EA strips micro-transactions from Battlefront II

EA strips micro-transactions from Battlefront II

Just a couple of hours before the full launch of Battlefront II, Electronic Arts has announced that they’re removing in-game micro-transactions completely as they want to rethink their pricing strategy.

A backlash that was huge in the online gaming community on various gaming platforms, forums, and social media. Though EA emphasized the removal of in-game purchases was temporary, it’s apparent that the community is strong and will react negatively to changes that it doesn’t consider good.

Oskar Gabrielson, the EA game developer, noted the radical shift in strategy in a blog post this evening, announcing the new product strategy development.

He said that their goal has always been to build the best possible game for the community – devoted Star Wars fans and gamers. Also, they had an ongoing commitment always to listen, evolve and tune the experience as the company grows. You can see this in both the main adjustments and polish, that they have made over the past few weeks.

But as the company approaches the global launch, it’s lucid that many of gamers feel there are still some problem spots in the design. But the audience feedback is essential in the game development and finding customer complaints solutions. They’ve heard the concerns about possibly giving some players unfair advantages, which is overshadowing an otherwise awesome game. The stated that it was never their intention and that they are working hard to solve the problem.

Battlefront II development team will now spend more time listening, tuning, balancing and adjusting. This means that the option to buy crystals in the game is now offline, and all you will earn the progression through gameplay. The ability to buy crystals in-game will become available soon, but only after they will implement changes to the game.

Micro-transactions

Micro-transactions have been one of the primary takeaways that the PC/ console gaming community has taken from the mobile gaming industry. What has been a bit harder to adjust for users is that while the “freemium” model has involved free-to-download titles. EA and other major gaming giants have shaped it into a model that works on full-price experiences retailing for $60-$100, to begin with.

That’s mostly been fine though, game players have adapted, and the shelf life of these titles have grown greatly in the face of developing online multiplayer modes. Besides, players can buy personalizations or cool new outfits that demonstrate their dedication.

The grounds to why so many gamers were pissed off by EA’s recent news lay in a fairly important red line where gamers believe that microtransactions should not influence gameplay. Also, they don’t want that to lead to anything close to a “pay-to-win” situation. It was quite clear EA crossed that line, and the community was extremely clear in showing them their point of view.

After an official EA account explained the company’s reasoning, Redditors responded massively down-voting the comment to the lowest rating ever before it. A lot of gaming sites packed with posts with petitioning gamers who had pre-ordered Battlefront II to cancel their orders. Soon, EA responded by saying that they were lowering the in-game credits (crystals) amount that you need to unlock certain characters.

The band-aid solution didn’t satisfy angry gamers. Today’s full court press on taking down micro-transactions completely, it’s clear that this is all a fairly crucial moment for the company that will shape how it considers pricing content in future. It turns out the bottomless realm of in-game purchases may have a bottom after-all.

Bitcoin has fallen to $ 13,000. Bitcoin Cash is growing. What’s happening?

Bitcoin has fallen to $ 13,000. Bitcoin Cash is growing. What’s happening?

After unprecedented growth, which began in the first days of December, the market of cryptocurrency has undergone a deep correction. In just a day, Bitcoin rate fell by more than 20%. Analysts predict an even more serious drop — to $ 10,000. At the same time over the past couple of weeks, the price of the “clone” Bitcoin has significantly increased. This “clone” is Bitcoin Cash.

Let’s collect all the forecasts of analysts for 2018

On December 5, payment service BitPay announced the expansion of the list of supported crypto-currencies. Among which in the first place was Bitcoin Cash. BitPay is a company that provides its cryptocurrency storage software. Also, it issues special debit cards for Bitcoin. And it represents an exchange for users who do not want to bother with entering and withdrawing fiat money through crypto-exchange exchanges. Since the announcement of the service to support Bitcoin Cash, the exchange rate has risen to $ 3,000. The next push was the message of the exchanges Coinbase and GDAX about the immediate start of Bitcoin Cash trading. The course, which was raised for several days, immediately reacted to this message and overcame the $ 4000 mark. Just a couple of minutes after the start of trading on the exchanges, the pair BCH / USD showed “significant volatility”. It led to an immediate stoppage of trades. The exchange rate of Bitcoin Cash for Coinbase and GDAX was about $ 9500 for about an hour.

This could happen because of insider trading. Exchange employees a few weeks before Bitcoin Cash was added to the listing knew about this event. So they could easily buy currency on other exchanges to earn a jump at the time of the addition. At the same time, Coinbase wrote in its blog that its employees “were forbidden to trade Bitcoin Cash a few weeks before the official announcement”. Therefore, violation of this prohibition would lead to criminal liability. Coinbase CEO Brian Armstrong said: “If we find evidence that one of the employees is violating our requirements – directly and indirectly – I immediately fire this employee and take appropriate legal measures.”

Reasons for Bitcoin fall

CEO Bitcoin.com and the ardent defender of Bitcoin Cash, Roger Ver also tried to protect the US stock exchange from “unreasonable charges”. In an interview with CNBC, he said that the practice of insider trading “is not a crime and does not require the intervention of regulators, even if the fact of using internal information for own enrichment is confirmed.”

“I think insider trading is not a crime. In the end, buyers should be aware of what kind of service they have chosen, whether it is a stock exchange or an ordinary coffee shop. Do not think that the government will protect you from everything in the world, “Ver noted.

Against the background of these events, the bitcoin rate began to fall. As of December 22, the weighted average rate is $ 13,600, according to CoinMarketCap. At the same time, the capitalization of the cryptocurrency fell to $ 228 billion. Moreover, the total capitalization of the market fell by more than $ 100 billion in just one day. There are several reasons for this correction. One of them is the statement of the founder and co-founder of Bitcoin.com. Emil Oldenburg wrote that he sold all his Bitcoins. In a conversation with the journalist of the Swedish site Breakit, Oldenburg stressed that he considers Bitcoin unsuitable for active cryptography. Therefore, he sold all the coins, and bought Bitcoin Cash for the proceeds.

“Bitcoin has become the riskiest investment now. This is an extremely high risk. So I recently sold all my bitcoins and switched to Bitcoin Cash”, Oldenburg said.

The role of Roger Ver

It is interesting in this situation that the immediate head of Oldenburg is Roger Ver. He is the owner of Bitcoin.com and one of the largest capitals in the Bitcoin Cash network. In October of this year, Ver stated that he considered Bitcoin Cash to be a “true” Bitcoin. It happened after reflecting the legacy of Satoshi Nakamoto, and recently noted that investors should prepare themselves for the depreciation of Bitcoin. They should invest their money in Bitcoin Cash.

Correction in the market also accompanies the news background. A few days ago there were reports that the issuer of tokenized dollars Tether was subjected to a hacker attack, as a result of which the attackers could take about $ 31 million in USDT. But despite the fact that Bitcoin and most coins have seriously fallen in price, traders call this the “Christmas sale” and are optimistic.

LedgerX and its activities

On the American exchange LedgerX, an unknown trader placed an order worth $ 990,000 for the right to buy up to 275 BTC at the end of 2018. The rate was made using a contract. It allows you to purchase an asset at a certain price up to a given date, regardless of the current price. The buyer gave $ 3,600 for 1 BTC to fix the price of $ 50,000 until December 28, 2018. Before this date he/she wants to cover the entire volume of the transaction. However, now she/he will have to pay another $ 13,750,000. Moreover, the total amount of investments will be about $ 15 million. CEO LedgerX Paul Chow said that “an unknown buyer” could be an investment fund that until recently did not have the opportunity to work with Bitcoin on regulated sites.

“I do not doubt that there are entire structures that are interested in such transactions and are already participating in them. This is not a private investor, let’s say so, “Chow said.

Mike Novogratz, CEO of Global Investment Partners, in an interview with Bloomberg, confirmed past statements that “Bitcoin is a bubble. In one day this bubble will burst, but that will not prevent investors from earning on the cryptocurrency.”

“I do not see any signs that could say that the speculative bubble is ready to burst. Before this, at least institutional investors and pension funds should enter the market. Bubbles do not burst, while there are buyers until there is a load, but it still does not. I think that’s what we’re waiting for”, says Novogratz.

Where Self-Driving Cars Go to Learn

Where Self-Driving Cars Go to Learn

A new Arizona’s governor, Doug Ducey, made a shift that lined the way for his state to become a driverless cars utopia and won over Silicon Valley. Mr. Ducey finds out that a local regulator was planning a sting on Uber and Lyft drivers to shut down the ride-sharing services for operating illegally. He was furious about it.

He thought that it was the exact opposite message that should have been sending. All entrepreneurs in Silicon Valley should know that Arizona was open to new business ideas.  And as he became an Arizona’s governor he had legalized ride-sharing.

Since that time Arizona has become a preferential partner for the tech industry. Thus it turned itself into a live laboratory for self-driving vehicles. Over the past two years, Arizona intentionally cultivated a rules-free environment for autonomous vehicles, unlike other states that have enacted driverless cars regulations over safety, insurance, and taxes.

A tech boom was the payoff for Arizona, with multiple autonomous vehicle companies crowding here to start up. Every day, Waymo, the driverless car, with Lyft, Uber, Intel and General Motors now set up hundreds of cars that are driverless on the streets of Phoenix. It became a flourishing metropolis of 1.4 million people.

Some businesses have pushed themselves by doing first-of-its-kind experiments in the state. For instance, Waymo announced that it had begun testing self-driving cars without anyone at the wheel to take over in an emergency. All automotive car trials had a human driver in the front seat before, just in case. Than Uber announced that it was also exploring similar tests in innovation navigation product development.

But Arizona’s tolerance has drawn some criticism from safety advocates who thought the companies have too much freedom to do their trials on public roads. They said state officials and car companies hadn’t solved questions about the prevention of cyber attacks on autonomous cars, the privacy of passengers, and how to ensure the security of vehicles that don’t have a driver.

Arizona authorities said that public has effective protection by basic rules that require a licensed driver somewhere in the automotive car. The state insurance regulator is waiting for the insurance industry to lead regulators on legal responsibility for driverless cars, especially in case a crash who will be responsible if a human being doesn’t drive the car?

Well, we think that it is good that they are not making regulations when they really don’t know how the automotive car development will perform.

Mr. Ducey impact on Uber

Mr. Ducey always thought that their state could beat California in every metric, fewer regulations, lower taxes and cost of living, higher quality of life.

Uber and Lyft executives thanked the governor for his support. At the time, Uber already had a little operation in Arizona for mapping roads. Two months later, the company announced that it would open a center in Phoenix for driver and customer support with 300 employees.

At that time, Mr. Ducey was taking his first steps into automotive vehicles and signed an executive order supporting them. He thought about the public safety, transportation factor, insurance, and other regulators to advance the operation and testing of automotive vehicles on public roads. But none suitable regulations existed at that time.

In California, Uber, Google, Ford, and GM, have fought lawmakers on self-driving rules. One rule required carmakers to account for the number of times a driverless car switched from autonomous mode to human-driven mode, which annoyed automakers who said those statistics give a false impression of safety.

That’s why may companies floured to Arizona, as the enthusiasm for new tech from the public and Governor Ducey makes it place where innovation can thrive.

Many Unknowns

Under Mr. Ducey, automotive car experiments in Arizona have grown over the last year.

Uber’s self-driving Volvo SUVs now pick up customers around Tempe on a daily basis. Waymo has sent more than 100 Chrysler automotive minivans to chauffeur families and other residents as part of a strongly guarded trial. The company plans to increase the car number to 600 vehicles by the end of the year. And many other vehicles for Ford, GM, Lyft, and Intel, are also driving around Phoenix.

Some residents have doubts. Groups that are representing the blind are enthusiastic supporters of such cars because they could give their members a lot of independence. Others support the idea of tech-related jobs coming to the state. But still, some are cautious. They are worried if the battery died in the car and it goes out of control and what about all the driver-employees?

Those questions are not just academic. The integration of automotive cars into human-driven traffic has faced some problems.

One of them is insurance, which is a huge debate in the industry, as who takes responsibility in a driverless car crash. Some think that the company, other that the third-party software or parts makers – since there is no driver.

The insurance companies need some time to figure out how they will ensure such cars. Arizona hasn’t changed its minimum insurance legal responsibility rules for self-driving car trials yet. The reason for this is that the government just doesn’t have the resources for that.

We must acknowledge that there are many unknowns. This phenomenon is relatively new, so there isn’t a lot of legislation yet. But the state ensures that smart machine development and incorporation will continue. It gives great cultural opportunities for Arizona to be seen as a place to live, work and have fun.

Snapchat’s New Test

Snapchat’s New Test

In modern social media era, you have two options: die young, or live long enough to turn into Facebook.

Snap – is the parent company of Snapchat and it seems to hade down the latter path. After an unsatisfactory income report which sent the company’s stock dropping by nearly 25 percent. Snap announced an all-encompassing strategy change that enclosed more than a few hints of Facebook envy.

In an attempt to stimulate user growth, Snap’s chief executive, Evan Spiegel, announced that Snapchat would change its design for easier use. The app has a minimalist design that targeted teenagers, while often confusing their parents. It will soon have an adapted feed that uses algorithms to show relevant stories to users, rather than making them look through a reverse-chronological feed. Two big platforms, Facebook and Twitter, leaders of influencer marketing services, made an analogous change last year.

Snap has also changed its ad-buying practice to be more like Facebook’s, with ads that you can buy through an automated system. And it signaled last week that it wanted to increase its presence in the developing world, where Facebook is currently dominant. Also, only about 25 percent of Snapchat’s daily active users live outside North America and Europe. And Facebook is reigning with more than 65 percent of users abroad.

It’s hard to blame Snap, which is taking the Facebook route. As Facebook and Instagram, which is also owned by Facebook, have been trying to copy Snapchat features for years. We are talking about Insta and Facebook stories. For instance, Instagram Stories, a near-clone of Snapchat’s most distinct feature, has reached 300 million daily active users. That is near twice as many as Snapchat.

But Snap’s revolved is more than a compulsory business move. It’s a condemnation of our existing tech landscape, and a caution sign for other start-ups hoping to take on the largest internet companies on their terms. If Facebook can still ruin a highly creative company with an app used by 178 million people, how is anyone supposed to thrive?

Snapchat’s distinctive qualities

Snap is still going strong as it remains trendy among American teenagers. Perhaps it is the most desirable marketing demographic in the world. Consumer analysis states that Snapchat has more users in the United States who are 12 to 24 years old than either Facebook or Instagram. Also, it has introduced some truly ground-breaking ideas, like the concept that not all digital communication should be permanently archived.

Still, the fact that Snap’s future is unsure should worry everyone, even if you are not using its products. That is because a world in which every flourishing internet platform must behave like Facebook is less innovative and a more boring world. It is creating conditions where there are no companies to challenge Facebook’s vision of the future digital world. It’s not a good sign that anyone, in order to survive as a competitor, must abandon the qualities that made it different in the first place.

Part of Snapchat’s innovation was in its different approach to social media marketing services, social networks, and messaging apps. Its disappearing photos stimulated sincere sharing of interesting moments with close friends, rather than showing off to a large audience of acquaintances.

Snapchat’s distinctive qualities also helped steer it clear of some problems that are now plaguing its rivals.

It appears that Snapchat, unlike Facebook, was never exploited by Russian propagandists to influence an election, and it has taken a responsible approach to preventing false information from appearing on its platform. Snapchat has not been overrun by bots and neo-Nazis, as Twitter has. And unlike Google, Snap has not harvested its users’ data in order to chase them around the internet with spammy ads for diet pills and miracle teas.

Snapchat weak points

Snapchat isn’t perfect by any means. Most of the troubles that company has have been self-inflicted. Snap has misled users about its data collection in the past, which led to a resolution with the Federal Trade Commission. It spent millions of dollars creating Spectacles, a pair of sunglasses with a built-in Snapchat camera. The news of it was everywhere, but actually, only a few people bought it.

Snapchat states that it was never supposed to be just a photo-sharing app. It was the quintessence of their worldview about how the internet should work.  They think that it should be temporary instead of permanent, candid instead of rehearsed, private instead of public. But why they started pursuing Facebook model?

Snap’s employees, many of whom come to the company because they believed that Snapchat would grow to massive size and be very popular, might bristle at any strategy that would hurt the value of their stock options. It would be very hard to say that Snapchat is going to be Facebook. They hope to be a multi-million-user social network that plays in a well carved-out niche.

Conclusion

Growth often comes at the expense of experimentation, and Snap’s decision to become more like Facebook is a worrying sign for people who care about preserving the internet’s original heterogeneity. Snapchat’s users once had something genuinely different, but it may be time for them to get more of the same.

The huge competition in the industry makes all social platforms change and shift if they want to stay relevant. Now the majority of platforms are copying Facebook, but you never know what waits for you just around the corner. Tomorrow we may see other platforms rise and take the crown

As a Lithuanian startup, Bored Panda spins on Facebook and now earns up to $ 30 million a year

As a Lithuanian startup, Bored Panda spins on Facebook and now earns up to $ 30 million a year

Changes in the algorithms of Facebook can become a nightmare for publishers – another innovation is capable of breaking them in a day. Especially if a significant part of the traffic comes from the social network. However, Bored Panda is not looking for ways to distance itself from Facebook and depend less on it. On the contrary, it is moving closer, and this pays off.

The beginning

The history of the Lithuanian start-up, which has learned to survive in today’s Facebook-dependent world.

Perhaps you do not know much about Bored Panda, but if you have a Facebook account, their posts just flickered in your stream. It could be “10+ photos before and after that prove that men are prettier than birds” or “41 cases when drivers of Uber caught customers by surprise”. Or you watched one of these short videos with the title “Shh, do not wake them” with sleeping seals, dogs, and hamsters.

Such are the unflattering and senseless publications that made Bored Panda one of the most irresistible temptations on Facebook. Their page has collected 30 million likes, cheers, comments and reactions in just the last month, ahead of BuzzFeed, CNN and The New York Times. In October, 116 million users entered the site.

All this the company did without attracting third-party investments, unlike digital publishers like BuzzFeed and Vice, which collected hundreds of millions of dollars. To date, Bored Panda employs slightly more than 40 people, and low operating costs, given the huge popularity, are beneficial to the business. According to the founder of Bored Panda, Tomas Banisauskas, this year the company expects $ 20-30 million in revenue, mainly from advertising, which is posted on the site.

Factors of success

Approximately 90% of all traffic comes from Facebook, making the social network the key to Bored Panda’s success. “They help us a lot,” says Banisauskas, who is 31 years old.

Bored Panda appeared in 2009 as a side project of Banisauskas. At that time a freelance photographer and a student at Vilnius University, was specializing in business administration. To create the project, Tomas was inspired by Internet-creatives like Million Dollar Homepage, when an enterprising guy earned a million-selling pixel on the site. The Lithuanian decided to create a website that would “fight boredom through art and good stories.”

In fact, Bored Panda collects user content from various sources. It includes Reddit, Instagram, Twitter, etc. It “rebates” them in a suitable format, adding a bright title, and sells on a single platform. Most of the content Bored Panda receives for free from photographers and “free artists”. They are not averse to appearing on the Facebook page with millions of covers. And yes, the company asks for permission to publish.

The publisher adheres to the thematic rule: only art, creativity, and jokes. No politics. Thus, Bored Panda built a “positive media empire”. Another important rule of Bored Panda is “quality, not quantity”. In October, only 519 posts (about 16 per day) appeared on the site, which is very much compared to CNN (5 595 per month) or Fox News (51 919).

New rise

Of course, things did not immediately go so well. Bored Panda relied for a long time on StumbleUpon, a popular link aggregator – it was he who gave the site most of the traffic. But in 2010 StumbleUpon sharply reduced the presence of Bored Panda and offered to purchase advertising. This experience gave Banisauskas to understand that “the only way to survive in this industry is to build long-term value through loyal subscribers”.

The next few years were difficult. In 2013 in Bored Panda began to notice the growth of views from a new source. From Facebook. Users of the social network fell in love with the positive content of the site. In just a year its attendance grew tenfold. Soon Bored Panda became almost entirely Facebook-dependent.

However, unlike competitors who were looking for ways not to depend on Facebook, Bored Panda went in the opposite direction and decided to get even closer. The company made several Facebook branches. It turned into separate brands: for example, art pages or pages with stories about pets. Moreover, they created Crafty Panda, which is focused entirely on DIY projects. For them, they began to create original content, and recently launched in the office video studio for their cutting.

Risks of Bored Panda strategy

However, such dependence carries risks. For example, a couple of months ago, Facebook tested a new ribbon design. As part of the test, Facebook extracted posts from brands, public figures, and publishers such as Bored Panda. Facebook placed them in a separate tape called Explore Feed. The existence of which very few people knew. This change caused panic among the content companies: some of them recorded a sharp traffic crash in one night. They were frightened for their future. Later Facebook turned off the experiment. However, this case showed how shaky the position of the company, which relies entirely on the social network, can be.

Banisauskas understands this well. Moreover, given that almost half of Bored Panda’s audience are Americans, he worries that the site may fall victim to the purges of “fakes” that the social network initiated after Russian campaigns during the presidential election in the United States. “We have nothing to do with this problem, but we could suffer collateral damage,” he says.

Last summer Banisauskas flew to New York to meet with other major publishers who focus on Facebook. Today they all exist with the tacit consent of the social network, knowing that by a wave of a finger they can merely take and disappear from there.

But while Bored Panda is doing well. Its founder is confident, as well as the content that he distributes: “Everyone experiences and does the right thing. But I believe that everything will be fine.”

What is the Future of the Sharing Economy?

What is the Future of the Sharing Economy?

The sharing economy has taken the world by storm and has a large and expanding force. Many people think that it is mainly limited to the mobility industry, like Uber and Lyft, and the accommodation industry, like Airbnb. But the truth is that economic base of sharing is very wide. Many other fields could soon face the disruption caused by sharing economy.

Well, you need to know that base of sharing economy is declining transaction costs. Internet connectivity, smartphones, and the cloud allow consumers to search for any product or services that they need efficiently. Also, it helps to understand the terms, enforce the agreed-upon contract and ensure timely logistics. Besides, annoying transactions have become hassle-free.

Short-term lodging rentals and ride-sharing emerged on the bleeding edge of the sharing economy because consumers used to booking hotel rooms and calling cabs. But consumer behavior can easily change when the economics, variety, and convenience afforded by new ways of conducting usual activities are very compelling and beneficial.

So, let’s together explore the ways that sharing economy may evolve in the near future.

The influence of declining transaction costs

In Dubai and India, RentSher connects people who want to rent household goods – party supplies and baby carriages, such as speaker systems and tents, are popular items – with people who want to earn extra income from unused items that they own. The service eliminates the inconveniences of traditional leasings, such as the need to arrange for delivery and pickup. Also, it reduces the transaction costs that prevent both parties from finding one another, negotiating, and closing a deal. Taking advantage of collaboration with industry influencers and broad local labor, RentSher sends teams into the field to photograph and list goods and then transport them to renters. They help both owners and potential renters to be comfortable using the platform.

Smartphones – a strong start pad for sharing services

Smartphone penetration is strongly rising, especially in emerging markets, building a strong start pad for sharing services. Majority of all mobile connections currently involve a smartphone in those markets. This developing base will encourage and enable innovations connected to the sharing economy for newly available consumer groups.

Also, transaction costs will continue reducing as even more friction is removed from sharing platforms.

  • Sensing, data, and connectivity are merging into a single system. Every person and object of interest are interconnected. In the modern world, prospective renters will have an instant view of the accessibility and state of shareable goods because they will all have an online presence. In this frictionless and connected world, matchmaking and intermediaries will decline because sellers and buyers will interact directly.
  • As drones, self-driving cars, and delivery robots come online, the expense and effort of transferring goods will fall, and the potential market for shareable goods will widely expand.
  • “Smart contracts,” blockchains and other code innovations that control terms and conditions, payment and enforcement, are quickly maturing. A blockchain is a sort of distributed ledger that can help to document asset provenance, identity and usage history.

With the decline in transaction costs, many products now owned by companies and consumers could become basically rental items.

Creating trends

Inventors and entrepreneurs are still exploring the influences of the sharing economy. That’s why new trends are constantly appearing.

A few of them may seem clear. First, that within the B2C market, sharing has for sure moved further than rooms and rides. Modern startups are offering shared workspaces, delivery, storage, pet sitting and even parking spaces. Last two are the most popular among users.

The second trend is the expansion of investment activity into the B2B market, with investments of about $150 million in new startup ventures. All industries don’t have protection from falling transaction costs and the rise of sharing-economy business models. That’s why executives across industries should be making a new marketing strategy plan.

Influencing the future of product design and consumer behavior

The expanding of the sharing economy has not just economic sense but also common sense. For products with long histories of ownership and emotional associations, the move toward sharing may be very slow or never happen at all. It’s hard to picture, for instance, an active sharing market for engagement rings or dogs and cats.

Product Design. Sharing economy has huge potential to reform product design. For example, vehicles, where an active car- and the ride-sharing market develops, clients no longer have to compromise with a vehicle that serves many needs poorly. Minivans, for example, are usually for children and gear transportation, commuting to work, and going out for a date without the kids. But they are not essentially the best choice for anything other than family trips. With sharing system a practical option, the family car can instead be a sedan. When adults have a need for carpool duty, they can rent a minivan. When they need to transport gear, they can rent a pickup truck or something like that. Besides, for romantic getaways, they can rent cool sports cars. Products that represent a compromise among multiple functions may become unnecessary, while niche products grow a local presence.

Everything as a service

The rise of the sharing economy is not happening by itself. In the wider economy, nonstandard “rental” arrangements are also gaining popularity. People are renting music more via streaming services such as Apple Music and Spotify. In 2017, record labels earned more revenue from these services than from the sale of albums and CDs. In computing, the cloud allows consumers and companies to access storage, software and other resources as a service. They pay only for what they use and stay away from the capital costs of ownership. As with sharing, lower transaction costs and faster download speeds have helped to shift to subscription and service models in software and music.

Sharing is possibly capable of replacing not just usual rentals but ownership of a wide range of products and services as well. But the sharing economy is still comparatively undeveloped and young. Most sharing businesses are still at the beginning of the S curve, and the consumer dynamics and technological possibilities of sharing are still maturing. Executives shouldn’t think that sharing tomorrow will be the same as it is today.

However, it’s not too early to visualize how falling transaction costs,  changing consumer preferences about ownership and XaaS business models will change business strategy. Executives should be looking ahead to these changes and altering the future of sharing to benefit from the opportunities and of course be ready to the potential competitive challenges that sharing economy will bring.