From Facebook’s acquisition of Oculus VR to Apple’s acquisition of Beats, major tech companies have been making headlines this year as they buy into new technologies more closely associated with gaming and entertainment than with their core businesses. What’s the play here and what can enterprises – which can seem so far removed from consumer tech – learn from it?
The answer lies with the customer. Gaming-focused tech is creating new consumer expectations that go far beyond just playing games. It is offering businesses new ways to engage with customers, learn about their needs and desires and better meet their changing demands. This customer insight, in turn, provides new business opportunities outside of the gaming sector. For example, Oculus is a wearable technology that offers a more immersive gaming experience, but it can also show Facebook what consumers look at and how, in a particular context. Beats uses sophisticated algorithms and curation to present listeners with personalized music playlists – while simultaneously gleaning insights into consumer preferences and crucially, the hundreds of millions of iTunes user credit card accounts that Apple can leverage for cross-sell and up-sell.
Clearly these technologies have broader consumer applications beyond their originally-intended purpose. But exciting possibilities lie ahead as consumer-led strategies impact the enterprise space. As consumers become more familiar and comfortable with gaming technology that tracks their every move or anticipates what they want, they are increasingly going to expect the same sort of immediacy when dealing with all kinds of businesses. For example imagine how virtual reality technology could transform the brick-and-mortar retail experience so that customers could ‘show-room’ and shop online simultaneously. When applied within the enterprise, gaming technology, alongside rapid consumer adoption, could fundamentally change go-to-market strategies, redefine customer engagement principles and open up a whole new world of data to drive customer experience for businesses.
Another recent move in the use of gaming technology went more under the radar, but is just as interesting. Microsoft announced in May that it will decouple the Kinect motion sensor technology from its Xbox One gaming console. While some analysts view this as an admission by Microsoft that consumers are not interested in paying for motion sensor technology, I see it quite differently. It’s a step towards a broad Microsoft home ecosystem, similar to what Google hopes to accomplish through its Nest acquisition, centered around technology that can understand your physical context and use that knowledge to determine what your needs are or will be. Being able to anticipate what a customer wants, before they know they want it, will be a customer engagement game-changer.
Introducing a new consumer technology always challenges companies to make the jump from “wow, that’s cool,” to “hey, this is useful.” But there’s a history of technologies developed for one purpose developing applications far beyond the original. Look at your smartphone to see many examples: an accelerometer originally intended as a gaming option has become the basis of fitness and many other apps; voice recognition that has languished in the PC world has found a home in the smartphone; and the smartphone itself is the descendant of a simpler device that, believe it or not, was once intended only as a way to make voice calls. Some innovative technologies take a while to find their destiny, while others catch on immediately. The clear lesson, however, is that a forward-looking company needs to consider each new capability to explore if and how, it can help the company meet customers on their own terms.
In future posts I will consider other ways in which consumer tech innovation, like Nest and the high-profile Google Glass, will impact the enterprise. For now, I’ll leave you with this parting thought. Gaming technology is creating a new set of customer expectations across the board – can you afford to ignore it?
(Note: this post first appeared on TCS Enterprise Insights)