Predictions for 2021 (and 2020 grades)

Last year, I registered a bunch of predictions about the gaming industry to try to test my knowledge of the space. It’s been one heck of a year, and certainly COVID-19 impacted both gaming and the wider world in a lot of profound ways. But at the same time, things continued moving in largely the same directions, with the biggest changes taking the form of speed and scale of various projects. Before I get into my new predictions for 2021, let’s see how I did:

PredictionConfidenceScore
There is no technology in the world capable of translating the language you are speaking in under 100ms during a live call.90%Correct
No social media tool with a userbase at the size of Instagram, Snap, Facebook, etc today releases an automatic-deepfake-alert feature which alerts those browsing the content (rather than just flagging uploads for a moderator to examine).80%Correct
Total XR revenues will still be less than 25% of PC game revenues alone (as measured by SuperData’s year-end report.)80%Final report not out, but most recent report shows $6.7B in XR revenue, still less than 25% of ~$37B total revenue
At least two organizations outside Google will announce Stadia competitors. Whether or not this happens, I further predict that none of them, including Stadia, reach player bases which are meaningfully competitive with the big console names.70% first sentence, 60% the secondCorrect on both fronts (Facebook, Microsoft, and Amazon all announced game streaming tools)
Multiple released games will appear as viable candidates for an eventual online “omniverse” – somewhat akin to Ready Player One’s OASIS, though significantly narrower in scope and technical viability to start.70%Meh – Roblox, Fortnite, Core, and others are definite candidates here, but none except Core really was close to new this year
Other than voice skins, some 50M+ MAU games release significant new features which are tailored to encourage players to participate in the game’s voice chat.70%Phasmophobia might have been the most unique game in this regard I encountered, but their userbase is only 3M or so. So I’ll mark myself wrong here.
Free-to-play game revenues increase by 5% or more over 2019’s totals60%Oh geez yes. COVID-19 sealed the deal here.
A single text-to-speech platform takes off, finding adoption with greater than 5% of game developers for at least some NPC voices in game.50%Nope
Investors who currently label themselves “AI-focused” will split into a couple different camps, drawing lines between “big data predictions/analysis” vs “automating tasks” vs “building creative tools”, among other things. We’ll see this trend in the evolving vocabulary used by funds and companies moreso than through anyone explicitly rebranding themselves.50%Hard to measure this one, but I’d say no – I don’t think the language used by investors here has changed too much over the last year

Overall, I got my high-confidence estimations, and missed a decent portion of my less confident ones. My Brier Score overall here is 0.198, which is certainly better than chance but probably not industry-master either. (For comparison, had I gotten all of my predictions correct at the given confidence intervals, my Brier Score would have been 0.118, and if I was all wrong, 0.478.) I was a bit underconfident on some of my higher-probability estimates, and perhaps a bit overconfident about the pace of change in the industry at some of my less certain predictions.

Which leads us to 2021. As COVID hopefully begins to calm down, I expect quite a bit will be evolving over the course of the year. Below are a bunch of new predictions, taking inspiration from predictions I made last year as well as ideas from the predictions of other industry leaders, though I’ll generally modify the prediction to ensure it’s measurable.

PredictionConfidenceDiscussion
There is no technology in the world capable of translating the language you are speaking in under 100ms during a live call.90%I’m still intensely skeptical this is possible at all, but if it is, it’s definitely not coming soon.
No social media tool with a userbase at the size of Instagram, Snap, Facebook, etc today releases an automatic-deepfake-alert feature which alerts those browsing the content (rather than just flagging uploads for a moderator to examine).80%If it didn’t happen in the year of a major US election, I don’t expect the pressure to really amp up again in the immediate future here, especially for something that risks changing the user experience.
Total XR revenues will still be less than 25% of PC game revenues alone (as measured by SuperData’s year-end report.)70%We still don’t have the hardware in place. Some apps like Spatial are starting to emerge which truly do utilize VR to help with some of the problems caused by COVID, but we’re still too early for anything close to mass adoption.
Stadia will be the largest standalone (aka uncoupled to a local console) game streaming service60%They have a head start, experience with streaming live content, and ecosystems through things like Youtube to exploit. Amazon and Facebook don’t have the same skillset, and Microsoft or Sony are going to bundle their streaming options to consoles as much as possible.
Game streaming services will account for less than 5% of total revenue in the industry80%I’m still not optimistic about streaming, but even if I were, this year will be about loss leading to drive adoption. Expect lots of free trials and bundle deals to get users experimenting with the system, but none of the loyalty the best consoles enjoy with their users.
At least one service will emerge with combined video streaming and game streaming…70%This is a natural fit for a huge number of reasons…the only reason my confidence isn’t higher is because I’m not sure how long it will take for Netflix (or perhaps more likely Amazon Prime Video + Twitch) to adapt and incorporate these tools.
…and will acquire over 10M users80% (contingent on above)Assuming they actually pull this off, especially in the time of COVID, even a pretty low-quality game library will draw a ton of early attention. Revenue is a harder question, but I have little doubt a service like this would be used heavily.
Two games which both have over $100m in-game annual revenue individually will announce the ability to genuinely move your character between the two games while retaining substanceful elements like attire and even powers…30%This is a big part of the eventual idea of the metaverse. I think a few gaming execs are starting to convince themselves why it might make sense to go in this direction – more permanent online identities for players could be a HUGE driver of both revenue (cosmetics) and loyalty – but overall the industry isn’t quite ready to take the leap. Some platforms like Core or even arguably Roblox exist to allow this on-platform, but I’m looking for identities and games to completely decouple.
…and those two games will be from the same studio.80% (contingent on above)If this does happen, I expect it to come from Riot, or maybe Epic, experimenting with how to grow their existing empires, rather than cross-organizational interaction.
Free-to-play game revenues don’t decrease from 2020 totals90%COVID caused a huge spike for gaming in 2020, but even if it gets resolved soon (which I’m skeptical of), I think the new users are here to stay. They’ll be excited to step outside again too, of course, but this year has wiped away a lot of stigma of gaming and brought new demographics to a place of comfort and loyalty to major platforms – those gains will be preserved.
Free-to-play game revenues increase by 5% from 2020 totals70%A bit less confident here, but gaming is still growing; insofar as COVID isn’t over, F2P is the way to go since it’s easiest to socialize on; and most companies have largely figured themselves out with respect to remote work now, meaning I expect more successful new launches next year as well.
Total gaming revenues don’t decrease from 2020 totals90%Same logic as with F2P above…
Total gaming revenues increase by 5% from 2020 totals60%…but I’m more confident in F2P’s ability to draw focus during quarantine than single-player games aside from a few big new releases (Sony’s new God of War, maybe?)
A single text-to-speech platform takes off, finding adoption with greater than 5% of game developers for at least some NPC voices in game.30%Having come to learn more this year about what the industry is looking for, my odds on this have actually gone down – I just don’t think TTS is in a place that’s acceptable outside of a few edge cases yet.
Mobile game revenues don’t decrease from 2020 totals60%Apple’s IDFA change will hobble mobile advertising, which is a huge source of revenue for mobile games. It’s not the entire platform, but I do think it will slow down growth…
Mobile game revenues decrease by more than 5% from 2020 totals30%…though I don’t expect it to substantially reverse time as far as mobile gaming is concerned.
Epic Games wins the legal case against Apple40%While I’m hoping for Epic’s success here, and am absolutely no expert, discussion seems to be pointing towards Epic being at a disadvantage.
Apple decreases its cut from 30% for all games50%That said, Apple has already decreased its share of small game revenue (though this barely will have impacted its revenues overall.) There’s a nontrivial chance that Epic’s lawsuit pressures them to do more, or even pressures Google or other providers to change their practices and put more heat on Apple to follow suit. Still not likely, but not that unlikely either.
Roblox IPOs…80%I see no reason this wouldn’t happen, but am not knowledgeable enough about IPOs in general to say so with more confidence
…and is worth over $10B at the end of 202180% (contingent on above)People keep talking about Roblox “maybe reaching $8B”, but Epic is at $17B today, and Roblox is by far their greatest competitor. (Unity also deserves mention, but right now, Roblox is following the philosophies that make Epic financially successful much more closely.) I absolutely expect $8B to be an underestimate, especially given a bit of time next year for Roblox to stabilize and gain after the initial IPO.
Valorant becomes an esports title with tournaments at the scale of CS:GO or LoL60%Taken pretty much directly from Dean’s predictions, but I think it’s a good note – Riot has a lot of esports experience, and while Valorant has been reasonably successful, they clearly have greater plans. But I think this depends a lot on COVID – if we’re still quarantined through the summer, there’s a lot less opportunity to build excitement here.

What do you think? Feel free to respond to these predictions in the comments, or add your own (or things you’d like me to register predictions for.) As always, I’ve tried to avoid Modulate-specific predictions in this thread, but otherwise looking to cover a broad range of topics from around the industry.

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