networks founded Activate in 2010, which made a name for itself in its annual publication of the Activate Technology and Media Outlook, which provides the latest annual information on the state. technology, media and entertainment industries.

The company has released its seventh annual report, which focuses on the next era of gaming, the fight for the metaverse, superusers, cryptocurrency, NFTs, and e-commerce. According to the report, global spending on technology and media topped $ 2 trillion in 2021, and is expected to reach $ 2.5 trillion by 2025.

The COVID-19 pandemic has certainly boosted the popularity of the game, with a 29% increase in the time spent playing, according to Activate. Without a doubt, gaming continues to be the fastest growing industry and is expected to experience a CAGR of 8%, surpassing $ 220 billion over the next few years.

Despite continued supply chain delays and the shortage of semiconductor chips, consumers still want to keep playing, even if it’s not on the new Xbox-1 or PS5. It’s been over a year since the PS5 first launched, with consumers still struggling to get their hands on a unit, while Sony simultaneously struggles to get enough units to keep up with demand. .

Are game companies the strongest to survive the metaverse?

In our conversation, Wolf shared that instead of the hype surrounding the Metaverse, Activate is convinced that only game companies can be successful in the Metaverse as it currently stands.

“The only viable path to the metaverse is through gaming platforms,” Wolf added. “Anyone who bets on a Metaverse platform other than gambling is betting on the wrong horse. “

Valued at over $ 2 trillion, the total market value of cryptocurrencies continues to grow, with more Americans continuing to plunge their wallets into blockchain and NFT technologies, demonstrating how the game will continue to grow. ‘be a major driver of innovation and the proliferation of crypto and NFT.

Just look at impact games like Fortnite, Apex Legends, and Roblox – all of which have made the battle royale climate and virtual currency opportunities easier for users.

Not all players in the gaming economy are buying the hype, however. In October, Steam, the world’s largest gaming platform, quietly banned the use of blockchain games and NFTs on its platform, raising new questions about the ramifications of NFTs for video game companies.

War, good God, all of you!

Right now, we are seeing the industry shift away from selling individual games to offering subscription services on Google, Apple and Amazon, in hopes of competing with major gaming players including Microsoft. and Sony.

“Activate found that 58% of gamers use or intend to use gaming subscription services, while 38% use or intend to use cloud gaming services,” Wolf explained. .

This assessment can be evidenced by the increase in the number of virtual reality headsets sold this year and throughout the pandemic. The company further explained that spending on virtual reality and augmented reality games by U.S. consumers and businesses would increase eightfold by 2024, to $ 19.8 billion.

“We’re about to see the video game war,” Wolf said during the Wall Street Journal’s WSJ Tech Live virtual conference. Right now we’re going through streaming wars among and between the major players in the industry, including Netflix, Hulu, Apple, HBOMax, NBC’s Peacock and, of course, Disney +.

“Every big tech company recognizes that gaming is the next technology paradigm, where consumers will congregate, shop, and so on. We already enjoy many of these in-game activities, from concerts and weddings to college classes, ”Wolf told Digital Journal.

In 2019, Wolf told CNBC that Apple and Amazon would emerge victorious from these streaming wars due to their services being heavily dependent on many of their competitors.

And two years later, his assessment still seems true, adding that with Microsoft and Sony having virtually full game stacks, we can expect to see an increase in game mergers and acquisitions as others race to catch up. delay.

The bottom line is that consumers now have many choices and are finally exercising their rights to consume content how they want, where they want and when they want. “There are tradeoffs with every scenario, but the consumer is now in control, subscribing to multiple services simultaneously to create the package they want. “

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