Horizons Newsletter – week 44 // 2019
Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
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Virtual ‘skins’, real identities
Video games are no longer just games but rather social spaces where millennials and Gen Z spend more than a quarter of their media consumption time. Extensive opportunities to customize a game character’s appearance through ‘skins’ – outfits that alter the appearance of a character – offer users the ability to shape and express their identity in the virtual world. As more social interaction moves to the virtual world, the importance of expressing one’s identity there grows, and as a result, skins make up the large majority of in-game purchases. Popular free-to-play games like Fortnite and League of Legends base their revenue models on selling skins and other cosmetic items. Despite offering no in-game advantage to users, revenues from in-game purchases have skyrocketed: Fortnite earned its publisher Epic Games $2.4 billion in 2018. Major brands like Nike and Louis Vuitton have taken notice and are collaborating with game developers to create limited edition in-game outfits. By offering these exclusive and highly sought-after skins and items, brands hope to engage with audiences that are difficult to reach through traditional channels.
Europe’s Green New Deal
The new President of the European Commission, Ursula von der Leyen, has expressed great green ambitions for Europe. Her plan for a Green New Deal for Europe promises to ‘end the madness of endless growth and pave the way for climate justice’ by addressing Europe’s economic and environmental crises. The plan pledges to create millions of jobs and to make the E.U. climate-neutral by 2050, to be enforced by “the first European Climate Law”. Critics question whether this ambitious plan is feasible considering the limited budget and power of the E.C. and the fact that Eastern European states are unlikely to back it. Nevertheless, the plan might be forceful in spelling out a truly European vision for becoming the “world’s first climate-neutral continent”. It envisages that Europe can take a middle position between the authoritarian Chinese and liberal American models. Part of the plan is also to introduce a carbon tariff at the E.U.’s border, to restore a level playing field with the two superpowers, which do not impose a pollution constraint on their industries.
Zeroing in on 0.0 beers
Non-alcoholic and low-alcohol beers are becoming increasingly mainstream, reflecting changing consumer practices and social norms about alcohol consumption. First, research into the nascent field of “taste technology” enables beer companies to unbundle the taste of alcoholic beer at the molecular level, and then re-bundle this into beer without alcohol but with the same taste. Given their lower prices due to lower taxes, non-alcoholic beers are thus becoming attractive substitutes from a utilitarian perspective. Secondly, as digitization allows more insight into the effects of our consumption practices and preferences, research shows that alcohol consumption renders the highest socially detrimental effects and costs. As a consequence, social norms are increasingly biased against alcohol and in favor of non-alcoholic beer. Lastly, these beverages tie in with the rising “wellness mentality”, in which consumers want more control over their physical and mental health. Especially younger generations, to whom the pleasure of consuming alcohol no longer outweighs the negative effects (e.g. hangover, reduced concentration, poor sleep), are focusing more on activities that increase their wellbeing (e.g. sports, healthy food).