5/5 (4)

Imagine yourself surrounded by all kinds of wild animals in Kruger Park, South Africa. In a few hours, you will be skiing in Kurodake, Hokkaido, Japan. To conclude your day, you plan on enjoying the sunset at Stonehenge, England. Is this possible? No, not yet, but it might me with the help of virtual reality.

As of right now, virtual reality is used as a marketing tool at different travel related companies.  A few years ago, Hotel giant Marriott made a 4D Teleporter station with the use of the Oculus Rift, where guests can experience heat, sea breezes and ocean mists (Shu, 2014). See how the teleporter works for yourself here. Travel agency Thomas Cook has been helping customers to experience their potential destinations with the Samsung Gear VR headsets for quite some time now (Robles, 2015). You can imagine that this type of advertisement works better than some torn poster at the bus stop around the corner, this is advertisement on steroids (Parker, 2015).

But is virtual reality merely a marketing tool in the travel industry? 81% of adults say virtual reality cannot be a replacement for travelling and 92% say that travelling to a destination in virtual reality is not the same as visiting that same location physically (Martin, 2017). This is due to virtual reality lacking some important advantages of travelling, like eating local food and meeting new people. So for now, the answer is yes. Then again, public opinion is susceptible to change.

There is already one big advantage of this recent trend. It enables people who are physically or mentally limited to travel to certain destinations, to experience those destinations anyway. But will it stop there? Oculus CEO Brandon Iribe says that they are already able to give people the feeling of actually being at a destination and this technology will only advance more in the future (Parker, 2017).

I agree with public opinion that travelling in virtual reality is not the same as travelling in real life, but I do expect the virtual travel market to grow. There have already been some signs that might indicate this growth, like Facebook acquiring Oculus for two billion US dollars in 2014 (Constine, 2014).

To conclude, I do not think that virtual reality will disrupt the travel industry in the near future. However, I expect the virtual travel market to emerge in the coming years and offer a cheap and easy alternative to physical travelling, accessible for everybody with an internet connection. Maybe, when technology advances, the travel market will actually be disrupted by virtual reality. What do you think? Let me know in the comments!

Rik Helsloot

388388RH

Sources:

Constine, J. (2014, July 21). Facebook’s $2 Billion Acquisition Of Oculus Closes, Now Official. Retrieved October 08, 2017, from https://techcrunch.com/2014/07/21/facebooks-acquisition-of-oculus-closes-now-official/

Martin, C. (2017, June 16). Virtual Reality Not Seen As Substitute For Travel. Retrieved October 08, 2017, from https://www.mediapost.com/publications/article/302947/virtual-reality-not-seen-as-substitute-for-travel.html

Parker, J. (2015, June 19). How Oculus and Cardboard Are Going to Rock the Travel Industry. Retrieved October 08, 2017, from https://www.bloomberg.com/news/articles/2015-06-19/how-oculus-and-cardboard-are-going-to-rock-the-travel-industry

Robles, P. (2015, June 24). Will virtual reality revolutionise the travel industry? Retrieved October 08, 2017, from https://econsultancy.com/blog/66614-will-virtual-reality-revolutionise-the-travel-industry

Shu, L. (2014, September 28). For Marriott, the future of travel is a virtual-reality teleporter phone booth. Retrieved October 08, 2017, from https://www.digitaltrends.com/photography/marriott-oculus-rift-virtual-real-world-application/

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The video game industry has changed rapidly. The first games were played with floppy disks and CD ROMS. Nowadays, digital video games are offered on platforms like Steam and Playstation Network.

The shift to digital games was a key element in the growth of the video game industry and platforms played a big role in this shift. The total industry now has a value of almost $90 billion. Console gaming and PC gaming account for the biggest shares with a value of $32 and $36 billion, respectively. The market leaders are Playstation Network (console) and Steam (PC), both digital gaming platforms (Takahashi, 2017 & Tassi, 2012).

A PC gaming platform like Steam, links players and developers for the networked market, this generates network effects. Steam offers and provides infrastructure and rules to facilitate a two-sided market (Eisenmann et al. 2006). The added value of platforms like Steam depends on the number of users on the network. This creates cross side network effects for developers and gamers. Subsequently, there are same side network effects where each side attracts more users to that side.

There are four different roles in a platform mediated network, which can be open or closed (Eisenmann et al. 2009). Steam is a proprietary platform, as there is an open demand and supply side (gamers and developers), one platform provider (Steam) and one platform sponsor (Valve). Gamers affiliate with either one of the gaming platforms in the market through the power of the community, making it a mono-homing platform. The possibility to distribute games digitally and predominantly positive network effects in this market, allowed platforms like Steam and Playstation Network to dominate the market and disrupt the PC gaming industry.

Furthermore, business models are based on a variable percentage per game sold for the platform provider. The remaining amount is for the developers. Platform providers benefit from network effects which increase the amount of games sold. The five forces model introduced by Porter does not apply in the same manner to platforms (Van Alstyne et al. 2016). The ultimate source of competitive advantage for a platform is the number of interactions and the associated network effects. For Steam this translates into the number of consumers that buy, play or rate a game or participate in the forum focused on a game (Tassi, 2012).

Lastly, the prediction for the industry is that the shift to digitalization is likely to maximize even further and the global market is expected to grow 6.2% yearly towards 2020 to reach $128.5 billion revenue (McDonald, 2017). VR gaming is the next development in the gaming industry (Rogers, 2016). Collaborations with companies as Oculus exist and most games are compatible for VR. In 2020, mobile gaming will represent more than half of the total games market. If all games become available for mobile phones with the help of VR and their operating system as a platform, there will be no need for different platforms anymore. This will make platforms like Steam and Playstation Network obsolete.

Sources:
Link to technology of the week video:
https://www.youtube.com/watch?v=hL-zkvTboLM&feature=youtu.be

Scientific articles:
Eisenmann, T. R., Parker, G., & Van Alstyne, M. W. (2006). Strategies for two-sided markets. Harvard business review, 84(10), 92.

Eisenmann, T. R., Parker, G., & Van Alstyne, M. W. (2009). Opening platforms: How, when and why? Platforms, Markets and Innovation (Chapter 6). Edited by Annabelle Gawer.

Van Alstyne, M. W., Parker, G. G., & Choudary, S. P. (2016). Pipelines, platforms, and the new rules of strategy. Harvard Business Review, 94(4), 54-62.

Articles from the internet:
McDonald, E. (2017, April 20). THE GLOBAL GAMES MARKET WILL REACH $108.9 BILLION IN 2017 WITH MOBILE TAKING 42%. Retrieved October 06, 2017, from https://newzoo.com/insights/articles/the-global-games-market-will-reach-108-9-billion-in-2017-with-mobile-taking-42/

Rogers, A. (2016, June 06). An Investor’s Guide to the US Video Gaming Industry. Retrieved October 06, 2017, from http://marketrealist.com/2016/06/is-virtual-reality-the-next-big-driver-in-the-gaming-space/

Takahashi, D. (2017, March 16). Sony dominates console market with 57% share worldwide. Retrieved October 06, 2017, from https://venturebeat.com/2017/03/16/sony-dominates-console-market-with-57-share-worldwide/

Tassi, P. (2012, February 16). The Numbers Behind Steam’s Success. Retrieved October 06, 2017, from https://www.forbes.com/sites/insertcoin/2012/02/16/the-numbers-behind-steams-success/#23391ae470fd

5/5 (3)

There are a lot of things to enjoy in London during winter. You can go ice skating at Somerset House, walk around on the beautiful Christmas markets or you might even have tickets to Hyde Park Winter Wonderland. However, there is one thing you might not be able to enjoy this winter in London, Uber.

As of September 30th, 2017 Uber is set to lose its private hire operator license in London (Sundararajan, 2017). Transport for London (TfL) states that this is not an attack on innovative businesses like Uber, but rather on Uber itself. According to TfL, Uber does not pay enough attention to things like managing safety affairs and conducting criminal background checks. Furthermore, TfL condemns Uber’s Greyball technology. This technology was developed to avoid sting operations (Wong, 2017). By using data points like geolocation, credit card information and social media accounts, Uber was able to single out individuals who carried out these sting operations. Uber opposes that this technique was used in London.

People in London are less than thrilled about the Uber ban. There are an estimated 3.5 million users in London and over 40,000 drivers use Uber as a source for (part of) their income (Sundararajan, 2017). On September 22nd, the day of the announcement of the ban, a petition was started to cancel the approaching ban and by the end of this day it already had 400,000 signatures.

Sadiq Khan, the mayor of London, supports the ban, but there are many other government officials who do not. For example, union leader James Ferrar, who has been trying to make Uber drivers be classified as employees opposes the ban and he gets support from trade minister Greg Hands. This shows that even the government officials are not on the same page in this matter. See what Sadiq Khan had to say in the video here.

Uber’s history with laws and regulations does not strengthen her case. There have been many conflicts with governments making Uber illegal in Denmark and suspended in Bulgaria, Hungary, France, Germany and Spain (Sundararajan, 2017). However, the new CEO of Uber, Dara Khosrowshahi, asks TfL a chance to make a new start. He asks for a second chance to show that Uber can handle her responsibilities and make things right.

Whatever the plan at Uber may be, they better act fast. As of today, the ban has not been revoked and Uber’s arch rival Lyft is already moving in on the London market (Titcomb, 2017). If the ban stays, Uber will lose about 3.5 million users. If it does not, I expect that Uber has to make significant changes to her business model in London.

What do you think? Was this a rightful ban? Or should it be revoked? Let me know in the comments!

Rik Helsloot

388388RH

Sources:
Sundararajan, A. (2017, September 23). London’s Uber ban is a message to a reckless tech ethos. Retrieved September 25, 2017, from https://www.theguardian.com/commentisfree/2017/sep/23/london-uber-ban-message-to-reckless-tech-ethos

Titcomb, J. (2017, September 23). Uber arch-rival Lyft holds talks with Transport for London as it plots global expansion. Retrieved September 25, 2017, from http://www.telegraph.co.uk/technology/2017/09/23/uber-arch-rival-lyft-holds-talks-transport-london-plots-global/

Wong, J. C. (2017, March 03). Greyball: how Uber used secret software to dodge the law. Retrieved September 25, 2017, from https://www.theguardian.com/technology/2017/mar/03/uber-secret-program-greyball-resignation-ed-baker

Other interesting articles about the Uber ban:
https://www.theguardian.com/technology/2017/sep/23/uber-london-ban-austin

http://www.telegraph.co.uk/technology/2017/09/22/uber-denied-london-licence-huge-setback-app/

http://www.telegraph.co.uk/news/2017/09/23/uber-petition-reverse-ban-london-hits-500000-signatures-backlash/