On September 21, 2020, Korean top mobile operator SK Telecom Co. has announced its partnership with the Gwangju Metropolitan Office of Education aiming to offer a remote education service for students stuck at home amid the Covid-19 pandemic.
According to the operator, the service will be used by around 20,000 students at 312 schools in the city located 300 kilometers south of the capital. Based on the mobile carrier’s existing MeetUs Video conference platform, the service will make use of 5G and Artificial Intelligence technology to ensure high-quality video conferences and offer other educational features such as surveys and tests, according to The Korea Bizwire. MeetUs was launched in August and can be used to offer presentations and share content with around 100 people.
The company’s move comes after an introduction of mix and in-person classes in South Korea to curb the spread of the virus. At the end of August 2020, South Korea ordered the closure of all schools and kindergartens in the greater Seoul area, according to BBC.
SK Telecom is not the only Korean mobile carrier that introduced the remote education scheme. In fact, LG Uplus, considered the third-largest mobile carrier in Korea, has introduced a mobile app service for elementary school students. Moreover, KT Corp. has collaborated with Signong Group aiming to create educational content using Artificial Intelligence technology.
Online learning has become part of the educational process since the spread of the Covid-19 pandemic. Choi Won-hwi, who works in the South Korean education ministry division overseeing teacher instruction said, “We prepared for remote learning because of the Covid crisis, but now it will be a permanent part of the educational process”, according to The Wall Street Journal. In response to the Covid-19 pandemic, the Ministry of Education has allocated more than $110 million for developing online learning tools such as textbooks. Moreover, the government has requested the telecom carriers to give free online access to educational websites for Korean students.
On September 11, 2020, the Ministry of Education announced its plan to transition to e-textbooks for third and fourth-grade students in 2022. Higher grades would be covered starting 2023, according to The Korea Herald.
Global education market intelligence firm, HolonIQ, states that the expenditure on education technology is expected to reach $341 billion by 2025.
Worldwide IT spending to reach $3.9 trillion in 2021, Gartner forecasts
The worldwide COVID-19 pandemic caused dips in many industries, affecting everything from investments to supply chain as the global population took refuge within the safety of their own homes throughout the majority of 2020.
However, many have noted that 2021 will be different, as numerous vaccines have mushroomed all over the world to kickstart the worldwide economy once more.
This claim can be backed up by a recent report by Gartner which projects an increase in worldwide IT spending by 6.2 percent from 2020, reaching $3.9 trillion in 2021. Last year, IT spending declined by 3.2 percent due to companies placing their expenditures on technology and services that were considered “mission-critical” during the initial stages of the pandemic.
While the speed of digital transformation during 2020 reached superior heights to support shift to remote working, education, and social interactions, it also had a negative touch to IT spending by the end of the year.
“CIOs have a balancing act to perform in 2021 — saving cash and expanding IT,” said John-David Lovelock, research vice president at Gartner. “With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels. Digital business, led by projects with a short Time to Value, will get more money and board level attention going into 2021,” he added.
With that, 2021 looks to breath life within the IT spending segments across the board.
According to the report by Gartner, enterprise software is expected to have the strongest rebound of 8.8 percent, as remote work environments are expanded and improved. The devices segment will see the second highest growth in 2021 at 8 percent and is projected to reach $705.4 billion in IT spending.
“There are a combination of factors pushing the devices market higher,” said Lovelock. “As countries continue remote education through this year, there will be a demand for tablets and laptops for students. Likewise, enterprises are industrializing remote work for employees as quarantine measures keep employees at home and budget stabilization allows CIOs to reinvest in assets that were sweated in 2020,” he further explained.
The report further highlighted that through 2024, businesses will be forced to accelerate digital business transformation plans by at least five years to survive in a post-COVID-19 world that involves permanently higher adoption of remote work and digital touchpoints. Gartner forecasts global IT spending related to remote work will total $332.9 billion in 2021, an increase of 4.9 percent from 2020.
“Digital business represents the dominant technology trend in late 2020 and early 2021 with areas such as cloud computing, core business applications, security and customer experience at the forefront. Optimization initiatives, such as hyper automation, will continue and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks,” Lovelock noted.
While multiple COVID-19 vaccines are currently available, governments will continue to intervene to control the virus throughout the year; in parallel, geopolitical factors will also contribute to the generation inhibition of some regions such as Brexit, and the U.S.-China trade war.
Gartner projected that a return to 2019 spending patterns will not occur until 2022, despite many countries’ ability to recover at a much quicker rate. The report added that people-gathering industries, such as restaurants, travel and entertainment, will hover at the bottom long-term.
“COVID-19 has shifted many industries’ techquilibrium,” said Lovelock. “Greater levels of digitalization of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business. The biggest change this year will be how IT is financed, not necessarily how much IT is financed,” he highlighted.
Congressional letter blasts Facebook head for flawed algorithms
Two senior U.S. representatives blasted Facebook head Mark Zuckerberg, noting the platform’s content problems were “systemic” and require deep change beyond just moderation.
“Perhaps no single entity is more responsible for the spread of dangerous conspiracy theories at scale or for inflaming anti-government grievance than the one that you started and that you oversee today as Chairman and Chief Executive Officer,” wrote U.S. Representatives Anna G. Eshoo of California and Tom Malinowski of New Jersey, both Democrats.
The pair recognized the recent steps Facebook has taken to crack down on harmful accounts such as those related to QAnon, by removing specific posts that incite violence and banning specific users.
“But content moderation on a service with more than 2.7 billion monthly users is a whack-a-mole answer to a systemic problem, one that is rooted in the very design of Facebook,” the letter noted, adding, “the fundamental problem is that Facebook, like other social media platforms, sorts and presents information to users by feeding them the content most likely to reinforce their existing political biases, especially those rooted in anger, anxiety, and fear.”
Both Congress representatives accused the company of systemic failures which radicalized the “insurrectionist mob” behind the early January Capitol building attack, an effort by the former administration to stop a vote certifying the election and formalizing President Biden’s electoral status.
Thousands of violent rioters breeched Congressional security, reaching the House and Senate floors, causing large-scale damage, and killing a police officer.
“The algorithms Facebook uses to maximize user engagement on its platform undermine our shared sense of objective reality, intensify fringe political beliefs, facilitate connections between extremist users, and, tragically, lead some of them to commit real-world physical violence, such as what we experienced firsthand on January 6th,” noted the letter.
They also reference a 2020 initiative by Facebook itself to limit “bad for the world” postings, which the Wall Street Journal reported was markedly revised to not damage the company’s commercial interest by diminishing it huge user base.
“It scrapped the algorithm, when it became clear that it meant users were spending less time on the site,” the joint letter highlighted.
The pair hoped that the social media giant would immediately make permanent and universal these and other changes to its recommendation system which have been implemented temporarily or on a trial basis in the past.
“[We also hope that] you begin a fundamental reexamination of maximizing user engagement as the basis for algorithmic sorting and recommendation,” the letter concluded.
Facebook has released no comment from Zuckerberg or a general statement in reaction to the letter.
In two separate letters, the Reps. accused Google-owned YouTube and additional social media-giant Twitter of also using structured algorithms that respectively act to amplify, “White supremacist, anti-Semitic, and other conspiracy-oriented material” and “facilitate connections between extremist users.”
Newzoo’s Games Trends to Watch in 2021
As 2020 is finally drawing to a close, it’s time for us to turn the spotlight onto next year. In terms of trends, 2021 is shaping up to be a hugely positive year for the games market, which will start to return to normalcy after an exceptional growth period.
In the coming weeks, we’ll publish similar articles about the mobile and esports markets, but for now, let’s dive deep into the biggest games trends of next year.
1. Engagement and Revenues Will Continue to Flourish (Even After the Pandemic Ends)
The COVID-19 pandemic certainly accelerated many trends in the games market, helping engagement spike across the globe. Of course, this engagement trickles into spending.
Even after the pandemic subsides, which we hope will be sooner rather than later, we forecast most of the additional engagement and revenues to stick. Gaming has etched itself in the habits of people during the lockdown, and the investments made to enjoy gaming will not be easily cast aside. However, the level of growth maintained throughout 2020 will not be replicated next year, given the unique circumstances during the year.
Per platform, PC and console gaming has a higher barrier to entry but therefore more sticking power. Mobile gaming saw the largest positive impact of the lockdowns, but the low barrier to entry to mobile gaming means the lowest barrier to exit as well. Retaining the influx of new and returning players in 2021 will be one of the key challenges for developers and publishers.
Our Global Games Market Report shows that in 2021, 2.8 billion gamers worldwide will help the global games market generate revenues of $189.3 billion. Emerging markets will drive much of these new revenues, as infrastructure and economies continue to grow across regions like Southeast Asia and Middle East & Northern Africa.
2. It Will Take Time for Next-Gen Console Supply to Catch up to Demand
Manufacturing, marketing, and launching new consoles is never an easy feat. But orchestrating these tasks during a pandemic—when supply chains are heavily disrupted—made things even more challenging for the PlayStation 5 and Xbox Series X|S launches.
On the hardware side, the aftermath of these challenges will ripple into the beginning of 2021 and beyond, and it will take time for the supply of next-generation consoles to satiate the skyrocketing demand.
Software development will also continue to feel the impact of lockdowns. Many of the games that were delayed in 2020 were in post-production (meaning the lion’s share of the dev work was already done). Next year, we’ll likely see even more delays for AAA games that were earlier in development at the start of the outbreak.
On the upside, games like PlayStation’s Horizon Forbidden West, many third-party games, and almost all Xbox first-party games will be available on both generations (past and present). Therefore, console spend will remain high in 2021, mostly driven by:
- The massive installed base of the PlayStation 4 and Xbox One generation.
- The ongoing transition to F2P spending on console
- The strong performance of the Switch.
3. The Cloud Gaming Market, Having Proven its Value in 2020, Will Grow Its Audience in 2021
This year marked a key inflection point for the cloud gaming market, with most of the major players (including Amazon, Google, Microsoft, and Tencent) having launched their respective services. Furthermore, stay-at-home orders sped up the adoption of cloud gaming globally, with consumers finding themselves with more time to invest in gaming.
In the West, workarounds to App Store challenges mean cloud gaming apps are finally making their way to iOS (via a web app) and other platforms. Stadia already has an iOS Safari-based app that reportedly works well. Meanwhile, xCloud’s app is due for release on PC and iOS in the spring, and Xbox Boss Phil Spencer has already hinted at smart-TV compatibility.
To that end, yearly cloud gaming revenues will exceed $1 billion for the first time next year, and its serviceable obtainable market (SOM) will spike. Want to learn more? Stay tuned for our Global Cloud Gaming Report update and content next year!
Cloud gaming’s use cases—which we highlighted in our 2020 report—are now becoming more visible. Game developers have been using services like Stadia and Parsec for QA (Cyberpunk 2077), demoing games to the public (Immortals Fenyx Rising via Stadia), and more. This trend will accelerate into 2021.
Next to that, Cyberpunk 2077’s launch has underlined one of cloud gaming’s biggest use cases: high-fidelity experiences without the need for expensive hardware. The Stadia version of the game features hardware-taxing features like ray tracing and DLSS—all while removing the barrier of expensive hardware.
Cyberpunk 2077’s reviews on previous-gen consoles were negatively impacted by a worse-than-expected technical performance, Therefore, cloud gaming services such as Stadia and GeForce Now stood out as one of the best ways for gamers to instantly experience optimized graphics.
4. The Rise of Gaming-as-a-Platform And Metaverse Development Will Expand the Addressable Market for Publishers
Virtual and social spaces have been a growing trend in gaming for over a decade now. However, owing to the lack of physical gatherings this year, the use of games as a “metaverse” has accelerated. The interest in using games as a platform for hosting simulated activities will be one of the most impactful trends for the coming years.
Game worlds can now closely simulate experiences such as fashion shows, music performances, movie viewings, and more. Notable examples include:
- Lil Nas X’s performance in Roblox.
- Travis Scott’s and other music performances in Fortnite.
- Marriages, graduation ceremonies, and even funerals taking place in Animal Crossing.
- Countless brand, media, and content crossovers in these shared spaces.
Despite taking place within games, these fundamentally non-gaming experiences have the potential to draw in non-gamers into the games space, growing the userbase for publishers.
The value of such collaborations is beginning to show itself—for publishers, artists, and brands alike. Travis Scott, for example, reportedly grossed roughly $20 million for his Fortnite concert appearance.
So far, over 140 million people watched the Travis Scott concert on YouTube, compared to approximately 12 million who participated in-game, demonstrating both the growth potential and demand for such content.
Even beyond the pandemic, we will likely see brands across numerous sectors experimenting in the space. These digital events will complement their real-world counterparts (and vice-versa).
Video games are ripe with engagement—especially with younger audiences, so we expect to see this trend continue, particularly as traditional ad spend is in flux.
5. Gaming Will Energize Efforts Towards Reducing Toxicity and Promoting Diversity and Inclusion
Games such as The Last of Us Part 2, Apex Legends, and Tell Me Why are prime examples of diversity in games, and more titles than ever before now feature accessibility options, boosted by releases like the Xbox Adaptive Controller and organizations like AbleGamers and SpecialEffect.
Online platforms and ecosystems are also striving to make their social hubs more wholesome and less toxic. To that end, Microsoft, Sony, and Nintendo recently announced a collaboration committed to safer and more responsible gaming and kerbing toxicity.
Another example from this year came from Riot Games, which formally invested in tackling toxicity in 2020 release Valorant, after its own developers reported incidents of harassment. Companies’ efforts over the past few years are certainly to be commended, but we still have a long way to go.
This year also saw the games industry face a “me-too” wave of allegations of abuse and sexual harassment. In combination with the rise of the Black Lives Matter movement, the attention on social issues will drive the industry to prioritize diversity and inclusion efforts in 2021.
Our recent Diversity & Inclusion Study, which is already helping many top publishers identify opportunities to make games more inclusive, shows that around half of players in the U.S. and the U.K want more diverse characters in games. Many also want publishers to take a stance on societal issues.
With game communities continuing to grow around new forms of engagement, the responsibilities of game IP owners have become even more complicated, leading many companies to create internal positions and even teams dedicated to diversity and inclusion.
We will begin feeling the impact of these initiatives more next year, and we’re excited to see the resulting game experiences for ourselves next year.
One thing is for sure: the next few years are due to disrupt the market as we know it, thanks to the release of the next-generation consoles, cloud gaming bringing about new business models, and games—from AAA big-budget to hypercasual experiences—experimenting with social features.
This article has been written by Amsterdam-based Games Market Insight firm Newzoo, detailing the gaming trends that will shape the year to come.
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