Stuff Worth Knowing for the Week of April 24, 2023
Epic loses to Apple again, the CMA blocks Microsoft's acquisition, and Netflix invests in South Korea and the UK.
Welcome back to Stuff Worth Knowing! Each week, I'll round up news related to tech, video games, film, television, anime, and more. I’ll probably also start using Substack for more short-form thoughts once Substack Notes launches. At the same time, I’m going to be using my Patreon, SavePhile, more often.
Tech ⌨️
Epic’s Appeal Against The Apple App Store Rulings Fails
Epic Games has taken it on the chin once again. Way back in 2020, Epic Games tried to circumvent the microtransaction payment rule on the Apple App Store, which led Apple to cancel Epic Games’ developer account and delist Fortnite. It then sued Apple, calling the App Store a monopoly. Epic lost that case with nine of its claims going in Apple’s favor.
Epic appealed the ruling and this week, United States District Judge Yvonne Gonzalez Rogers found in favor of Apple once again. The only thing that changed is that Judge Gonzalez Rogers reversed the ruling involving attorney fees; Epic might now have to pay Apple’s attorney fees. Apple states that it may review the final claim that Epic won, focused on “anti-steering”, where Apple blocks developers from linking to alternate payment platforms from within iOS apps.
“Today’s decision reaffirms Apple’s resounding victory in this case, with nine of ten claims having been decided in Apple’s favor,” said Apple in a statement obtained by TechCrunch. “For the second time in two years, a federal court has ruled that Apple abides by antitrust laws at the state and federal levels. The App Store continues to promote competition, drive innovation, and expand opportunity, and we’re proud of its profound contributions to both users and developers around the world. We respectfully disagree with the court’s ruling on the one remaining claim under state law and are considering further review.”
Why It's Worth Knowing: Well, there was one company big and brazen enough to challenge Apple’s walled garden and it just got defeated in court a second time. The App Store cut is the law of the land, and there’s no chance of it getting slapped down in the future. And Apple’s hoping to win the last claim as well, preventing developers from linking to payment platforms outside of iOS.
Of course, in the intervening years, Epic Games has somewhat gotten what it wants regardless of its own actions. The European Union’s Digital Markets Act is forcing Apple to add side-loading and third-party app stores to iOS. (Something the Biden administration agrees with.) According to Bloomberg’s Mark Gurman, Apple is looking to comply by allowing sideloading in iOS 17 next year. So it’s a win all around as Epic loses and in the end, Apple loses too.
U.S. Senate Introduces Bill To Prohibit Kids Under 13 From Joining Social Media
This week, a bipartisan group of United States Senators introduced the Protecting Kids on Social Media Act. The bill would require social media platforms like Twitter, Instagram, Facebook, and TikTok to improve age verification and prevent any accounts that haven’t been age verified.
The aim of the age verification requirement is to prevent any children under the age of 13 from having a social media account without consent from a parent or guardian. In addition, the bill seeks to prevent the use of any algorithmic recommendation system for any minor under the age of 18.
Why It's Worth Knowing: Most social media app growth is built on the backs of young folks. Ever heard of Lemon8? It’s a new social media platform related to TikTok that’s quickly growing despite not having a full push in the United States. The bill could make it much harder for new platforms to grow. Is that a good thing? Probably. I’m not a parent, but requiring parental consent does seem to be a good idea in some fashion. Some are just bristling against that lever coming from the government rather than the companies themselves.
This Week in Twitter: Blue Replaced By Bluesky?
Last week, Twitter removed its legacy verification, requiring all users to verify through a Twitter Blue subscription. Many simply decided not to pay, going sans checkmark. For Twitter, the problem was many of those accounts are for celebrities and figures with considerable followings; if they aren’t paying for Twitter Blue, it makes the service look bad. Elon decided to fix this by paying for the Twitter Blue subscriptions of notable figures out of his own pocket.
There were two problems with this move. The first is that Twitter seemed to do this based purely on follower count, meaning accounts for dead famous people—Chadwick Boseman, Kobe Bryant, Barbara Walters, Anthony Bourdain, and journalist Jamal Khashoggi among them—are listed as paying for Twitter Blue despite the people not being alive anymore.
The second is that some have noted that Twitter may run afoul of federal law prohibiting false advertising and endorsement. Twitter Blue’s default message says that the user is subscribed, despite users like LeBron James and Stephen King stating that they have not.
“What Musk is doing in paying for some celebrities to retain a blue tick can be considered as an unfair or deceptive practice because it creates an impression to the public—including consumers—that these specific celebrities are endorsing Twitter’s business models,” says Catalina Goanta, associate professor in law, economics, and governance at Utrecht University School of Law told Wired.
As Twitter continues to step on rakes, Bluesky Social is starting to hit a fever pitch, despite being invite only. The new social media service is from Twitter founder Jack Dorsey. Its biggest hook is being decentralized, similar to Mastodon, but it also happens to look a lot like Twitter, handing it a good amount of inherent trust. (It’s odd to say that.) Prominent Twitter users have started to move over to the platform, including Dril himself.
As Bluesky grows, Dorsey admitted that perhaps it wasn’t in Twitter’s best interest to be sold to Musk. Back in April of last year, Dorsey tweeted that “Elon is the singular solution I trust [for the company].” This week on Bluesky, Dorsey walked back that statement.
“No. Nor do I think he acted right after realizing his timing was bad. Nor do I think the board should have forced the sale. It all went south,” Dorsey replied when asked about Musk’s ownership on Bluesky, via Business Insider. Dorsey said that Musk should’ve paid the $1 billion fee to walk away from the deal.
We could’ve told you that last year, Jack.
AI 🤖
OpenAI Nets More Venture Capital Funding
The company that has “open” in its name continues to close itself off as it turns to venture capital firms for funding. TechCrunch reports that a number of firms, including Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, and K2 Global are picking up shares in the company. The firms have put in around $300 million in funding, valuing the company at $27 – 29 billion. This comes after Microsoft’s $10 billion investment.
Why It's Worth Knowing: While a number of AI companies are spinning up, the venture capital firms backing OpenAI signal to the rest that “this is the one”. Business hates risk and having a sign post of “safety” is enticing to everyone.
Meta And Amazon Jump On The AI Train Just Before The Doors Close
If OpenAI stands at the front of the pack, existing companies Meta and Amazon are playing catch up. This week, both signaled that AI is in their future. During a Meta investor call for its first quarter financial results, CEO Mark Zuckerberg said that the company is looking to add AI to many of its services.
“I think there’s an opportunity to introduce AI agents to billions of people in ways that will be useful and meaningful,” said Zuckerberg in his opening statements to investors. “We’re exploring chat experiences in WhatsApp and Messenger, visual creation tools for posts in Facebook and Instagram and ads, and over time video and multi-modal experiences as well. I expect that these tools will be valuable for everyone from regular people to creators to businesses. For example, I expect that a lot of interest in AI agents for business messaging and customer support will come once we nail that experience.”
Likewise, Amazon also had to make the same affirmations to its investors. During the investors call for its own first quarter results, Amazon CEO Andy Jassy said that the company is looking to add improved AI capabilities to its Alexa platform.
“I think when people often ask us about Alexa, what we often share is that if we were just building a smart speaker, it would be a much smaller investment,” said Jassy in the earnings call. “But we have a vision, which we have conviction about that we want to build the world’s best personal assistant. And to do that, it’s difficult. It’s across a lot of domains and it’s a very broad surface area. However, if you think about the advent of Large Language Models and generative AI, it makes the underlying models that much more effective such that I think it really accelerates the possibility of building that world’s best personal assistant.”
Of course, the Alexa division of Amazon was one of the groups hit by recent layoffs. The Alexa division was one of the major loss leaders for the company in 2022. Despite that, Amazon did note that it was still “fully committed” to further Alexa hardware.
Why It's Worth Knowing: There are always trends that major companies have to let shareholders know they haven’t missed. For a while, that was the blockchain, but it seems that we’ve moved toward generative AI and chatbots. Most of these companies have dabbled in AI assistance, but with OpenAI taking names, they now have to increase their reliance on large language models (LLMs), even if they might not create a better experience for users.
EU Legislation May Force Companies To Disclose AI Training Data
The EU keeps making it happen. Earlier in the newsletter, I talked about the EU’s Digital Markets Act forcing Apple into side-loading, and now another act might force AI companies to disclose where they got their training data from. According to Reuters, the European Commission is finalizing its AI Act, which is meant to regulate the artificial intelligence industry.
This act includes classifying AI tools and requiring increased transparency depending on classification level. AI used for surveillance or law enforcement would require much greater transparency compared to a standard chatbot. A recent addition to the act is requiring companies to disclose all copyrighted material used in their training data. This is lighter than the proposed addition, which would have banned the use of copyrighted material in training data altogether.
Why It's Worth Knowing: The EU isn’t afraid to regulate tech and its regulations tend to get adopted in other regions, like Apple having to use USB-C ports or allowing side-loading on its devices. Adding these regulations on AI will allow creators of copyrighted works to see if OpenAI and others used their work directly.
Video Games 🎮
UK’s CMA Will Block Microsoft’s Acquisition of Activision-Blizzard
From feast to famine. While it looked like the UK’s Competition and Markets Authority (CMA) was leaning on Microsoft’s side in its planned acquisition of Activision-Blizzard, deciding that making Call of Duty Xbox exclusive wouldn’t happen, it seems there was another pain point. This week the CMA announced that it would oppose the deal, but over cloud gaming, not Call of Duty.
“Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service,” said the CMA in its press release. “The deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft. The evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future.”
The CMA is open to remedies from Microsoft, but after all the talk about Call of Duty, it’s surprising that Xbox Game Pass is the wall. Microsoft says that it will appeal, but that’ll take years. It’s more likely that Microsoft will have to figure out some UK-specific carve out for Xbox Game Pass and Activision-Blizzard games.
"We remain fully committed to this acquisition and will appeal. The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” said Microsoft vice chair and president Brad Smith in a statement, via Gamesindustry.biz.
Sony Sells 19 Million PlayStation 5 Systems in Fiscal Year 2022
While Microsoft is reeling, Sony is showing signs of strength in the console space. The company released its financial earnings report for the fourth fiscal quarter ended on March 31, 2023 and full fiscal year results. Notably, the company shipped 19 million PlayStation 5 systems during the fiscal year, one million higher than estimates. 6.3 million units were shipped in the fourth quarter, only slightly down from 7.1 million in the previous quarter.
According to Ampere Analysis analyst Piers Harding-Rolls, that’s some of the best first quarter (calendar-aligned) sales of any console, sitting higher than double than the PlayStation 4’s record for the time period. It’s a testament to the PS5 finally getting over supply issues.
In contrast, Microsoft hasn’t talked about Xbox Series sales at all.
Electronic Arts Agrees That Star Wars Jedi: Survivor’s PC Performance Is Bad
This week saw the release of Star Wars Jedi: Survivor, the new single-player Star Wars title from Electronic Arts and Respawn Entertainment. I’ve been playing it for review, so I’ll say it's a great game, but I played on PlayStation 5, not PC. Apparently on that platform, the performance is less than adequate; on Steam, the rating is “Mixed” probably because the game is good enough to overcome the terrible performance issues.
Electronic Arts has released a mea culpa on Twitter, acknowledging the issues. “We are aware that Star Wars Jedi: Survivor isn’t performing to our standards for a percentage of our PC players, in particular those with high-end machines or certain specific configurations,” said the statement.
Why It's Worth Knowing: This is less about the state of Star Wars Jedi: Survivor specifically. I wouldn’t call that news worthy of this newsletter. What’s interesting is the overall state of major PC ports. Sony just released The Last of Us Part I on PC to many of the same complaints. Wild Hearts, also published by EA, was another great game hamstrung by PC port issues. It’s an ongoing trend that’s only exacerbated by entirely-too-expensive PC parts like video cards; if you’re paying $700-1000 for a video card alone, you’re looking for the games to hit.
Film, Television, and Streaming 🎞️
Media Companies Cut Three Big Names In One Week: Carlson, Lemon, and Shell
Something was in the water at the major media companies this week. Three major figures at various networks found themselves out of a job. The first departure was NBCUniversal CEO Jeff Shell, who was bounced from the company on Sunday. Comcast kicked Shell out over a complaint of inappropriate conduct that he doesn’t dispute. (The employee in question called the conduct “sexual harassment and sex discrimination”.)
“Today is my last day as CEO of NBCUniversal,” Shell said. “I had an inappropriate relationship with a woman in the company, which I deeply regret. I’m truly sorry I let my Comcast and NBCUniversal colleagues down, they are the most talented people in the business and the opportunity to work with them for the last 10 years has been a privilege.”
On Monday, it was revealed that prime-time host Tucker Carlson was pushed out of Fox News. It was an abrupt firing, as Carlson signed off on Friday expecting to be back in the studio this week. According to the Los Angeles Times, Carlson was fired by Fox Corporation chairman Rupert Murdoch. Many believe that the firing is related to the $787 million Dominion settlement, but more heads would’ve been rolling at Fox if that was the case.
An hour later after finding out about Carlson, CNN anchor Don Lemon revealed that he had been fired from the network. “I am stunned. At no time was I ever given any indication that I would not be able to continue to do the work I have loved at the network,” Lemon said. CNN called his statement inaccurate on Twitter. Lemon has been under fire for misogynist comments made on his show, and a recent report by Variety outlined further sexist situations from the anchor.
Why It's Worth Knowing: These are huge figures getting punted to the curb. Shell is responsible for NBCUniversal's recent push into streaming with Peacock and other moves within Comcast. Tucker Carlson is one of the biggest political media personalities, and Don Lemon has been with CNN since 2014. Carlson and Lemon have both hired the same lawyer who previously represented Chris Cuomo and Megyn Kelly in their media exits, but regardless of those outcomes one wonders what faces will fill those spots at their respective networks. One can only hope the replacements will be better, but that’s unlikely.
WGA Contract Expires on May 1
This is less a news item and more something to keep in mind. The Writers Guild of America’s current contract expires on May 1 and there currently isn’t a new contract, meaning the writers will likely be striking starting Tuesday.
Netflix Looks Toward More International Content From South Korea And The UK
Netflix is leaning more on international content now as it looks for growth. This week, the streaming company announced that it is planning to invest a ton in two regions: South Korea and the United Kingdom.
First was the announcement that Netflix is investing $2.5 billion in content from South Korea. This makes sense because a number of Netflix’ television hits like Squid Game, The Glory, Physical 100, and more came from the region. The $2.5 billion is double what the company has spent since 2016, and will be spent over the next four years.
Likewise, Netflix will be investing $6 billion in the United Kingdom over the next four years. According to Netflix Vice President of Content for the UK Anne Mensah, that’s “an increase of nearly 50% on what we originally anticipated.” The streamer’s previous wins in the region include The Crown, Sex Education, and Heartstopper.
Why It's Worth Knowing: Netflix is still looking for growth, and part of that growth is coming from international markets. Not only does local content play better at home, but Netflix has found that international shows actually can work worldwide. It also helps the streamer reach localized content rules in Europe. Netflix is also looking into other regions for growth, including India, Japan, Indonesia, Philippines, and Thailand. (I’d expect that Mexico is another region that the company will capitalize on.)
Video Game Watch: Mario Crosses $1 Billion, Street Fighter Gets Directors
It looks like The Super Mario Bros. Movie will cross $1 billion worldwide this weekend. Everyone is rushing to get their own gaming projects off the ground and on the air. According to The Hollywood Reporter, Talk to Me directors Danny and Michael Philippou are in talks to direct Legendary’s adaptation of Street Fighter. That’s a slight move from horror to action for the pair, but it suggests that Legendary is moving quickly; its acquisition of the rights was only announced earlier this month.
As an example of “license everything”, this week it was revealed that indie game Vampire Survivors is going to get a television series. Story Kitchen, a media company founded by John Wick creator Derek Kolstad, will be adapting the series. According to Deadline, the pitch is “Vox Machina meets Castlevania” despite Vampire Survivors not really having a story. Story Kitchen is also working on an adaptation of Sifu.
Finally, Peacock showed off a teaser trailer for Twisted Metal, its adaptation of the PlayStation series of the same name. The teaser showed off very little outside of lead actor Anthony Mackie, a car with guns on it, and Sweet Tooth from the game. It’s notable as the Twisted Metal series hasn’t had a release since the reboot title in 2012.
Looking forward to the Gex and Klonoa adaptations soon.
Layoffs 👷
IDW Lays Off 40% Of Staff And Delists Stock
Comic publisher IDW Media Holdings has fallen on very hard times. This week, the company cut 39% of its workforce and replaced its CEO with executive chairman Davidi Jonas, son of Chairman of the Board Howard Janos. IDW is known for its licensed comics, including Teenage Mutant Ninja Turtles, Star Trek, Dungeons & Dragons, and Godzilla.
Unfortunately, IDW has also been hemorrhaging money for some time now; in its last earnings report, the company posted a net loss of $2 million, down from a net income of $1.9 million the same quarter last year. Revenue also dropped from $11.8 million in the first quarter of 2022, down to $6.6 million in Q1 2023.
Dropbox Lays Off 16% Of Employees As It Pivots Towards AI
On Thursday, Dropbox announced that it was laying off 500 employees, or around 16% of its workforce. The news came from an employee memo from CEO Drew Houston. Houston noted that Dropbox has remained profitable, but profits aren’t enough for business. Growth is needed.
“First, while our business is profitable, our growth has been slowing. Part of this is due to the natural maturation of our existing businesses, but more recently, headwinds from the economic downturn have put pressure on our customers and, in turn, on our business. As a result, some investments that used to deliver positive returns are no longer sustainable,” Houston wrote.
Instead, Dropbox will shift its resources toward AI. “Second, and more consequentially, the AI era of computing has finally arrived. We’ve believed for many years that AI will give us new superpowers and completely transform knowledge work,” said Houston. “And we’ve been building towards this future for a long time, as this year’s product pipeline will demonstrate.”
For its last earnings report, Dropbox revenue was up 5.9% to $598.8 million. Net income nearly doubled, up to $328 million, versus $124 million in the same period last year. Not a really great reason to lay off 500 people.
On My Mind 🧠
Wizards of the Coast Send Pinkerton Investigators To Retrieve Magic Cards: Last week, YouTube creators OldSchoolMTG opened a set of Magic: The Gathering cards from the set March of the Machine: The Aftermath. Unfortunately for him, the set wasn’t meant for release until May 12. Apparently, according to the creator and confirmed by Polygon, Wizards sent the current Pinkerton agency to retrieve the sets.
Wizards gave a statement on the matter to Polygon:
As part of an investigation into the unauthorized distribution and disclosure of embargoed product, we repeatedly attempted to contact an individual who had received unreleased cards. After that outreach was unsuccessful, an investigator visited him and asked that he reach out to us as part of our investigation and return the embargoed product and packaging. He agreed to do both. The unreleased product will be replaced by us with the product he intended to purchase. We appreciate the individual’s cooperation and the investigation is ongoing.
Some folks were surprised to find out the Pinkertons still exist. Not only does the Pinkerton company still exist, it even has a new modern logo!
Ghosted Director Dexter Fletcher On The Difference Between Streaming Films: Dexter Fletcher, the director behind the Apple TV+ film Ghosted, talked on a recent podcast about the difference between making films for theatrical and streaming releases. Fletcher, who directed 2019’s Rocketman, talked about a scene he planned for the film, but Apple forced him to cut.
You can’t make a film for streaming the same way you do for theatrical. There are different metrics and approaches. There has to be, for the very reason that people can turn off very quickly.
I thought it was great, this three-minute opening scene, and they said you can’t do it because if it [the opening sequence] goes on and something doesn’t happen in the first 30 seconds, we know the data shows that people will just turn off. I don’t want that, so I make the compromise.
Honkai: Star Rail Surpasses 20 Million Downloads: Hoyoverse, the company previously known as MiHoYo, released its latest game this week. Honkai: Star Rail is the latest game in the Honkai Impact series, and the follow-up to Hoyoverse’s best-selling Genshin Impact. The name precedes itself, as Honkai: Star Rail reached 20 million downloads within 24 hours, according to the company. That’s a lot of microtransactions.