OOH entertainment: The new media, tech battleground?| Commentary

Major acquisitions and mergers are creating giant consortiums that will look to define their entertainment holdings, creating a franchised ecosystem.

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2022 has seen the culmination of development and investment towards creating a changed landscape for the consumption of entertainment. The conditions seem to be right for leading entertainment brands towards consolidation, mergers and growth.

The market, through increased investment, sees major corporations looking towards creating a franchised ecosystems across the leading platforms, and a physical presence is now becoming as important as a digital, online and connected presence.

Developments in the out-of-home entertainment venue scene have continued to pick up speed. Recent months have seen increased investment into existing developments, seeing the funding of restructuring and growth along with a hunt for new amusement hardware.

One such example was seen from Round 1 USA, which revealed that a considerable import of Japanese amusement cabinets will be taking place across the US venues. The operation had commenced a new investment towards opening additional sites and also updating those already opened venues to stay ahead of the curve, offering unique entertainment.

Streaming content disruptions

The streaming content landscape for its part has seen the most incredible restructuring due to the impact of consumer consumption caused by the various lockdowns, and also by a move towards consolidation by the movie and entertainment industries towards creating a new ecosystem of streaming (digital) content .

Major power plays defined the end of 2021 and the start of 2022 in this market. One such example comes with the constant rumors surrounding the streaming platform Roku looking to acquire studio and entertainment giant Lionsgate. This is seen as a future development following the Amazon acquisition of MGM.

Likewise, these developments have downsides as well as ups. The streaming wars have seen major corporations invest millions into market shares, only to be deciated by poor implementation or market fluctuations. The Walt Disney Corp. has invested significantly into establishing its Disney+ streaming platform but has yet to reach the astronomical adoption numbers set. Seeing a downturn in subscriptions to the Disney service comes just as the corporation is undergoing corporate restructuring to prepare itself for what it sees as the coming storm.

One of the major developments was last year’s announcement of the ViacomCBS and Comcast agreement. The move marked an effort to offer the respective corporation’s content to an enlarged audience base, supporting their own streaming platforms and illustrating the momentous developments in this field.

Meanwhile, the Paramount+ and Pluto TV platforms are competing in a complicated and volatile environment. The market share leader Netflix saw a loss of some $50 billion in its value as it failed to hit major targets in achieving its goal of 222 million subscribers by the end of 2021. The need to shore up the structure and establish market security is a factor in the vast marketing budgets in play, and the need to establish audience recognition.

In search of a scalable ecosystem

Consolidation of the alphabet soup of streaming services has been seen as essential in these febrile waters. Major names see solidification achieved through a scalable ecosystem, comprising not just streaming entertainment but also extensive libraries of content and even, in some cases, a physical identity.

Sources see the vast technology giant Apple about to look towards solidifying its position. Already leading with its Apple+ platform, the ability to increase a library of content and properties has seen speculation rife of a major acquisition in the future, with names such as Sony Pictures suggested as a target by some observers.

All these developments can trace their implications not just to the impact of the pandemic, but also the streaming service global restructuring, with industry analysts suggesting that the streaming marketplace saw spending that exceeded $220 billion. It is interesting to place this into comparison with estimations of the gaming industry, recently valued at some $175 billion.

Videogame players up for grabs

These mammoth developments in streaming would soon be matched by similar gargantuan deals in the videogame arena.

2022 had only just begun when the news broke that two gaming giants were involved in merger talks.

It was announced that Microsoft, the software and technology corporation, which also owns the Xbox games console and game platform, was intending to acquire one of the largest videogame publishers, Activision Blizzard, in a deal reported as worth $68.7 billion. This will be the largest deal of this kind seen to date in the videogame sector and still needs to be confirmed by both boards, with possible federal scrutiny, but is expected to be ratified in 2023.

Meanwhile, Microsoft has been looking to establish its Xbox brand, having launched the latest generation of the gaming platform, while expanding its online game store (the Xbox/PC “Game Pass” service), surpassing some 2.5 million subscribers.

There are several overlooked elements regarding the Microsoft acquisition of the Activision Blizzard empire. Manyrs missed that, as part of the acquisition, Microsoft would be gaining King — the mobile game app powerhouse, with such popular properties as “Candy Crush Saga” — a series that has been downloaded some 2.7 billion times. The operation now gives Microsoft a powerful presence in the free-to-play online and mobile gaming sector.

Also overlooked was Activision’s ownership of Major League Gaming — a professional e-sports organization, linked to many of the major competitions surrounding Activision Blizzard games such as “Diablo” and “StarCraft.” This acquisition, now under the Microsoft banner, will see shakeups in the e-sports sector and could also encourage the development of competitive leagues.

Concerning the OOH scene, both corporations have dabbled in amusement business. Most recently, Microsoft licensed its phenomenally popular property to Raw Thrills to create “Minecraft Dungeons Arcade,” having also worked with the amusement developer on licenses such as “Halo: Fireteam Raven.” Likewise, Raw Thrills worked with Activision on a short-lived amusement release of “Guitar Hero Arcade,” while King would partner with Adrenaline Amusement on “Candy Crush Ticket.”

News of this acquisition marks a period of feverish activity within the international videogame and investment sectors. Mergers and acquisitions were being considered by numerous big corporations, as they rushed to position themselves in this changing global landscape.

Investors reacted to the news of the Microsoft acquisition positively towards the Redmond corporation.

More to come

The winners proved to be smaller videogame developers, who saw increased investment as investors looked to benefit from the changing landscape. It is expected that further announcements of major deals from other corporations and studios will be forthcoming.

Many observers have attempted to chart these mergers and acquisitions in the streaming and gaming landscape as reactions towards establishing a dominant position in the “metaverse.” The ability to offer consolidated brand and content strength enables corporations to position for success.

The definition of metaverse and how it will define future business has been confusing, with some attributing it to the emergence of Web.3.0, a hyper-immersive virtual commerce space, successor to the current web. Meanwhile, others look at the concept as a recreation of a virtual-world environment consumed only in VR, a successor to “Second Life.”

Whatever the truth of what is being proposed, these major acquisitions and mergers are creating giant consortiums that will look to define their entertainment holdings, creating a franchised ecosystem.

(Editor’s note: Extracts from this blog are from recent coverage in The Stinger Report, published by Spider Entertainment and its director, Kevin Williams, the leading interactive out-of-home entertainment news service covering the immersive frontier and beyond.)

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