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Who will control the quad-screen future?

Glu CEO Niccolo de Masi sees Sony, Nintendo "squeezed out of relevance" as control of the living room shifts to bigger companies

Late last year, developers submitting games to the Apple App Store began receiving notice about a 64-bit requirement coming into effect in H1 2015. Apple mentioned their long-term architecture heading in a 64-bit direction approximately two years before. Reflecting upon this it seems likely that 64-bit support for games on iPhone and iPads is being required so that a new as-yet-to-be-announced device is able to launch with thousands of great apps already compatible.

Perhaps this device will be announced in the fall and ship in 2016 - giving the iWatch the limelight throughout 2015 to build its install base. The anticipated launch of this device begs the question - will this 64-bit device be part of a play by Apple to advance powerfully into the living room?

Building a Quad-Screen Ecosystem

I have long believed that the next decade will be about the largest technology companies in the world building ecosystems that work across all four primary screens of our digital lives - smartphone, tablet, laptop/desktop, and the television. I call this our quad-screen future - seamless access to the games, apps, music, movies, and television we love, wherever and whenever we desire. Messaging across these screens and various wearable devices is already possible. A unified billing relationship with low-friction purchasing, and cloud storage of all your content are both essential elements of such ecosystems.

Apple and Google are in pole position to create this quad-screen future. They have the balance sheet, R&D scale, and consumer momentum required to increase the breadth and depth of their ecosystems worldwide. Microsoft, Amazon, and Samsung are currently second tier combatants in this battle. They each hope to leverage existing strengths to remain relevant in contention as a viable 'third way' for consumers.

"Lacking any kind of momentum in this multi-screen ecosystem future are Sony and Nintendo. I expect both will be squeezed out of relevance by dramatically larger firms by 2020"

Quad-screen ecosystems are a powerful way of locking consumers onto a set of hardware and software solutions. The lock-in will be at least as powerful as what 'WinTel' achieved in 90s. This time around there is the added dimension of ongoing billing relationships as well as your personal photos, videos and content choices - all held in the cloud.

Apple is already deepening their ecosystem to include wearables and payments. Google, Samsung, and Microsoft are thinking similarly and also beginning to tackle the connected home. iWatch, ApplePay, Google Wallet, Nest, Galaxy Gear, HoloLens, Oculus, Cardboard, Beats Headphones - imagine where these ecosystems will be in five years.

The Hardware Battle

Of all of these screens however, the living room has by far the largest existing revenue streams for Apple and Google to seek to muscle in on. Cable companies, traditional broadcasters, smart-TV manufacturers, movie/television studios, and game console manufacturers have each carved out mindshare. Living room eyeballs are also shared with various add-on devices such as Google ChromeCast, Apple TV, and Amazon FireTV, which in-turn offer services such as Netflix, Hulu, HBO Go, etc. With so much complexity in the living room, one has to wonder whether there is a better way.

There are in fact only about 260 million households in the world that have a console today, and only around 87 million consoles are expected to be shipped in the current generation. Even with China finally coming online for consoles, even optimistic prognosticators do not envisage this as more than a flat 100 million household opportunity over the next decade.

As such, lacking any kind of momentum in this multi-screen ecosystem future are Sony and Nintendo. I expect both will be squeezed out of relevance by dramatically larger firms by 2020. The same can be said of third-party independent game controller startups such as Ouya, Gamestick, and Mojo. Whether these firms are acquired, split up and/or dissolved will come down to tactical realities and their own execution.

I believe that the future of the living room is not about having to navigate through half a dozen different boxes, plug-ins, subscription services and providers. It will instead be about one simple interface and control system, with all the content you desire available. At stake are not just the existing hundreds of millions of households driving significant living room ARPU (average revenue per user.) Another approximately billion households exist that have yet to adopt services beyond free terrestrial TV broadcasts.

Complex content windowing agreements already in place have and will continue to slow down the pace of progress in the living room. Rather than a revolution we are more likely to see a continual evolution in user-friendliness and lowering of subscription price points. 'Cord cutting' will increasingly become irrelevant nomenclature. Everyone will demand broadband internet connectivity as their top priority. Content services will look the same regardless of what type of pipe reaches your home. This is already true with Netflix and Amazon Prime. Consumers will care little about who provides the physical infrastructure to them as long as it is fast and reliable.

AppleTV has slowly but surely expanded the content it offers over the last few years all the while maintaining its $99 price point. Experiments with gaming over AirPlay, and supporting third party game controllers have both taken place. Apple has called AppleTV 'a hobby'. There have also been rumors for years that they have been perfecting an innovative interface for a new device that contains a TV-sized monitor. In November 2013 they also acquired PrimeSense - the Israeli sensor technology company used in the Microsoft Kinect camera.

Future of the Living Room

Imagine a world where your phone is your universal controller in the living room. It allows you to play the same games, and launch the same apps as you do on your mobile devices. You can select the movies, television, music, personal photos and videos you wish to experience - all with the familiar touchscreen interface you are accustomed to on your smartphone and/or tablet.

"Imagine where $99 hockey-pucks will be in a couple of Moore's Law cycles"

Apple, Google, Microsoft, Amazon, Samsung all have an opportunity and the wherewithal to create precisely this experience. And it is precisely this experience that would be compelling in its simplicity for both currently-wired and unwired households alike. Hit the right price point and the next billion households are your oyster. Imagine where $99 hockey-pucks will be in a couple of Moore's Law cycles.

My expectation as such is that the largest technology companies in the world will simultaneously innovate in two directions in our living room. Firstly they will continue adding power, functionality, and intuitive interface design to 'good enough' low-footprint systems such as the current AppleTV, Google ChromeCast, Amazon Fire TV Stick. At the same time there will be an aggressive race to perfect motion-detection, virtual reality, and holographic imaging systems.

To avoid anti-trust concerns, technology titans will invest in organic bandwidth rather than acquire existing cable or telecommunications companies. They will also invest in organically creating original content. Consolidation will continue amongst existing living room players in order to create sufficient scale to compete with the largest and most profitable companies in the world. All the while, our experience will become simpler, cheaper - and with customer service delivered at the level of the iPhone (though it is virtually never needed).

At Glu we have been preparing for a multi-screen world for years. Our games support the iPad retina display and thus are built with more pixels than can even be displayed on 1080p HD TV. We built the first native game for Google Glass - Spellista. We have also built games for Amazon Fire TV and are early supporters of iWatch with a companion app for our Kim Kardashian: Hollywood game. We look forward to Apple, Google, Amazon, Microsoft, and Samsung expanding the reach of our games seamlessly to the fourth screen - and beyond.

About the Author

Niccolo de Masi joined Glu as its President and Chief Executive Officer in January 2010. Prior to joining Glu, Niccolo had been CEO of Hands-On Mobile, and CEO of London-listed Monstermob Group PLC. This article represents the views of Niccolo de Masi and not necessarily the views of Glu Mobile Inc. or its other directors, officers and employees.

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