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02 Mar 2022

TMT Predictions 2022

Games consoles reach middle-age, wearable devices drive health and wellbeing trends, push for sustainable smartphones, NFTs in sport set to soar, and increased chip investment: Deloitte technology, media and telecoms predictions

3 March 2022
  • As games consoles reach their 50th anniversary, Deloitte predicts the console market will generate €71.5 billion globally in 2022, up 10% from 2021
  • 320 million consumer wearable devices will ship worldwide in 2022
    Smartphones will generate 146 million tons of CO2 or equivalent emissions (CO2e), with 83% of emissions generated from manufacturing, shipping and the first year of device usage
  • At least 150 million streaming video-on-demand services (SVOD) paid subscriptions will be cancelled worldwide
  • NFTs for sports media will generate more than €1.7 billion in transactions in 2022, double that of 2021
  • Technology companies will reach nearly 33% overall female representation in their workforces in 2022
  • VC firms will invest more than €5.3 billion in semiconductor start-up companies
  • Increased discussion around regulating AI, with several proposals being made is predicted

The technology, media and telecommunications practice at Deloitte has published a raft of predictions for the sector for 2022 and beyond. The report highlights how worldwide trends in the industry may affect business and consumers.

 

No mid-life crisis for the games console: Market revenues will top €71.5 billion as device reaches half century

 

Deloitte predicts that the games console market will generate €71.5 billion in 2022, up 10% from 2021.

By the start of 2022, Deloitte predicts there will be 900 million console players worldwide. Each will bring an average €81 of revenue per gamer to the industry; comfortably more than the projected €29 per PC gamer and €44 per mobile gamer.

Overall, Deloitte forecasts that console owners will have more than 200 million multiplayer and games subscriptions in 2022. By 2025, these subscriptions will likely generate more than €9.7 billion in revenue, up from €5.8 billion in 2020.

 

Daryl Hanberry, Partner and Head of the Technology, Media and Telecommunications Industry Group at Deloitte Ireland, said:

2022 marks the 50th birthday of the games console with the device now a veteran of the technology industry, outlasting camcorders and CD players, among others. We saw usage of consoles spike during lockdown, with many using their devices as a way to socialise when restrictions prevented people from meeting in person. Usage has remained high as, for many gamers, leaving the game may mean disconnecting from friends.

Wearables to run rings around other digital device purchasing: 320 million wearable devices will ship worldwide in 2022

Deloitte predicts that 320 million consumer health and wellness wearable devices will ship worldwide in 2022, rising to 440 million units by 2024.

This comes as consumers are increasingly using smartwatches and fitness trackers alongside smartphones to track their health and wellbeing. There is also an increased focus on mental health and wellbeing and it’s predicted that global spending on mobile mental health applications will reach close to €440 million in 2022.

According to Deloitte’s Digital Consumer Trends research published earlier this year, smart watches saw the biggest increase in ownership out of any technology in Ireland in 2021: 24% have access to a smartwatch, up from 16% in 2020. Of those that own a smartwatch, 69% of people use them daily.

Suzanne McDonald, Head of Healthcare, Deloitte Ireland said:

The most common uses of wearable devices have been to help people get fit and beat their personal best or indeed compete with friends and colleagues on step count. But increasingly people are using these devices to monitor their health proactively, and the pandemic has accelerated that with 13% of those that own a smartwatch in Ireland using it to do so. However, data privacy remains a hurdle so it’s critical that companies integrate cybersecurity into every aspect of their product and business line. As usage of the devices continues to grow, we’ll likely see big investments in wearable device innovation in the few years ahead. As there is a particular focus on care in the community under the Sláintecare programme we can see multiple use cases for wearable devices in maintaining wellbeing and also in monitoring and managing a variety of health conditions.

Smartphones will generate 146 million tons of CO2 or equivalent emissions (CO2e) globally in 2022

 

Deloitte predicts that smartphones will generate 146 million tons of CO2 or equivalent emissions (CO2e) globally in 2022.

The bulk of these emissions, 83% of the total, will come from the manufacturing, shipping, and first-year usage of the 1.4 billion new smartphones forecast to be sold in 2022. Usage-related emissions from the other 3.1 billion smartphones in use during 2022 will generate an additional 11%, and the remainder will come from refurbishing existing smartphones (4%) and end-of-life processes (1%), including recycling.

Deloitte’s analysis highlights that the single biggest factor that could reduce a smartphone’s carbon footprint is to extend its expected lifetime, with consumers keeping their handsets for longer.

Laura Wadding, Partner Risk Advisory and Sustainability Market Lead, Deloitte Ireland, adds:

With sustainability now firmly on the boardroom agenda, businesses across all sectors are striving to understand the impact of their industry and products on their carbon footprint. The smartphone industry will need to balance product innovation with educating consumers on how best to recycle and prolong use of current and old devices.

Streaming platforms challenged to stop subscribers hitting the buffers: Deloitte predicts at least 150 million subscriptions will be cancelled in 2022

 

Deloitte predicts that in 2022 at least 150 million paid subscriptions to subscription video-on-demand services (SVOD) will be cancelled worldwide, with churn rates of up to 30% per market.

However, overall, more subscriptions will be added than cancelled as the average number of subscriptions per person will rise. In markets with the highest churn, many of those cancelling may resubscribe to a service that they had previously left.

Daryl Hanberry, Technology, Media & Telecommunications Industry Leader, Deloitte Ireland concludes:

Following blockbuster growth during the pandemic, the growth in new SVOD households is likely to slow across the Ireland, US and broader Europe. SVOD providers will use various plays to make their subscribers stay. They can team up with telcos to offer discounted bundles; they could offer additional types of content, from podcasts to mobile games; and they can release episodes of the most valued tentpole content weekly.

VC firms to supersize chip start-up investment in 2022: More than €5.2 billion to be invested in semiconductor start-ups

 

Deloitte predicts that VC firms globally will invest more than €5.2 billion in semiconductor start-up companies in 2022, more than three times larger than it was every year between 2000 and 2016, although a slight decrease on investments estimated to have been made into semiconductor start-ups in 2021 (€7 billion).

Deloitte predicts that while the semiconductor shortage will endure throughout 2022, it will be less severe than in the last 16-months, and it will not affect all chips.

While in mid-2021, customers have been waiting between 20–52 weeks for multiple types of semiconductors, causing manufacturing delays or shutdowns, by the end of 2022 lead times will be closer to 10–20 weeks and to reach equilibrium by early 2023.

Peter Glynn, Partner Enterprise Technology and Performance, Deloitte Ireland said:

Rising demand for chips across almost every industry – from data centres, to auto, to healthcare – has led to this lengthy chip shortage, which has been further exacerbated by the pandemic. However, the end is on the horizon, with fresh investment in manufacturing capacity from chipmakers and governments helping to meet demand by 2023. The EU also recently announced the European Chips Act setting out a new framework to help EU countries develop a strong semiconductor industry to promote a resilient supply chain. Irish companies have a real opportunity to seize the opportunity and be part of the global chip shortage solution.

Women in the tech industry: Gaining ground, but facing new headwinds

 

Technology companies will continue to close the gender gap in the years ahead and Deloitte predicts that large global technology firms, on average, will reach nearly 33% overall female representation in their workforces in 2022, an increase of 2% on 2019. The proportion of women in technical roles will also move upwards to 25%, but still lags the overall proportion of women in tech companies.

Drawing on lessons from the pandemic companies should embrace truly flexible working models, to expand the available pool of diverse talent as well as continue to invest in STEM education creating a pipeline of talent. While it may take many years of sustained effort, some companies are aiming to attract and retain women through initiatives like ‘returnship’ programmes, providing training and mentorship to women resuming their careers after a pause.

Caroline O’Driscoll, Technology, Media & Telecommunications Tax leader at Deloitte Ireland said:

While this progress is a step in the right direction, it is clear that we need to continue to invest in the STEM pipeline to ensure that the most diverse talent pool is available. Furthermore, tech companies need to continue to prioritise gender balance in the workplace. Identifying a responsible executive to commit to a holistic diversity, equity and inclusion strategy which is embedded in the business is essential to achieve gender equity, while also holding themselves accountable through metrics, results reporting and tracking progress. Only then can companies take stock of what is and isn’t working and make improvements.

NFTs for sports media to generate more than €1.7 billion in transactions in 2022

 

Deloitte predicts that non-fungible tokens (NFTs), unique digital identifiers that use blockchain to record ownership of an asset, will generate more than €1.7 billion in transactions for sports media in 2022, about double the value of NFT transactions for sports media in 2021.

Deloitte also predicts that between four and five million sports fans globally will purchase or receive an NFT sports collectible as a gift in 2022.

Daryl Hanberry, Partner and Head of the Technology, Media and Telecommunications Industry Group at Deloitte Ireland, said:

The 2021–2022 season could be the first in which NFTs start to make a major mark from a revenue perspective and by 2023 it is likely that most major football leagues in Europe will have launched multiple NFT related products. Locally we’ve seen the GAA enter the world of NFTs just last week becoming the first Irish sports brand or rights holder to issue crypto content. NFTs have added rarity to sporting moments and, in the future, every game of every season could generate a new matchday moment solely available to the highest bidder via an NFT.

AI and managing sensitive data

 

Deloitte predicts that there will be a great deal of discussion around regulating artificial intelligence (AI) more systemically, with several proposals being made – although enacting them into enforced regulation will likely not happen until 2023 or beyond.

David Kinsella, Partner, Risk Advisory, Deloitte Ireland, said:

We’ve seen detailed proposals from the EU on the regulation of AI as the technology becomes even more affordable and available to companies. Some jurisdictions are even looking at banning facial recognition. There are a range of concerns with the technology from fairness and discrimination to privacy and control. However, there are huge opportunities with AI and the next two years will be instrumental in forging the future of the technology across industries as regulation sets to increase.

About the TMT Predictions 2022

Deloitte's annual TMT Predictions report provides an outlook on technology, media and telecommunications trends that may disrupt and transform the business and consumer ecosystems worldwide. Visit 2022 TMT Predictions | Deloitte Insights to learn more and connect with us on: Deloitte: Overview | LinkedIn or Deloitte Ireland (@DeloitteIreland) / Twitter

About Deloitte TMT

The Deloitte Technology, Media & Telecommunications (TMT) industry group brings together one of the world’s largest pools of deep industry experts – respected for helping shape some of the world’s most recognised TMT brands and helping companies of all shapes and sizes thrive in a digital world.

About Deloitte

At Deloitte, we make an impact that matters for our clients, our people, our profession, and in the wider society by delivering the solutions and insights they need to address their most complex business challenges.

As the largest global professional services and consulting network, with approximately 457,000 professionals in more than 150 countries, we bring world-class capabilities and high-quality services to our clients.

In Ireland, Deloitte has approximately 3,000 people providing audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. Our people have the leadership capabilities, experience and insight to collaborate with clients so they can move forward with confidence.

In this press release references to Deloitte are references to Deloitte Ireland LLP. The information contained in this press release is correct at the time of going to press. Deloitte Ireland LLP is the Ireland affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms.

Media Contact(s):

Declan Jackson
Deloitte Ireland Communications
dejackson@deloitte.ie
+353 1417 3522

Georgina Francis
Deloitte Ireland Communications
gefrancis@deloitte.ie
+353 1584 5459

Get in touch

Daryl Hanberry

Partner, Head of Tax & Legal
+353 1 417 2435

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