Stuff Worth Knowing for the Week of February 6, 2023
This week, Google and Microsoft have an AI battle, Disney+ loses subscribers, and Twitter has an outage.
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.
Two weeks ago, we had a Layoffs category. Last week we had an AI category. This week, we have both!
Video Games 🎮
UK's CMA Finds Microsoft's Acquisition Of Activision-Blizzard Could Reduce Competition
The UK's Competition and Markets Authority (CMA) has released its provisional report on Microsoft's potential acquisition of Activision-Blizzard. The news is not great for the merger. "We provisionally found competition concerns in the markets for gaming consoles and cloud gaming services in the UK," said the CMA in the report. As expected, the juggernaut that is Call of Duty is the primary concern of the CMA, as the organization believes Microsoft will eventually make the series Xbox exclusive.
The CMA also offered a list of potential remedies that would allow Microsoft to proceed with the merger. These remedies include:
Selling Call of Duty
Selling the Activision side
Selling the Activision and Blizzard sides
It's doubtful that Microsoft will find any of these remedies worthwhile. Instead, the company believes its 10-year licensing deal with Sony is the way forward.
"We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns. Our commitment to grant long term 100% equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers and increases competition in the market. 75% of respondents to the CMA‘s public consultation agree that this deal is good for competition in UK gaming," said Microsoft’s Corporate Vice President and Deputy General Counsel Rima Alaily said in a statement.
Activision-Blizzard CEO Bobby Kotick shot back at the CMA on the same day as the provisional report. "Well, if you look at the UK and you think about post-Brexit UK, it's probably the first country where you're seeing a recession and the real, severe consequences of a recession," Kotick said in a CNBC interview (via Gamesindustry.biz). "[UK Prime Minister] Rishi Sunak has said they'd like to be the Silicon Valley of Europe or of the continent, and if deals like this can't get through, they're not going to be Silicon Valley, they'll be Death Valley."
Microsoft is also fighting for the merger in the EU and US. As part of the Federal Trade Commision (FTC) lawsuit attempting to block the merger, Microsoft is apparently using discovery to obtain information about Sony's executives. According to Axios, Sony says that "Microsoft’s demand for performance reviews for SIE’s leadership is obvious harassment."
Tech ⌨️
This Week in Twitter: Twitter Experiences Its First Real Service Outage
On Wednesday, all of the changes made since Elon Musk took control of the company were finally felt in the site's service. Ahead of the Nintendo Direct at 5pm EST, users found themselves unable to tweet, with an error message stating, "You are over the daily limit for sending Tweets."
"Twitter may not be working as expected for some of you. Sorry for the trouble. We're aware and working to get this fixed," said the official Twitter Support account. The issues persisted for just over an hour.
Of course, one can point to Musk getting rid of a large chunk of the engineering staff and downsizing Twitter's data center infrastructure as a big reason behind this recent outage. Following the outage, Musk told employees to pause active development, according to an email obtained by The Information. "Please pause for now on new feature development in favor of maximizing system stability and robustness, especially with the Super Bowl coming up," Musk said in the email.
What followed after the outage was a Platformer story about Musk firing an engineer for pointing out that his Twitter engagements are low because he's not interesting anymore. "This is ridiculous. I have more than 100 million followers, and I’m only getting tens of thousands of impressions," Musk told staff at a meeting. When an engineer pointed out that Google Trends also showed less interest, Musk told him, "You're fired." (The rest of the story also offers details about the outage.)
AI 🤖
A lot of AI stuff happened this week, as the AI War begins in earnest. Honestly, I need to come up with something better than “The AI War”.
Google Launches Bard, But Makes Several Mistakes
Google has been caught flat-footed when it comes to AI. The company has been working on the technology for years, and it even offered up the Transformer model that forms a part of ChatGPT. (It's the "T".) But this week saw the company rush its own AI chat bot, Bard, out the door.
It began on Monday, when Google CEO Sundar Pichai announced Bard. Previously rumored to be called Apprentice Bard, a conversational AI service powered by Google's LaMDA, Bard sounded like the answer to Google’s woes. Pichai talked about bringing Bard's capabilities to all of Google's services, starting with Search.
Unfortunately, this announcement featured an animated image of Bard's capabilities, answering a question about the James Webb Space Telescope. Unfortunately, the answers in the image were wrong, with one bullet point stating that the JWST "took the very first pictures of a planet outside of our own solar system." Astrophysicist Grant Tremblay was the first to point out the error on Twitter and he was followed by several other scientists.
This error was followed by a haphazard event in Paris, where Google really failed to offer anything on the AI front outside of Bard coming to Search. There was also supposed to be a live mobile demo of new Google Lens features. Unfortunately, the phone in question wasn't there at the event. Not a huge problem, but combined with the Bard error, it painted a picture of a company that wasn't prepared.
Google lost $120 million in market value on Wednesday, following reports about Bard's error and the Google event. Of course, Tremblay himself and others have noted that ChatGPT also makes similar factual errors, but proper marketing spin is what makes investors giddy. In contrast to Google…
Microsoft Integrates ChatGPT Into Bing, Word, PowerPoint, and More
Microsoft announced its Bing ChatGPT event on Monday as well, mere minutes after Google announced Bard for the first time. On Tuesday, the company revealed a new version of Bing. This iteration of the search engine will offer AI-powered details next to traditional search results. Microsoft launched new Bing on Tuesday, with a limited number of users and a long waitlist. (Alternatively, you can use the Bing app to jump ahead on the waitlist.)
The company also added ChatGPT features to its Edge browser. The browser, which you can try at Microsoft Edge Insider, adds new sections called Chat, Compose, and Insights. Chat is the standard chatbot, Compose helps users create new content, and Insights gives new information about the current page you're on.
The Verge took a look at the new Bing and came away impressed, but also noted errors immediately. "But much like ChatGPT, Bing is not always accurate. I asked for the latest information on the devastating earthquake that hit Turkey and Syria this week, and it provided data pegged to a date in the future. It wasn’t a time zone issue, and the article that Bing had sourced the date to was written on the correct day and not in the future," wrote The Verge's Tom Warren.
Later in the week, The Verge reported that Microsoft is testing OpenAI's technology on all of its apps, including Word, Outlook, PowerPoint, and other services. ChatGPT and other similar services will be a strong backbone of Microsoft’s products. Why else would the company invest $10 billion in OpenAI?
In an interview with The Verge, Microsoft CEO Satya Nadella was somewhat cagey about how the new Bing will affect the websites that the AI sources for its information. If you get the answer in Bing, what will convince you to click through to the article that provided the information in the first place? I'm quoting this entire section of nonsense:
Look, at the end of the day, search is about fair use. Ultimately, we only get to use [all of this content] inside of a search engine if we’re generating traffic for the people who create it. And so, that’s why, if you look at whether it’s in the answer, whether it’s in chat, these are just a different way to represent the 10 blue links more in the context of what the user wants. So the core measure, even what SEO looks like, if anything, that’ll be the thing in the next multiple years [that] we’ll all learn. Perhaps there will be new incentives in SEO to even generate more authoritative content that then gets in. So overall, everything you saw there had annotations. Everything was linkable, and that’ll be the goal — whether it’s inside a search, in the answer, or even in the chat session.
Today, if you look at the search category, it’s great. It works 50 percent of the time. It doesn’t work for the other 50 percent of the time. So I think what I really want to do is to go back and say, “Look, is there some new powerful technology that can make search a better product without fundamentally changing how search gets permission to even exist as a product, which is other people’s content organized in useful ways so that users can find them.” To me, that is the category. And so, we will live and die by our ability to help publishers get their content to be seen by more people.
Google has dominated this market by a significant margin. We hope, in fact, if anything, having two or multiple search engines — there’s not just us, there’ll be other competitors — that by having more evenly spread search share, it will only help publishers get traffic from multiple sources. And by the way, advertisers [will get] better pricing. And so publishers will make more money, advertisers will make more money, and users will have great innovation. Think about what a great day it’ll be.
Mealy-mouthed gibberish. Hope and dreams.
Why Both Stories Are Worth Knowing: This is it, folks. The war over AI-powered search and other AI applications is definitely the next wave in tech. And unlike other recent pump fakes, AI does actually provide a benefit to consumers. Real-time AI translation and transcription are useful tools for example, and AI can assist in the content creation process. The issue is the companies are moving with great speed rather than ethical caution. They're just thinking about the money, rather than the potential effects on people.
The Shout Out: The New York Times has a story about disinformation in AI chatbots.
Nothing, Forever Gets Temporarily Banned From Twitch Over Transphobic Speech
Last week, I wrote about Nothing, Forever, the Seinfeld-inspired streaming show created mostly by AI. This week, the show found itself banned from Twitch for 14-days. According to Vice, during one of the fake stand-up sets, the character Larry said:
"There’s like 50 people here and no one is laughing. Anyone have any suggestions? I’m thinking about doing a bit about how being transgender is actually a mental illness. Or how all liberals are secretly gay and want to impose their will on everyone. Or something about how transgender people are ruining the fabric of society. But no one is laughing, so I’m going to stop. Thanks for coming out tonight. See you next time. Where’d everybody go?"
Twitch banned the show shortly after this segment. According to the show's operators, the issue was down to switching to an older version of OpenAI's ChatGPT. The show normally uses the Davinci model, but when an outage happened, they switched to the older Curie model. The operators said that the Curie model was responsible for the segment.
Of course, this is part of the problem with AI models. The large-language models don't understand speech, they just regurgitate it. The operators of Nothing, Forever may be correct that switching to the older model caused the problem, as Time recently reported that OpenAI uses Kenyan workers paid less than $2 per hour to help filter ChatGPT responses that involved violence, hate speech, and sexual abuse. It's possible the older model lacked the same filters.
Film, Television, and Streaming 🎞️
Yellowstone Is Nearing Its End, But It Continues To Expand On a Growing Model
You might not have heard of Yellowstone, the television series created by Sicario writer Taylor Sheridan. If you have heard of it or seen it, then you likely know that the series is huge. Yellowstone is one of the biggest shows on linear TV and streaming. It's also the head of an entire franchise: there's the prequel series 1883, another upcoming prequel 1923, and a spin-off in development called Bass Reeves.
Yellowstone is big enough that Paramount is looking to build out other franchises in the Yellowstone model, starting with key shows and building outward. According to the Wall Street Journal, Paramount is already planning a Dexter: Origins prequel series, a Dexter: New Blood sequel series, Billions-related shows in Miami and London, and even another show called Trillions.
It's a workable model. The Walking Dead just ended with its eleventh season on AMC, but Fear the Walking Dead continues to air and it has three spin-offs in development: The Walking Dead: Dead City, The Walking Dead: Daryl Dixon, and an untitled Michonne series. Another series you may not have heard of is Power, which ran from 2014 to 2020 on Starz, but launched three other series: Power Book II: Ghost, Power Book III: Raising Kanan, and Power Book IV: Force.
As Paramount looks to build out these other franchises however, it seems that Yellowstone is coming to an end. According to Deadline, series lead Kevin Costner is looking to pull back on his shooting days to focus on his multi-part Western film series Horizon. Instead, it seems Yellowstone will be replaced by a new series, potentially starring Matthew McConaughey and carrying forward part of the original cast. The train has to keep moving.
Why It's Worth Knowing: Yellowstone is big money for Paramount+, which is trying to build out its streaming slate beyond just Star Trek. It also helps that the terrestrially-locked Yellowstone is cheaper to film compared to the sci-fi worlds of Trek. Star Trek Discovery has a reported budget of around $8 million per episode, while doing some math with reported spending for Yellowstone's first three seasons results in a budget of around $3.5 million per episode. And the viewership of the latter show is much larger.
More importantly, it's about the business model of spin-offs. This is nothing new — look at the Law & Order or CSI franchises — but studios now are more willing to build upon projects that seem more like one-off stories, rather than building out from tried-and-true procedurals.
Disney+ Loses 2.4 Million Subscribers As Iger Commits To Profitability And Sequels
This week saw the release of the first financial earnings report since returning CEO Bob Iger took over the reins from outgoing boss Bob Chapek. Disney's revenue was up 8% year-over-year to $23.51 billion and net revenue was up 11% year-over-year to $1.2 billion. Sadly, Disney+ was down 2.4 million subscribers for the quarter, with the losses coming almost entirely from Disney+ Hotstar in India. The Direct-to-Consumer division, which contains Disney+, saw operating losses of $1.1 billion, up from $500 billion in the previous year.
With the middling performance of Disney+ on paper, it was Iger's time to outline his vision for making everything better in the future. He announced that there will be three silos: Disney Entertainment under Alan Bergman and Dana Walden, ESPN under Jimmy Pitaro, and Disney Parks under Josh D'Amaro. Each group will "have operational control and financial responsibility for what they create and deliver," whereas the operational structure under Chapek separated production and distribution.
Iger also presented a plan to "focus on our core franchises," a refrain heard from a number of executives recently. For Disney, this means more of what works.
"Today I’m so pleased to announce that we have sequels in the works from our animation studios to some of our most popular franchises, Toy Story, Frozen, and Zootopia. We’ll have more to share about these productions soon, but this is a great example of how we’re leaning into our unrivaled brands and franchises," said Iger during the first quarter 2023 earnings call.
He also talked about the potential purchase of Hulu. In the deal between Disney and Comcast which gave the former company control of Hulu, Disney was given the rights to acquire the streaming service entirely in January 2024. NBCUniversal CEO Jeff Shell said he expects a "big check" from Disney when the time comes. During the earnings call however, Iger signaled that Disney could sell its stake.
"Everything is on the table right now, so I am not going to speculate whether we are a buyer or a seller of [Hulu]," he said, according to Variety. "But I obviously have suggested that I’m concerned about undifferentiated general entertainment, particularly in the competitive landscape that we are operating in, and we are going to look at it very objectively and expansively." No check for NBCU?
There was a further announcement made during the earnings call, but that'll go in a different section of the newsletter.
Warner Bros Discovery Won't Shutter Discovery+ As It Launches Merged Service
When WarnerMedia and Discovery merged into Warner Bros. Discovery, it was expected that the new organization would launch a single streaming service. The service, which will reportedly be called Max, is still planned for launch in Spring 2023, but certain plans have changed. According to the Wall Street Journal, instead of sunsetting both HBO Max and Discovery+ for the new service, the latter service will remain in operation.
The apparent issue is that executives feel the subscription price might be too high for Discovery+ viewers. HBO Max is already $16 per month, and Max would likely cost more. In contrast, Discovery+ is $7 per month.
WBD is worried about losing the 20 million existing subscribers for that platform. IndieWire also reported that not all of Discovery+'s content will be moving over to the new Max service. Of course, the question is: how much will be moving over and will it be enough to justify the price increase for Max over HBO Max?
Layoffs 👷
It's back! Oh wait, that's not good!
Disney Laying Off 7,000 Employees
As I noted earlier in the newsletter, Disney is restructuring under returning CEO Bob Iger. As part of that restructuring, Disney is cutting 3% of its workforce, or roughly 7,000 employees. Disney is looking for around $5.5 billion in cost savings according to Variety, and $2.5 billion of that will be non-content costs. 30% of that will be labor costs, meaning the affected employees.
Disney's revenue was up 8% year-over-year to $23.51 billion and net revenue was up 11% year-over-year to $1.2 billion.
Yahoo Cuts 1,000 Jobs In Advertising Tech Division
The Los Angeles Times reported that Yahoo laid off 12% of its overall workforce on Thursday, or around 1,000 employees. Those cuts will be focused on the company's advertising technology division. These cuts are only the beginning, with Yahoo stating that it wants to cut the division by almost 50% by the end of 2023.
“These changes announced today are entirely within the context of creating a better business plan for that division going forward,” CEO Jim Lanzone told the LA Times. "The company has taken many bites of the apple here in trying to make it work over the years, but as a stand-alone company we had to take a very honest view in how we apply our resources."
Yahoo is partially-owned by Apollo Global Management, an investment firm, and Verizon Communications, so it's actually a little difficult to attribute losses or earnings to Yahoo specifically.
Zoom Reduces Workforce By 1,300 Employees
On Tuesday, Zoom CEO Eric Yuan announced that the company is laying off approximately 15%, or 1,300 employees. Yuan dropped many of the same statements you have seen in this section previously.
"Our trajectory was forever changed during the pandemic when the world faced one of its toughest challenges, and I am proud of the way we mobilized as a company to keep people connected. To make this possible, we needed to staff up rapidly to support the quick rise of users on our platform and their evolving needs. Within 24 months, Zoom grew 3x in size to manage this demand while enabling continued innovation," wrote Yuan.
"As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom. But the uncertainty of the global economy, and its effect on our customers, means we need to take a hard – yet important – look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom’s long-term vision," he added.
For its third quarter FY 2023 earnings report, Zoom Video Communications had a total revenue of $1.1 billion, up 5% year-over-year. It did however, report a net income of $48.3 million, down sharply from $340 million in the same period the previous year.
On My Mind 🧠
Zelda: Tears of the Kingdom Will Be The First $70 Switch Game: It seems apt that the week that the Switch becomes the third best-selling console of all-time — behind the Nintendo DS and Sony PlayStation 2 — that Nintendo also announces that it's moving to $69.99 for certain games. The price popped up for Tears of the Kingdom on the Nintendo eShop earlier in the week, but the price increase wasn't confirmed until after the Nintendo Direct.
Nintendo told Game Informer that players should not assume that all games will be $70 in the future.
"We determine the suggested retail price for any Nintendo product on a case-by-case basis."
Of course the price increase and lack of second quarter releases have some wondering if a Switch follow-up is coming in 2023.
Dark and Darker Is Finding An Audience At Steam Next Fest: It's very hard to tell ahead of time if a game is going to be a viral winner. It seems like the demo of Dark and Darker, a multiplayer fantasy title, is gaining a lot of heat. Dark and Darker is an extraction game, similar to Escape from Tarkov, but in a fantasy medieval setting and in dark, lonely dungeons. The Demo landed on Steam's Most Played list at 14, beating out Call of Duty: Modern Warfare II. Looking forward to seeing if it can carry that heat into a full launch.
New Newsletters From Good People: Also, two folks laid off from The Washington Post has started their own Substack newsletters! They will certainly end up with more subs than yours truly because they’re wonderfully talented, but I wanted to give them both a shout out.
Shannon Liao - Shannon’s Substack
Mikhail Klimentov - ReaderGrev