The Year Ahead in Tech

This column was originally published on RealMoney on Dec. 14 at 7:18 a.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Last year, I made a set of 10 tech-related predictions for 2006. On Tuesday I revisited that piece to see how accurate those predictions turned out. Now I'm ready to post predictions for 2007, including some nontech forecasts.

Financial Services

Given mediocre results by the hedge fund industry as a whole, investors will begin to think twice about paying a 2-and-20 fee structure to underperforming hedge funds, and even more so for underperforming fund of funds. This will result in a serious slowdown of inflows to hedge funds, having a modestly negative impact on the large brokerage firms such as Goldman Sachs(GS Quote) and Morgan Stanley(MS Quote).

Citigroup(C Quote) will give in and restructure as major institutional investors, including large mutual funds, put pressure on management to unlock value by spinning out one or more units of the company, most likely the investment bank.

Video Games

Wal-Mart(WMT Quote) will remain a target for both politicians and activist groups, and the company will cease selling violent video games by next Christmas. This will be brought on by the release late next year of the next iteration of Take-Two Interactive's(TTWO Quote) Grand Theft Auto franchise.

(This will translate into a nice sales boost for GameStop(GME Quote).

Sony(SNE Quote) will end up with egg on its face as Konami(KNM Quote) releases a Metal Gear game, a highly coveted Sony PlayStation exclusive, on the Microsoft(MSFT Quote) Xbox 360. Sony will also dramatically cut the price of its PSP handheld as a result of the constant beating administered by the Nintendo DS Lite.

Halo 3, due out on the Xbox 360 in November 2007, will notch more than $200 million in retail sales in the first 24 hours of release, aided by demand skewed toward the $100 Legendary Edition version of the game, which includes various memorabilia. Good for GameStop, but not good enough to make me say buy that stock here.

Microsoft will either cut or even completely eliminate the cost of its Xbox Live Gold online gaming service.

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