The technology, media and telecommunications practise at Deloitte have published a raft of predictions for the sector for 2022 and beyond. The report highlights how worldwide trends in the industry may affect businesses and consumers.
By the start of 2022, Deloitte predicts there will be 900 million console players worldwide. Each will bring an average of €81 of revenue per gamer to the industry; comfortably more than the projected €29 per PC gamer and €44 per mobile gamer.
Overall, the company forecasts that console owners will have more than 200 million multiplayer and games subscriptions in 2022. By 2025, these subscriptions will likely generate more than €9.7 billion in revenue, up from €5.8 billion in 2020.
Daryl Hanberry, Partner and Head of the Technology, Media and Telecommunications Industry Group at Deloitte Ireland, said: “2022 marks the 50th birthday of the games console with the device now a veteran of the technology industry, outlasting camcorders and CD players, among others.
We saw usage of consoles spike during the lockdown, with many using their devices as a way to socialise when restrictions prevented people from meeting in person. Usage has remained high as, for many gamers, leaving the game may mean disconnecting from friends.”
Consumer Health and Wellness predictions
Deloitte predicts that 320 million consumer health and wellness wearable devices will ship worldwide in 2022, rising to 440 million units by 2024. This comes as consumers are increasingly using smartwatches and fitness trackers alongside smartphones to track their health and wellbeing. There is also an increased focus on mental health and wellbeing and it’s predicted that global spending on mobile mental health applications will reach close to €440 million in 2022.
According to Deloitte’s Digital Consumer Trends research published earlier this year, smartwatches saw the biggest increase in ownership out of any technology in Ireland in 2021: 24% have access to a smartwatch, up from 16% in 2020. Of those that own a smartwatch, 69% of people use them daily.
Suzanne McDonald, Head of Healthcare, Deloitte Ireland said: “The most common uses of wearable devices have been to help people get fit and beat their personal best or indeed compete with friends and colleagues on step count. But increasingly people are using these devices to monitor their health proactively, and the pandemic has accelerated that with 13% of those that own a smartwatch in Ireland using it to do so.
However, data privacy remains a hurdle so it’s critical that companies integrate cybersecurity into every aspect of their product and business line. As the usage of the devices continues to grow, we’ll likely see big investments in wearable device innovation in the few years ahead. As there is a particular focus on care in the community under the Sláintecare programme we can see multiple use cases for wearable devices in maintaining wellbeing and also in monitoring and managing a variety of health conditions.”
Deloitte emissions predictions
The company predicts that smartphones will generate 146 million tons of CO2 or equivalent emissions (CO2e) globally in 2022.
The bulk of these emissions, 83% of the total, will come from the manufacturing, shipping, and first-year usage of the 1.4 billion new smartphones forecast to be sold in 2022. Usage-related emissions from the other 3.1 billion smartphones in use during 2022 will generate an additional 11%, and the remainder will come from refurbishing existing smartphones (4%) and end-of-life processes (1%), including recycling.
Deloitte’s analysis highlights that the single biggest factor that could reduce a smartphone’s carbon footprint is to extend its expected lifetime, with consumers keeping their handsets for longer.
Laura Wadding, Partner Risk Advisory and Sustainability Market Lead, Deloitte Ireland, adds: “With sustainability now firmly on the boardroom agenda, businesses across all sectors are striving to understand the impact of their industry and products on their carbon footprint. The smartphone industry will need to balance product innovation with educating consumers on how best to recycle and prolong use of current and old devices.”
Deloitte predicts that in 2022 at least 150 million paid subscriptions to subscription video-on-demand services (SVOD) will be cancelled worldwide, with churn rates of up to 30% per market.
However, overall, more subscriptions will be added than cancelled as the average number of subscriptions per person will rise. In markets with the highest churn, many of those cancelling may resubscribe to a service that they had previously left.
Daryl Hanberry, Technology, Media & Telecommunications Industry Leader, Deloitte Ireland concludes: “Following blockbuster growth during the pandemic, the growth in new SVOD households is likely to slow across Ireland, the US and broader Europe. SVOD providers will use various plays to make their subscribers stay. They can team up with telcos to offer discounted bundles; they could offer additional types of content, from podcasts to mobile games; and they can release episodes of the most valued tentpole content weekly.”
VC Firms Investments
Deloitte predicts that VC firms globally will invest more than €5.2 billion in semiconductor start-up companies in 2022, more than three times larger than it was every year between 2000 and 2016, although a slight decrease on investments estimated to have been made into semiconductor start-ups in 2021 (€7 billion).
The company predicts that while the semiconductor shortage will endure throughout 2022, it will be less severe than in the last 16 months, and it will not affect all chips.
While in mid-2021, customers had been waiting between 20–52 weeks for multiple types of semiconductors, causing manufacturing delays or shutdowns, by the end of 2022 lead times will be closer to 10–20 weeks and to reach equilibrium by early 2023.
Peter Glynn, Partner Enterprise Technology and Performance, Deloitte Ireland said: “Rising demand for chips across almost every industry – from data centres to auto, to healthcare – has led to this lengthy chip shortage, which has been further exacerbated by the pandemic. However, the end is on the horizon, with fresh investment in manufacturing capacity from chipmakers and governments helping to meet demand by 2023. The EU also recently announced the European Chips Act setting out a new framework to help EU countries develop a strong semiconductor industry to promote a resilient supply chain. Irish companies have a real opportunity to seize the opportunity and be part of the global chip shortage solution.”
Women in the tech industry: Gaining ground, but facing new headwinds
Technology companies will continue to close the gender gap in the years ahead and Deloitte predicts that large global technology firms, on average, will reach nearly 33% overall female representation in their workforces in 2022, an increase of 2% in 2019. The proportion of women in technical roles will also move upwards to 25%, but still lags the overall proportion of women in tech companies.
Drawing on lessons from the pandemic, companies should embrace truly flexible working models, to expand the available pool of diverse talent as well as continue to invest in STEM education creating a pipeline of talent. While it may take many years of sustained effort, some companies are aiming to attract and retain women through initiatives like ‘returnship’ programmes, providing training and mentorship to women resuming their careers after a pause.
Caroline O’Driscoll, Technology, Media & Telecommunications Tax leader at Deloitte Ireland said: “While this progress is a step in the right direction, it is clear that we need to continue to invest in the STEM pipeline to ensure that the most diverse talent pool is available. Furthermore, tech companies need to continue to prioritise gender balance in the workplace. Identifying a responsible executive to commit to a holistic diversity, equity and inclusion strategy which is embedded in the business is essential to achieve gender equity, while also holding themselves accountable through metrics, results reporting and tracking progress. Only then can companies take stock of what is and isn’t working and make improvements.”
NFTs for sports media to generate more than €1.7 billion in transactions in 2022
Deloitte predicts that non-fungible tokens (NFTs), unique digital identifiers that use blockchain to record the ownership of an asset, will generate more than €1.7 billion in transactions for sports media in 2022, about double the value of NFT transactions for sports media in 2021.
The company also predicts that between four and five million sports fans globally will purchase or receive an NFT sports collectable as a gift in 2022.
Daryl Hanberry, Partner and Head of the Technology, Media and Telecommunications Industry Group at Deloitte Ireland, said: “The 2021–2022 season could be the first in which NFTs start to make a major mark from a revenue perspective and by 2023 it is likely that most major football leagues in Europe will have launched multiple NFT related products. Locally we’ve seen the GAA enter the world of NFTs just last week, becoming the first Irish sports brand or rights holder to issue crypto content. NFTs have added rarity to sporting moments and, in the future, every game of every season could generate a new matchday moment solely available to the highest bidder via an NFT.”
AI and managing sensitive data
Deloitte predicts that there will be a great deal of discussion around regulating artificial intelligence (AI) more systemically, with several proposals being made – although enacting them into enforced regulation will likely not happen until 2023 or beyond.
David Kinsella, Partner, Risk Advisory, Deloitte Ireland, said: “We’ve seen detailed proposals from the EU on the regulation of AI as the technology becomes even more affordable and available to companies. Some jurisdictions are even looking at banning facial recognition. There are a range of concerns with the technology from fairness and discrimination to privacy and control. However, there are huge opportunities with AI and the next two years will be instrumental in forging the future of the technology across industries as regulation sets to increase.”
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