Amazon's Zooming Past💨🕹️💨
Some thoughts on Amazon's new ventures in gaming🕹️, Zoom's recent adventures📈 and the future of the ads-driven news outlets📰
Hi there! Now that we’re all comfortably settled in the fact that the coronasituation is here to stay awhile and panic is settling down, companies are finally starting to look for solutions to their visibility problems instead of waiting it out. Indeed, tech is going on…
When I was writing the long-format article on game streaming platforms last year I relied on rumors but mostly on intuition when I added Amazon to the list of potential future competitors in the space. It wasn’t a visionary, out-of-this-world, god-level prediction by any means, I’m fairly certain that if you search enough the same insight would come from several other sources around that time. It just made sense that when the basis of competition in the industry eventually shift towards benefiting companies with stable and widely-spread cloud-based infrastructure, Amazon would become a contender on that basis alone. The acquisition of Lumberyard, the company’s prowess in selling things through an online store and the meteoric rise of videogames’ profits compared to other entertainment are what drove home the probability that Amazon would be soon joining the dance alongside Google and Microsoft.
Last week Amazon announced the name of their game making studio located in Seattle, Relentless Studios, and reminded us that they’ve been making games for a while. After shipping ‘The Grand Tour Game’ last year that relied heavily on the IP power of the TV show, the company announced it will release two big, triple-A titles next month. Crucible, a SciFi shooter with a MOBA twist that gives it a strategic element, and New World, an MMO that had an open beta trial period of which those who got to try it had only praise for. On top of this, the creators of the latter are also working on another such title that leverages the Lord of the Rings franchise, for which Amazon is also developing a small TV show about. As far as the game streaming effort is concerned, Project Tempo, was set to debut this year but sources from the team say it could be delayed due to the coronavirus epidemic.
Amazon appears to have done things right here. Apart from the solid infrastructure used for delivery, game streaming services also count exclusive content in their value network, each of these is a necessary, but not sufficient, element that will eventually contribute to the success of the service —if you would have read the Medium article I linked at the top you’d already know this. Amazon has spent hundreds of millions buying studios and hiring top execs from gaming companies in an effort to make its service attractive in the eyes of potential subscribers by owning both the creation and distribution aspects instead of settling for whatever deals publishers agreed to give them.
From the types of games to be released in May, it’s easy to see what kind of audience Amazon is aiming for here: hard-core gamers willing to spend a lot of time and, most importantly, money in the game. These kinds of games usually have a much higher average revenue per user due to their more mature audiences that have the means to pay the monthly subscription required of them but Amazon could leverage their treasure chest to flip that business model upside down. Whether they’ll charge a small price and then allow Amazon Prime subscribers to play the game for free or go a completely different route is still unknown, but if past actions are any indication of future one —they’re sometimes not—I bet they’re looking for a way to hook consumers to their gaming services as well.
For good measure, the company also announced that over the summer months they’ll also launch multiple titles belonging to what sounds like a new casual genre. This new type of game will allow Twitch viewers to influence the game session their streamer is currently playing in real-time. If successful, this new interactivity element could break the invisible wall between streamers and their fanbase and increase engagement to levels never seen before on these services.
If the company pulls this off and attracts a considerable number of players to its platform, this will prove one of the strongest elements in the network effect flywheel Amazon is so well known for. While this started with offering self-produced TV series, videogames, with their addictive and endless nature, will prove a far bigger incentive for the younger audience going forward. In the eventuality that one of their games becomes a decade-long game aking to World of Warcraft and others and that they can find a streamlined way to link gameplay with offers on Amazon.com, I’d say the future of the eCommerce business is in safe hands.
I refrained from commenting on any of the ZOOM-related news up until this point as developments in past weeks have been rolling out at quite a rapid pace and it was hard to separate rumor from reality, especially without a statement from the company itself. Last week 71-year old actor Samuel L. Jackson used ‘zoom’ as a verb and the company’s CEO posted a blog entry on their website describing plans to improve the product in the areas of privacy and security without sacrificing ease of use, so I felt obligated to address it. Thanks, Sam👍
To prevent ‘zoombombing‘ users can now create waiting rooms, set passwords, mute controls for some participants or limit their screen sharing ability. Facebook’s SDK in the iOS client has now been removed to prevent it from collecting data from users and the company’s privacy policy has been updated to reveal they don’t sell user data. As far as future developments are concerned, the company intends to freeze development of all future features and focus everyone on safety and privacy in the near future, conduct third-party reviews with experts on consumer security, enhancing the bug bounty program and launching various partnerships with other companies to ensure the service is basically bulletproof from outside attacks.
I agree, that’s quite the list of chores😅
Granted, when an attorney general starts asking questions on your security measures the only logical thing to do is to improve security measures as much as possible and provide them with a suitable answer, but this in no way means that said measures will come cheap. The outright —and maybe more significantly— the opportunity costs involved with all these actions will, no doubt, have a significant impact on the company’s bottom line in the long term as future growth and diversification are traded for reinforcing security. Add to this that most of Zoom’s recent growth, from 10 million daily participants in December to 200 million in March, has come by way of free users, costing the company a lot of money in running the service while bringing in virtually nothing at the moment.
I anticipate an almost equal drop in users over a longer period of time as quarantine measures are abandoned by countries one by one but a less significant drop in the share price. Sure, this could be seen as an investment in ‘visibility’ that could provide the company with organic, word-of-mouth marketing going forward, but it’s also safe to assume that actors which didn’t need to use the software before the quarantine will continue to not need it once the quarantine is over.
As Zoom’s business model allows for instant sign-up, consumers can just start using the service without a prior subscription —as they have done in the past three months— so there’s no incentive for them to continue to pay for the subscription ina post-quarantine world. Some of these efforts in borderline military-grade security and education-focused features addressing the needs of minors will prove of little value for the post-COVID19 roster of subscribers as the product stands right now, but definitely not all of them. There’s a high probability that with the new features the company will attract a new category of clients, ones that value privacy above everything else and have much deeper pockets than the startup using the service for hiring employee number twelve.
At the end of the day, if you think that Zoom was intended primarily as an enterprise-focused tool, with the free tier meant to give companies a taste of the product before they buy-in, it’s easy to see why the experience wasn’t ideal for the deluge of free users coming in over the past three months. Anyone who ever worked in making software can appreciate the fast reaction of this company considering how quickly their world changed and the environment they’re being asked to operate in—remember Zoom developers are also working remotely now. Keep in mind that accounts asking questions like “Why haven’t they done X before?” are almost certainly coming from individuals who’ve most likely spent most of their life commentating from the sideline, not building things from scratch.
Photo by AbsolutVision
After an increasing number of large media companies such as Disney, Maven (Sports Illustrated), Gennett (USA Today) and Vice either laid off or forced employees into taking unpaid leave, Outline Magazine shut down on Friday. Cutting pay for executive staff is not enough and journalists everywhere are at a point where they should pray for only getting a pay cut after advertisers reduced their marketing budget and despite the recent spike in the number of eyeballs overlooking ad-driven mediums, as we’ve talked about last week.
With all this talk of bailouts and after finishing a book last week that brought into introspection the ‘nature vs. nurture’ debacle, I did a half-baked thought experiment in my head that I thought I’d lay out here, Pacino-style, in the hope that we’ll reach full baking time by the end of it. What if we let the current, ad-enabled newspaper business model die off? What if they don’t cave to the pressure of deep-pocketed billionaires in these trying times? What if they skip the government funding in an effort to maintain independence?
The majority of the highly-influential news outlets today —those that aren’t yet controlled by tech billionaires— are owned in part or in majority by investment funds which, conveniently for them, adhere closely to the Milton Friedman school of thought stating that a company’s first responsibility is towards its stockholders. I’ll go ahead and state the obvious here by saying that these interests rarely align with those of informing the public in an unbiased and impartial manner.
News businesses should recognize that the old, steadily-declining ads-supported model is sure to take an even steeper dive in a post-coronavirus reality and take this opportunity to make the necessary pivot to a more decentralized, online, non-profit model. More, smaller sized offices spread around the country led by a few quality journalists will make organizations more agile and give them the fast reaction speed needed in this day and age while leveraging the invaluable amount of experience these individuals amassed over the years in the room. The donation-based business model will allow outlets to rid themselves of the pressure of providing a return at the end of Q4 and give them more independence in their reporting while serving only one master and his interests: the reader.
This transition won’t be easy to make, especially when you’re addicted to your old ways and blind to potential disruption. Many would say it’s not even needed, if you look at the current news ecosystem there are some ethics-oriented owners —some of them the tech billionaires I passive-aggressively shaded in the third paragraph— and some small subscription-based outlets that are doing great work and the new donor-based outlets might fall into the trap of tending too much to their main benefactors and not enough to the general audience; I’d argue that ‘some’ are not enough.
‘And how’s the donor-based model that different from the subscription-based one we see in some places today’ I hear you ask? In one key way: in the donation-based iteration, all articles are also available to non-subscribers, with the few who can afford to make large donations sustaining the business while the many access it for free. Not all of these benefactors need to be wealthy individuals, the distributed ownership model makes it easy to maintain independence even if a part of these donations come from tech giants like Facebook and Google paying to incorporate news articles onto their platforms.
It feels like with every one of these newsletters I write about a new record being broken in the gaming industry, last week the top number of concurrent players on Steam has been updated to over 24 million people online for the fourth time in the past two weeks while the maximum number of players in-game has also been bested at 7.25 million. Mobile gaming also set a milestone of 1.2 billion downloads over the week of March 22nd, making up for a 50% increase compared to the average of Q4 2019. The fact that we’re seeing increased consumption in gaming at this point is no surprise given the vast libraries and endless content some of the products exhibit, but I’m surprised that no one is talking about the size of the inevitable drop coming once the quarantine is over. At this point, it’s anyone’s guess whether we’ll end the year on a net gain or loss 🕹️👪👩👦👨👧
I was wondering over my weekly supermarket run how the isolation is affecting podcasts as this is the occasion I use to consume the medium myself which then boils over into less than an hour after I reach my destination. On one side you have more time at home next to a computer while doing ‘single-player activities’ but on the other, you’d just prefer the more visual alternatives if you have access to a screen. It turns out that was not far off from the truth. IRL podcast downloads dropped by 10% in March while the number of unique listeners is down 20% in the US. With commuting or long solo trips now reduced to a minimum, podcasts are apparently out, just when they were starting to be in🎙️📻
Releases of new tech hardware have all but dried up but there’s increasing evidence that Apple is prepping for another update of its lineup after the new iPad announcement two weeks ago. After descriptions for various accessories have changed in the past week to include the second model of iPhone SE that’s based on the iPhone 8 chassis. At the time of writing, nobody really knows exactly when this drop will happen, while some outlets assume an April 15th date others said it was last Friday, the consensus seems to be that it’s ‘imminent’. A smaller/better iPhone for $349? Yesss!🍏📱
On Wednesday the US Army will test the Starlink-provided internet connection under ‘live fire’ in order to see whether the technology is robust enough for military applications. As coverage increases with every satellite launch it feels like new use cases for the technology are springing up every month, from transferring data between stock markets to connecting remote location and now the defense industry. Yeah, SpaceX is panning out to become crazy-profitable once they surpass their growth pains🚀🛰️
Tesla is relegated to ‘Short Pursuits’ this week, not because they fell more than 10.000 deliveries short in Q1 compared to expectations —companies across industries are forgoing pre-corona estimations all over the place— but because the announcement was fairly bland. We’ll have to wait for the investor call if we want the usual pizzazz, until then take a look at some aspects of the Model Y with an engineer called Sandy 🔋🚗
Are there solutions for working from home if you’re the most secretive technology company? Apparently yes, in the form of controlling access, limiting third-party software to the trialed and tested, reimbursing people for ergonomic chairs and addressing employee concerns on the crisis often💺🖥️
If, like me, you were wondering if the home isolation would result in an increased natality rate or that of divorce, wonder no more. China is recording record lows in birth rates and record highs in divorce applications, making this conundrum pretty cut and dry. While sales of prophylactics have also soared over the past couple of months, it’s easy to see this slowdown is also due to financial concerns going into the future🤷♂️👶
Google put out some ‘Community Mobility’ reports so you can see how good or bad your country’s doing in staying at home. Not looking good in my neck🏘️🦠
This piece on how taboo changes language is very much worth the quick read.“The Swedish word for wolf, though, is varg. This descends from an old Norse word vargr, meaning someone outcast from society for underhand murder or oath-breaking, evil deeds in Viking society.”🐺🐺
Actor and all-round nice guy Tom Hanks is back and healthy in the US and NASA brought back its 1975 logo. Are these things connected? Hell no. Did I put them together to keep the length of the email low? Hell yeah! Did I fail at this task by making this joke? You bet!!🤗🤗
I’m fairly sure no one at Nintendo thought of this use case and I’m far from sure this was the sole factor that led to their latest sales boom, but I made a habit of ending this newsletter with some visual media so here we are..
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