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NZ game developers exportsNew Zealand interactive game developers earned $203.4 million dollars during the 2019 financial year – double the $99.9m earned only two years earlier in 2017. The success comes from targeting audiences around the world and 96% of the industry’s earnings came from exports.

Source: Interactive Game Exports Double in Two Years to $200m – NZGDA

Technology lets us export photons instead of atoms. The idea was a common theme in my writing 25 years ago when the internet took off. It took time for the reality of this to creep up on us. Now it is happening in a big way thanks to New Zealand’s game developers.

One hundred years ago farmers would load sheep carcasses onto the, then, latest technology; refrigerator ships. These would belch smoke as they steamed to the other side of the world. It meant exporters earned foreign currency. This kick-started New Zealand on the path to, fifty years later, being one of the world’s richest countries.

Sheep carcasses, milk powder, crayfish, apples and all those other exports were made of atoms. They weighed kilograms and they needed to be physically shifted. The products would often take weeks to reach their destination by ship. There were physical risks.

Game developers sell light particles

Today, when, say, Grinding Gear Games, makes a game sale on the other side of the world, photons, tiny particles of light, race to their new home in a fraction of a second.

There’s nothing wrong with physical exports, that’s been what we’ve done for as long as anyone can remember. Yet tomorrow’s rivers of gold are going to come from exporting photons. We need to start thinking of games exports in the same way we once thought of meat or dairy exports.

If the game industry grows at the same pace for the next five years it could be worth a billion dollars a year by 2025. That’s still less than, say, wine or kiwifruit, but with much better margins.

Geoffrey Moore wrote Crossing the Chasm in 1991. The book is still an important sales reference for technology companies.

Moore says you can rank customers on a technology adoption scale. These customers can be companies, organisations or individuals.

There are five ranks. Moore divides the five into two clear groups and the gap between these groups is large. Or in his words, a chasm.

Moore’s first group are early adopters. They feel they must have the latest technology. This can be about prestige or perceived competitive advantage. They are willing to pay a high price to get hold of technology early.

This high price is important. Technology companies get a big margin which funds further development or marketing.

Visionary

The next group are visionary customers. They need a product to gain competitive advantage or control costs. They accept immature support and absorb any technology risk.

They’ll pay a premium, often less than the early adopter premium. This allows companies to develop marketing channels and support infrastructures. These are important in the next phase.

Moore’s third phase is the bulk of the market. Moore calls them early majority or pragmatic customers. They look for clear pay-offs from a technology investment. They deliver the profits and locks a technology into the mainstream.

The fourth group are reluctant adopters. They buy mature, proven technologies if there is a sensible business case. They look for commodity products.

The last group are those who may never adopt a technology. There are companies that still don’t use email, mobile phones or computerised book-keeping.

Crossing the chasm

Moore says for any technology to succeed it must cross the chasm from the first two phases and enter the third. It’s an Evil Knievel leap, many technologies can’t make it.

The bridge across the chasm might be technical. It can be about channel organisation or support infrastructure. There are political matters such as establishing a standard or it might come down to old-fashioned marketing.

To pick winners, focus on the product or technology’s ability to cross the chasm between visionary and pragmatic customers.

Besides Moore’s chasm, there are common sense ideas of price and utility.

A product which meets certain key standards can sell. The number sold depends on price and function. A lower price or more functionality means higher sales.

If the first two phases allow a maker to build in enough functionality or reduce price through economies of scale then it’s easier to cross the chasm.

Standards are successful

Standards are a further good indicator of likely success. Yet you need to read the signs.

Many so-called standards are anything but open. Accepted standards aren’t always the ones which prevail. Think of market dominating companies like Intel or Microsoft.

The standards used in a particular product or technology are not always fixed. For example, developers can change a non-standard communications protocol with a software upgrade.

Work, rest and play

Moore started out looking at business technology. The principles also apply to consumer products such as smartphones.1 The rules don’t change much between the suits and the open-neck shirts but their interpretation does.

Building up a head of steam to cross the chasm is harder for makers of consumer hardware. Consumers rarely look for a return on their investment in the business sense. They are less willing to pay top dollar for new products.

Complicating matters further is the way many products now straddle both markets. In some areas the consumer market influences business purchasing strategies. For example, the first customers to adopt the iPhone were consumers.

There’s a clear connection between Moore’s chasm and Gartner’s Hype Cycle. While the two look at adoption from different points of view, both recognise there is a hump to get over before a product or technology can succeed.


  1. In general I prefer not to use the term smartphone, here we need to distinguish modern iPhone-like devices from those that went before. ↩︎

https://brooksreview.net/2019/11/why-you-should-ditch-your-laptop-for-ipad-pro/

Ben Brooks argues that you should ditch your laptop for an iPad Pro. He says the iPad has shown it is a better tool than a laptop.

Up to a point I agree with Brooks. The iPad Pro can be a better work tool than a laptop in many circumstances. One day it may always outperform the more traditional computer format all the time.

The gap between what you can do on an iPad compared with what you can do on a laptop has almost closed. Every new version of iOS makes the gap smaller. That will accelerate now Apple has split iPadOS from iOS.

iPad Pro not there yet

But we’re still not all the way there yet. Some tasks are still better done on the laptop. Take, for example, troubleshooting a web page. Despite there being excellent iOS web inspection tools, my favourite is Inspect Browser, this still works better on a laptop with a desktop-style browser. Doing this work on an iPad is clumsy and feels wrong. 

Apart from anything else, some web pages still force the iPad to a mobile version. This makes troubleshoooting hard. Although you can now demand the desktop page.

On the other hand, there are tasks that are better on an iPad Pro than on a laptop. I’m a journalist, I write for a living, all day most days. Writing is arguably better on an iPad Pro than a laptop.

I was surprised to find the iPadOS version of Microsoft Word is a better user experience than the MacOS version. This could be in part because the iPad version is simpler.

I no longer use my MacBook as a portable. When I’m on the move the iPad is my preferred device. I fly with it, take it cafes and to meetings. Soon I will drop the MacBook, but not yet.

New Zealand’s Productivity Commission plays down the threat to jobs from technology.

Instead, it says we need more technology to power higher productivity growth. It says this, in turn, will lead to higher income growth and the money need to pay for the things we value.

The Productivity Commission’s draft report New Zealand, technology and productivity says the available data indicates widespread jobs market disruption won’t happen any time soon.

Productivity outlook uncertain

The commission points out the future of work is not certain. It says: “There will undoubtedly be change over the next 10 to 15 years, but not at unprecedented levels”.

In other words, that’s the foreseeable future.

The Productivity Commission’s press release hints at one of the great mysteries of modern times: We’ve been using computers in business for more than 50 years. Yet the dial doesn’t seem to move much on productivity. It certainly hasn’t moved as much as the marketing and hype from technology companies suggests.

In the inquiry director Judy Kavanagh’s words: “If the rate of technological change was accelerating, you’d expect to see evidence in the official statistics, such as faster productivity growth, more business start-ups and more jobs being created and destroyed.

“But what we see in New Zealand and across the developed world is the opposite.”

Positive effects

The commission is right when it says technology mainly has a positive effect on jobs and work.

Think of, say, dishwashers. These machines let people spend less time with their hands in a sink full of plates and greasy water.

Someone has to make, distribute and sell then install dishwashers. They generally require regular servicing. These jobs are all better quality, better-paid jobs than minimum wage dishwashing.

And, let’s face it, a lot of that dishwashing was unpaid domestic work.

There’s also an industry supplying dishwasher detergent and rinsing agents.

Instead of spending time dishwashing, people can cook more elaborate meals. They can spend their time on other more productive tasks. Instead of domestic drudgery, people could get jobs.

If you look only at dishwashing, the sum of created jobs might be negative. Yet by displacing a menial task, other more productive opportunities open up.

This, in a nutshell, is why technology can displace jobs, but it can also often create as many or even more than it destroys.

We do a poor job

Back at the Productivity Commission Kavanagh says: “Technological change may pick up in the future but even so, it will take time to diffuse and affect work in New Zealand. We do a poor job of picking up technology quickly.”

You don’t need to look far to understand the truth of this statement.

Anyone who has been following the fuss about people adapting to watching the 2019 Rugby World Cup on streaming digital services instead of satellite TV can see this is on the money.

About half the population is ready to stream, close to half the population is pulling their hair out in frustration coming to terms with what is, in reality, a very simple switch from one medium to another.

Education is critical here. So is experience.

Rugby World Cup, productivity

Anyone who has spent the last decade or two using questionable services to download music and videos and then moved on to Netflix would find streaming Rugby World Cup games to be trivial.

Yet for people who have never seen BitTorrent, Chromecast or Apple TV, it can be a challenge.

There’s a clear link between the challenges Spark faces with domestic entertainment technology adoption and people at the sharp end of our economic extracting value from business technology.

Watching how this plays out with the Rugby World Cup could give us some clues about how to better leverage computers, broadband and other tools that can improve productivity.

On Saturday I covered the China – New Zealand Year of Tourism Launch for the NZ Herald. The last session at the event was a fascinating panel discussion about the need for tourist operators to understand the importance of technology to a Chinese visitor and how to work with their needs.

Some highlights from the panel session:

Lisa Li managing director of China Travel Services New Zealand
Lisa Li

“Technology has a huge impact on their travel choices. From seeking information, making booking arrangements and paying. They do everything on their mobile phones.”

Lisa Li managing director of China Travel Services New Zealand, talking about young Chinese millennial vistors to New Zealand
Rebecca Ingram

 

Paper missing in action

There’s research showing the overwhelming majority of that millennial group has not picked up a single piece of paper media in over a year.

— Tourism New Zealand general manager Rebecca Ingram

“Just over two years ago we signed an agreement with Alibaba Group.

“We wanted to get value from the Chinese market while also ensuring Chinese visitors had a good experience in the country. Part of that was us supporting a roll-out of Alipay.

…only 13 percent of Chinese visitors have credit cards. If they weren’t able to transact in the way they are used to, we would be leaving money on the table and they’d have a poorer experience when they came. “

Justin Watson, Christchurch Airport chief commercial officer

“This is the first generation that has grown up with a smartphone since the age of ten. So everything they do revolves around their phones.

“If you are in the tourism business and you’re not driving visitor experiences through that channel you are going to miss out.”

Liverton CEO Justin de Lille

“In China, there can be an app that doesn’t exist one day, it launches and three months later there are 100 million people onboard.”

Tourism New Zealand general manager Rebecca Ingram

Read the full version of Technology enhances the visitor experience at the NZ Herald.