Stuff Worth Knowing for the Week of January 16, 2023
Layoffs, strikes, poor management, and a ton of AI abound!
Welcome back to Stuff Worth Knowing! Each week, I'll round up news related to tech, video games, film, television, anime, and more. At the end of each newsletter, there will be a section called On The Calendar, which will include some of those notable dates that are near-term. Oh, and I also launched my Patreon, SavePhile, where my more thoughtful musings on any topic will go.
Apologies for the delay in publishing. I normally aim for 3pm EST on Saturday but life happened. I'll try to keep delays to a minimum.
I'm not gonna lie, it's been a tough week for a lot of folks. I'm not going to frontload with that toughness, however. So before we talk about the elephant in the room, let's talk about another category.
Video Games 🎮
Ubisoft Paris Developers Plan Strike Following CEO Comments
Last week, Ubisoft canceled a number of games in development in a pivot back toward its primary franchises. In an email to staff, Ubisoft CEO Yves Guillemot told staff that the responsibility for the publisher's stumbles was the fault of the staff. "The ball is in your court to deliver this line-up on time and at the expected level of quality, and show everyone what we are capable of achieving," he wrote in an email to staff obtained by Kotaku.
These statements were not welcomed by the staff, who pointed toward poor management as the reason for Ubisoft's problems. French union Solidaires Informatique called for a half-day strike at Ubisoft Paris in response, which let Guillemot know that he stepped in it. The CEO addressed his earlier comments in an all-hands meeting on Wednesday, according to a report from Kotaku.
"I heard your feedback and I’m sorry this was perceived that way. When saying ‘the ball is in your court’ to deliver our lineup on time and at the expected level of quality, I wanted to convey the idea that more than ever I need your talent and energy to make it happen. This is a collective journey that starts of course with myself and with the leadership team to create the conditions for all of us to succeed together," said Guillemot during the meeting.
Why It's Worth Knowing: It's interesting that Guillemot backed down that quickly, but I guess it's hard to turn around a sinking ship if the crew is in the middle of a mutiny. Ubisoft needs wins in the bucket and the only notable one on the near-term horizon is perhaps Assassin's Creed Mirage.
Former 343 Employees Call Out Microsoft Over Poor Management
As a part of the Microsoft layoffs (see below), 343 Industries is also losing staff members, likely causing a slight pivot in Halo: Infinite's ongoing development. In response to the layoffs, a few former 343 Industries employees called out Microsoft as the problem.
"The layoffs at 343 shouldn't have happened and Halo: Infinite should be in a better state. The reason for both of those things is incompetent leadership up top during Halo: Infinite development causing massive stress on those working hard to make Halo the best it can be," tweeted former Halo: Infinite senior multiplayer designer Patrick Wren, who is currently at Respawn.
"As a Halo fan I'm really tired of Microsoft business practices and policies slowly killing the thing I love," added Tyler Owens, former Studios Operations at 343 Industries. (Also now at Respawn.) "Between the contracting policies they abuse for tax incentives and layoffs in the face of gigantic profits/executive bonuses... they set Halo up for failure."
Why It's Worth Knowing: I've mentioned this before, but there's… something wrong over at Microsoft. The company has made a number of acquisitions over the years and it's trying to acquire Activision-Blizzard at the moment, but things aren't really paying off at the company.
Halo: Infinite launched in a poor state and it has yet to really recover. Forza Horizon just lost a number of veteran staff to a new studio. Undead Labs' State of Decay 3 has seen heavy delays. The Coalition is dead silent in terms of development. The Initiative had to partner with Crystal Dynamics for the Perfect Dark reboot, and that title still lacks even a release window. Xbox Games is just struggling to get wins out the door.
2023 will help with Redfall and Starfield, but both games are from ZeniMax, which was only acquired by Microsoft in 20213. (Read: Likely after those games were put into development.) Still, it seems like Microsoft as a whole is poorly managing all of these studios. I want to stress, this is only perception, not necessarily fact. But Nintendo and Sony are eating Microsoft's lunch at the moment, especially in terms of first-party efforts.
Microsoft Will Likely Get an EU Antitrust Warning Over the Activision-Blizzard Deal
According to Reuters, the European Commission is preparing a statement of objections to the Microsoft acquisition of Activision-Blizzard. This is separate from Microsoft's struggles with the Federal Trade Commission (FTC) and UK Competition & Markets Authority (CMA). The European Commission's deadline for its decision is April 11.
"We're continuing to work with the European Commission to address any marketplace concerns. Our goal is to bring more games to more people, and this deal will further that goal," Microsoft said in a statement to Reuters. Microsoft will likely offer a series of concessions to get the deal pushed through in the EU.
European Parliament Votes To Address Loot Boxes, Gaming Addiction, and More
Speaking of the European Commission, Gamesindustry.biz reports that the European Parliament voted on Wednesday to adopt a report from MEP Adriana Maldonado López focused on the video game market. The Parliament voted to have the European Commission look into a number of issues, including loot boxes, gold-farming, gaming disorder, and more.
"Our report highlights the positives of this pioneering industry, but also social risks we need to bear in mind, like the impact of gaming on mental health," said López. "This is something that can particularly affect younger gamers. We need to harmonize EU rules, ensuring strengthened consumer protection and with a specific focus on minors."
Why It's Worth Knowing: Companies don't like to operate under a ton of different rules worldwide. If one major region forces a change, then that change will likely be reflected elsewhere. As an example, Apple will eventually switch its iPhones over to USB-C after the European Union mandated that all phones sold in its countries use the standard socket. If harder legislation over loot boxes comes down the pipeline in the EU, many publishers would potentially follow suit in other regions.
Crystal Dynamics Ends Support of Marvel's Avengers
It seems the Avengers will be disassembled. When Embracer Group acquired Crystal Dynamics, Eidos Montreal, and the now-defunct Square Enix Montreal, one of my major questions was, "So what's going to happen with Marvel's Avengers?" The game was developed with Square Enix as the publisher, so I was wondering if the rights went with Crystal Dynamics or if Square Enix would keep them while paying Crystal Dynamics for further support. Today, we got an answer that essentially says, "It doesn't matter."
Following some rumors released earlier on Friday, Crystal Dynamics announced that support for Marvel's Avengers would be ending this year. The last bit of new content will come on March 31, 2023 with Update 2.8, and all official support will end on September 30, 2023. The game's cosmetics store will be shutting down in March and all the cosmetics in the store will be free for all players.
Single-player and online multiplayer will remain live after support ends, but it is a sad ending to Square Enix and Crystal Dynamics' "Avengers Project." The rumor I mentioned earlier pointed to Crystal Dynamics wanting to move resources to the new Tomb Raider game, alongside the recent demotion of Avengers lead developer Brian Waggoner over past racist tweets.
Tech ⌨️
AI's Legal Battles Begin in Earnest
AIgenerated content is the current wave of the future, but creators and organizations are increasingly worried about the art and writing used to train these models in the first place. This week marked a pair of lawsuits, both against Stability AI, the folks behind Stable Diffusion.
The first lawsuit comes from Getty Images, who allege that Stability AI has infringed upon the company's intellectual property. Getty states that Stability AI unlawfully copied its images for training its model. The company doesn't have a problem with the concept of using its images for training, but it licenses them for the purpose. "Stability AI did not seek any such license from Getty Images and instead, we believe, chose to ignore viable licensing options and long‑standing legal protections in pursuit of their stand‑alone commercial interests," said the company in its press release.
“We think similarly these generative models need to address the intellectual property rights of others, that’s the crux of it,” Getty Images CEO Craig Peters told The Verge. “And we’re taking this action to get clarity.”
The second lawsuit comes from the artists themselves. Sarah Andersen, Kelly McKernan, and Karla Ortiz are at the head of a class-action lawsuit, stating that Stability AI, DeviantArt, and Midjourney remixed copyrighted work with their use of Stable Diffusion. The class-action complaint describes the AI-generated work as a commercial threat to the livelihood of these artists.
"These resulting derived images compete in the marketplace with the original images. Until now, when a purchaser seeks a new image 'in the style' of a given artist, they must pay to commission or license an original image from that artist," says the complaint. "Now, those purchasers can use the artist’s works contained in Stable Diffusion along with the artist’s name to generate new works in the artist’s style without compensating the artist at all."
Much of the legal team representing this class-action are also currently suing Microsoft, GitHub, and OpenAI over the Copilot tool, which generates working code based on prompts. In that case, the lawsuit states that Copilot is based on code posted to GitHub without attributing the original programmers, which violates many open-source licenses.
Why It's Worth Knowing: As Ortiz acknowledged on Twitter, there is currently no legal precedent for AI's use of existing work. These cases are the first step into exploring the legality of a growing market, especially given that major organizations are ready to jump in head first. Microsoft is investing heavily in OpenAI, CNET is already publishing articles written or updated by AI, and Google is scrambling to add its AI projects into the mix. (The latter two linked stories are well worth the read.) Things are changing and changing quickly. If creators want any protections, they have to get on the ball early.
The Shout-Out: The New York Times has a story about how universities are planning to tackle the issue of students creating work with tools like ChatGPT readily available. Also Time has a story about how OpenAI is using cheap Kenyan labor to curb ChatGPT's propensity to offer racist, sexist, and increasingly violent statements.
Apple Announces M2 Pro and M2 Max MacBook Pros as Rumors Abound
Apple kicked off the week confirming one rumor with the announcement of new MacBook Pros powered by the M2 Pro and M2 Max chips. The 14-inch MacBook Pro with M2 Pro starts at $1,999, while the 16-inch model has a low-end of $2,499. Both laptops are available for order right now, with shipping and retail sales starting on January 24.
The person who reported on the rumored MacBook Pro refresh was Bloomberg's Mark Gurman, who offered a pair of additional Apple rumors this week. First up, Gurman says that Apple's cheaper, more consumer-friendly augmented reality glasses project has been put on hold indefinitely. These AR glasses are meant to follow-up the more expensive Reality Pro/Reality One mixed reality headset, which is expected to release this year. While the headset is expected to cost in the $2,000-$3,000 range, the glasses were aiming at around $1,500. Sadly, technical challenges have Apple focusing on the product they can actually ship.
The second report came on Sunday, following Gurman's earlier hints last week: Apple is working on touchscreen MacBooks. The first product is reportedly a touchscreen MacBook Pro coming in 2025. Assuming the public likes the device, then touchscreens could come to Apple's other laptops. Gurman says the addition of touchscreens is meant to bring macOS and iOS a bit closer together, allowing Apple to make a single set of software for both platforms.
Why It's Worth Knowing: Gurman does not miss, as the Apple equivalent of The Verge's Tom Warren for Windows. If he says these products are happening, it's near gospel. It's a shame that the cheaper AR glasses have hit a snag even for Apple, as I feel the company is well-positioned to bring mixed reality to the masses. Unfortunately, a $3,000 mixed reality headset isn't the right move in that direction; I'm sure it'll sell, but the average consumer likely isn't buying one. Hopefully, Apple can get the consumer-friendly product back on track, or scale down the Reality One into a cheaper form factor.
This Week In Twitter: Twitter Bans Third-Party Clients As Elon Auctions Office Equipment
On Wednesday, Twitter held a fire sale at its San Francisco headquarters. Heritage Global Partners ran the auction, which included office equipment, kitchen equipment, and even a larger Twitter logo statue. It's unlikely that the proceeds of the sale add up to $300 million debt payment that's looming over owner Elon Musk.
The company also changed its developer agreement to cut off all third-party Twitter clients. The new language, noticed by Engadget, states that "use or access of the Licensed Materials to create or attempt to create a substitute or similar service or product to the Twitter Applications" using the Twitter API is now restricted. This means developers are shutting down long-running applications like Twitterrific, Tweetbot, and Fenix.
"We are sorry to say that the app’s sudden and undignified demise is due to an unannounced and undocumented policy change by an increasingly capricious Twitter – a Twitter that we no longer recognize as trustworthy nor want to work with any longer," wrote Twitterrific developer Sean Heber.
Twitter's own additional app, TweetDeck, hasn't really been updated for a long time. There was a new version of TweetDeck in testing last year with more updates "coming soon," but the official TweetDeck account hasn't been updated since then. It seems updating the client isn't a high priority for Musk's Twitter. At least it still works.
The Shout-Out: The Verge and New York Magazine have jointly reported on the culture inside Musk's new "hardcore" Twitter.
Film, Television, and Streaming 🎞️
Netflix Co-Founder and CEO Reed Hastings Steps Down
Reed Hastings has been with Netflix from the beginning, co-founding the original DVD-by-mail company with Marc Randolph in 1997. Randolph was the company's first CEO, but he relinquished the position to Hastings only two years later, leaving the company entirely in 2002. Since then, Hastings has run Netflix as its CEO.
That tenure will be ending soon as Hastings announced that he'll be stepping down as CEO. He will remain with the company as Executive Chairman. According to Hastings, this transition plan has been in place for some time, with Ted Sarandos becoming co-CEO in 2020. Netflix COO Greg Peters has been promoted to become Sarandos' new co-CEO. During an investors call, the pair signaled that not much would be changing within Netflix near-term.
"There's no big strategy shift or big culture shifts. We don't have a bank of changes that were -- that we've been holding for this moment. So mostly, it's continuity and moving forward," said Peters.
This news came alongside the company's fourth quarter financial earnings report, which showed that the streaming service added nearly 7.7 million subscribers during the quarter. That number is way above the 4.5 million subscribers Netflix estimated, allowing Hastings to go out on a high note.
Why It's Worth Knowing: Netflix has changed Hollywood entirely. It was the first major proponent of streaming. Its lucrative deals and hands-off policy was a boon to creative talent when it moved into original programming. All of the major players followed, even if most haven't caught Netflix yet. Those good times are over. It's possible that Netflix was planning for poor economic headwinds, but it's also possible that Sarandos was pushing more of his point-of-view at the streaming service. Regardless, there are new captains at the helm. Let's see what Netflix becomes in five years.
Superhero Watch: China Lets Marvel Back Into the Box Office
It's been a long time since a Marvel Studios film got a release in China. The last full Marvel Studios film released in the region was Avengers: Endgame, followed by the Sony Pictures release of Spider-Man: Far From Home. There was no direct reason given by Chinese regulators, but it seemed that Marvel wasn't welcome in their box office for whatever reason.
It seems the blockade is at an end. According to Deadline, Black Panther: Wakanda Forever and Ant-Man and The Wasp: Quantumania. Will both get Chinese releases this year. That's a good financial prospect for Marvel Studios, as Disney did release Avatar: The Way of Water in the region, making a total of $229 million there to date. I doubt either Marvel film will perform that well, but an extra $100 million is nothing to scoff at.
Layoffs 👷
Yes, this is pretty depressing. There were so many layoff stories this week across multiple industries that I needed to make this its own section. Estimates by the Washington Post point to the tech layoffs hitting around 200,000 in total across all companies in later 2022 and early 2023.
As a part of these stories, I'll also be listing the recent financial performance of the companies involved. Why? Because many of these layoffs are driven by a recessionary financial environment that might happen, not one that's reflected by the companies themselves. Yes, income might be down, but that's against a boosted 2021. And one could argue that laying off thousands will likely contribute to the poor economic environment.
Microsoft Lays Off 10,000 Workers Across All Divisions
In the middle of the week, Microsoft laid off 10,000 employees, or around 4.5% of its overall workforce. The cuts came in nearly every division, including software, hardware, and the gaming teams. The company will also cut costs elsewhere, like consolidating office leases around the world.
In an interview at Davos 2023, the get-together for the richest, most powerful folks in the world, CEO Satya Nadella shared many of the same statements as other CEOs during the season of layoffs. He noted that spending went up during the pandemic, so many corporations hired big. Now, though, customers aren't spending as much, so companies are worried they have too many folks on staff.
"When I think about this moment in time, the start of 2023, it’s showtime – for our industry and for Microsoft," said Nadella in a message to staff about the layoffs. "That means every one of us and every team across the company must raise the bar and perform better than the competition to deliver meaningful innovation that customers, communities, and countries can truly benefit from."
In Microsoft's last earnings report, for the first quarter of fiscal year 2023, the company's revenue was up 11% year-over-year to $50.1 billion. Net income was $17.6 billion, down only 14% year-over-year. Microsoft also completed a share buyback of $7.8 billion for the last quarter of fiscal year 2022, matching the previous quarter.
Google Cuts 12,000 Jobs in The Largest Set of Layoffs In Company History
On Friday, Alphabet and Google CEO Sundar Pichai announced that the company was reducing its headcount by 12,000, representing around 6% of its current workforce. The same song and dance about the pandemic was seen in the CEO's message to his employees.
"Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today," wrote Pichai. Like Nadella, Google's CEO also stated that the company will grow its efforts in regard to AI.
In Alphabet's last earnings report, for the third quarter of 2022, revenue was up 6% year-over-year to $69.1 billion. Net income was $13.9 billion, which was down year-over-year compared to $18.9 billion in the same quarter last year.
Amazon Begins Cutting 18,000 Employees
I mentioned these layoffs in the first Stuff Worth Knowing of 2023, with Amazon cutting 18,000 employees in its workforce. Those cuts began in earnest this week, hitting Amazon's retail divisions pretty hard. (As part of these layoffs, Comixology was cut to the bone.)
In a message to employees obtained by Recode journalist Jason Del Rey, you hear many of the same statements. "During Covid, our first priority was scaling to meet the needs of our customers while ensuring the safety of our employees," wrote Amazon retail CEO Doug Herrington. "As we head into 2023, we remain in uncertain economic times. Therefore, we've determined that we need to take further steps to improve our cost structure so we can keep investing in the customer experience that attracts customers to Amazon and grows our business."
Amazon's net sales for the third quarter of 2022 increased 15% to $127.1 billion. Net income was down slightly to $2.9 billion, compared to $3.2 billion in the same quarter last year.
Fandom Cuts 40 to 50 Employees At Giant Bomb, GameSpot, and More
This one is here because it's close to home and many of these outlets have a far smaller overall workforce. Only four months after acquiring a number of sites from Red Ventures, Fandom is making cuts to the staff. The sites acquired included GameSpot, GiantBomb, Metacritic, GameFAQs, Comic Vine, TV Guide, Giant Bomb, and Cord Cutters News. Of those, layoffs were reported at GameSpot, Giant Bomb, TV Guide, and Metacritic. Fandom has made no statements on the layoffs at all.
Fandom is owned by TPG Inc., a private equity firm. Its CEO, Jon Winkelried, made over $80 million in 2021. One wonders if that's actually on the low-end for the former Goldman Sachs Group partner and co-president.
On My Mind 🧠
Tesla Director of Software Says Autopilot Demo Video Was Staged: One of the early videos showing Tesla's self-driving Autopilot was actually faked, according to Tesla Director of Software Ashok Elluswamy in a deposition related to the death of Wei Huang, who died in 2018 in an Autopilot accident. Apparently, the car was not only running a previously-mapped sequence on a predetermined track, it actually crashed during filming.
From a transcript obtained by The Verge:
Q. And am I correct that in connection with the effort to create this video, the Tesla that was used in the video actually crashed?
A. Yes.
A: In this video, it was using additional premapped information to drive, yes.
The Night Court Reboot Posts Big Numbers For NBC: The reboot of Night Court, the 1980s court-based comedy, apparently found a strong audience in its premiere this week. It pulled in 8 million total viewers, giving NBC a strong win, according to Deadline.
"To see Night Court wholeheartedly embraced by the audiences is a testament to how beloved the show remains as a cultural touchstone," said Lisa Katz, President, Scripted Content, NBCUniversal Television and Streaming. "These success stories once again prove the staying power and popularity of broadcast and we look forward to seeing our two upcoming and critically applauded second-year comedies – American Auto and Grand Crew – also finding similar traction."
I didn't know audiences were clamoring for the return of Night Court, but numbers don't lie.