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The gaming console turns 50, chip shortage set to persist while video streaming competition will intensify

Deloitte gazes into the tech Crystal ball

  • Games consoles reach 50th anniversary, with market value in SA set to reach R 876 million in 2023 
  • Chips will remain in short supply next year and some component lead times will stretch into 2023
  • At least 150 million paid subscriptions to streaming video-on-demand services (SVOD) will be cancelled worldwide, with churn rates of up to 30% per market
  • Wi-Fi 6 devices are quietly outselling 5G devices by a large margin, but Africa will lag the globe in their adoption
  • Wearable wellness — 320 million consumer health and wellness wearable devices will ship worldwide

 

Johannesburg, 10 February 2022--  The  gaming console turns 50 this year and is proving more popular than ever. Computer chips will remain in short supply this year into the next, although not as acutely as in 2021 and video subscription services will see 150 million subscriptions cancelled worldwide, representing a market churn of about 30%, as competition intensifies.

These are some of the findings in the Deloitte Global Technology, Media and Telecommunications(TMT) 2022 predictions, launched recently and released to media in Johannesburg today.

The report, now in its 21st year, also foresees an explosion in the adoption of wearable health technology and apps, shows why Africa will lag the globe in the adoption of the new generation of Wireless Fibre (Wifi) technology, Wifi 6, but also why the continent can lead the way in reducing emissions from smartphones.

“The report identifies which global TMT trends are most likely to impact businesses and consumers in the coming year. It also explores how many of these trends are currently being driven by economic and societal shifts brought on by the global pandemic,” says Mark Joseph, who is the TMT Leader for Deloitte Africa.

Gamers of the world unite, to celebrate

The games console ecosystem celebrates its 50th birthday in 2022 in strong health with record revenue, a full slate of latest generation devices, and a strong foundation for further growth. According to the Computer Museum of America, the Magnavox Odyssey is recognised as the first gaming console, released in September 1972.

Deloitte Global predicts that the console market will generate US$81 billion in 2022, up 10 percent from 2021. According to Statisa, the value of the gaming console market in South Africa is set to reach R 876 million in 2023, up from R 752 million ten years ago in 2013, after which the market peaked to R 800 million in 2015, then dipped. 

Revenue per console player, of whom there will be 900 million by the end of the year, is expected to average US$92 per person—substantially more than the projected US$23 per PC gamer and US$50 per mobile gamer.

Video streaming wars go global

Video streaming users will become spoilt for choice as video streaming companies expand globally and companies develop domestic streaming services. Users in South Africa already have access to the ubiquitous Netflix, as well as services such as Box Office and Showmax, offered through the Multichoice platform on DSTV.

Deloitte Global predicts that in 2022, at least 150 million paid subscriptions to streaming video-on-demand services (SVOD) will be cancelled worldwide, with churn rates of up to 30% per market.

Wi-fi 6 quietly taking over

Over the last two years, the world has seen the adoption of the next generation of wireless connectivity, Wi-fi 6, as a move from 5G. As a result, Wi-Fi 6 devices are now quietly outselling 5G devices by a large margin and will likely continue to do so for the next few years.

Deloitte Global predicts that more Wi-Fi 6 devices will ship in 2022 than 5G devices, to the tune of at least 2.5 billion Wi-Fi 6 devices versus roughly 1.5 billion 5G devices.

The reason for this is that Wi-Fi 6, just as much as 5G, has a significant role to play in the future of wireless connectivity—not just for consumers, but also for businesses. A key benefit of Wi-fi 6 is that it offers better connectivity speed, battery life and can host multiple devices and has improved latency.

Joseph notes that in Africa, Wi-fi 6 uptake is likely to be slower. This is because taking up Wi-fi 6 requires a hardware, not software, update through purchase of routers and compatible devices. These are now available in South Africa, although in limited supply.

Strong demand in wearable technology in health care

Advances in sensors and artificial intelligence (AI) are helping millions detect and manage chronic health conditions and mitigate serious illness, and these technologies are now small enough to be worn on a wrist or penny-sized patch and are seeing rapid growth.

Deloitte Global predicts that 320 million consumer health and wellness wearable devices will ship worldwide in 2022, and by 2024, that figure could reach 440 million units.

This is being driven by new offerings hitting the market and more health care providers becoming comfortable with using them. Their impact will increase even more if doctors trust their utility and people feel their data is secure.

With about 800 million people, or 11% of the global population, living with mental health conditions. There is an exponential increase in mental health apps, and Deloitte expects spending on these to reach $ 500 million this year.

Tech, regulation, and the environment

The explosion of Artificial intelligence (AI) is expected to lead to a parallel discussion on how it should be regulated including, in some instances, the outright banning of facial recognition in public spaces for example.

Consumers will also need to be more conscious of the impact of their tech consumption habits on the environment. Smartphones—the world’s most popular consumer electronics device which is expected to have an installed base of 4.5 billion in 2022—will generate 146 million tons of CO2 or equivalent emissions (CO2e) in 2022. While this is less than half a percent of global emissions, it is still worth trying to reduce. The bulk of these emissions (83%) are from the mining of minerals used in the manufacture of smartphones, shipping and first year usage of smartphones.

One way to reduce emissions would be to extend expected lifetime. For this to be viable, software and security updates should be available for at least five years. Devices should continue to be designed to be more resilient to falls and water exposure. There should also be incentives for phones to be traded in, and for there to be a thriving refurbished device market. All of these can make the African market for smartphones more attractive. 

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