Year: 2019

Apple had some bad news tonight. It was so bad in fact that it had to halt trading for a time while posting a grim report that its numbers would be lower than it had forecast at the last quarterly earnings report in November. Apple blamed faltering sales in Asia, particularly in China, for the adjustment, but I’m afraid it can lay at least part of the blame on me too.

You see I was part of the problem as well. On the bright side, I finally upgraded my iPhone this week. I had been using an old iPhone 6 that was over three years old. It had become crotchety with a bad battery life and the recharge cable wouldn’t say stuck without some serious coaxing. The phone had to be flat on a table, and would often disconnect if I even brushed against the cord or looked at it the wrong way.

I had been thinking about upgrading for several months, but I kept putting it off because the thought of spending $1000 for a new phone frankly irked me, and I had after all paid off my trusty 6 in full long ago. I was going to squeeze every bit of life out of it, dammit.

In spite of my great frustration with my old phone, it took the enticement of a $200 credit to finally get me to replace it, as I’m sure the promotion was intended to do. Just yesterday on New Year’s Day, I headed to my closest Apple Store and I finally did right by the company.

I replaced my ancient 6, but I did something else that probably hurt Apple as part of its death by a thousand cuts. I went into the store thinking I would buy the more expensive XS, but in the end I walked out with the lower-cost XR. I looked at the two phones and I couldn’t justify spending over $1000 for a phone with 256 GB of storage. I wanted a phone with longer battery life and a decent display and camera and the XR gave it to me. Yes, I could have gotten an even better phone, but in the end the XR was good enough for me, and certainly a huge upgrade over what I had been using.

Clearly lots of people across the world had similar thoughts, and one thing lead to another and before you knew it, you had a situation on your on your hands, one that forced you to halt the trading of your stock and report the bad news. The stock price is paying a price, down over 7 percent as I write this post.

So, sorry Apple, but it appears that there is a tipping point when it comes to the cost of a new phone. As essential as these devices have become in our lives, it’s just too hard for many consumers around the world to justify spending more than $1000 for a new phone, and you just have to realize that.

Amazon Alexa had a good year as a developer platform – at least in terms of the number of voice apps being built for Alexa, if not yet the monetization of those apps. According to new data published today by Voicebot, the number of Amazon Alexa skills in the U.S. more than doubled over 2018, while the number of skills grew by 233 percent and 152 percent in Alexa’s two other top markets, the U.K. and Germany, respectively.

Amazon began the year with 25,784 Alexa skills in the U.S., which grew to 56,750 skills by the end of 2018, said Voicebot. That represents 120 percent growth, which is down from the 266 percent growth seen the year prior – but still shows continued developer interest in the Alexa platform.

At this rate of growth, that means developers were publishing an average of around 85 skills per day in 2018.

Voicebot has its own method for tracking skill counts, so these are not Amazon’s own numbers, we should note. However, Amazon itself did say at year-end 2018 that its broader Alexa ecosystem had grown to “over 70,000” total skills across markets.

In the U.K., the number of Alexa skills rose 233 percent this year to reach 29,910 by year end. In Germany, the skill count grew by 152 percent to reach 7,869 skills. Canada had 22,873 skills as of the beginning of January 2019; Australia has 22,398; Japan has 2,364; and France has 981. (Voicebot says it hasn’t yet set up a system for counting the skills in India, Spain, Mexico or Italy at this time.)

Also of interest is that much of the skill growth occurred near year-end, ahead of the busy holiday season when Alexa devices became top sellers. In the U.S., U.K. and Germany, developers published 181, 84, and 37 skills per day, respectively, during the last two months of the year.

The firm also pointed out there is some debate over whether or not the growth in third-party skills even matters, since so many of them are virtually invisible – never discovered by end users or installed in large numbers. That’s a fair criticism, in a way, but it’s also still early days for voice-based computing. Developers who are today publishing lower-rated skills may be learning from their mistakes and figuring out what works; and they’re doing so, in large numbers, on the Alexa platform.

As to what sort of skills are actually striking a chord with consumers, Amazon itself recently shared that information.

It released a year-end list of Alexa’s “top” skills, which were selected based on a number of factors including customer reviews, engagement, innovation and more, Amazon told us.

Many of the top skills were games. And many had benefited from their association with big-name brands, or had been promoted heavily by Amazon, or both.

Among the top games were music skill Beat the Intro; Heads Up!, already a top paid iOS app from Ellen DeGeneres; National Geographic’s Geo Quiz skill; Question of the Day; Skyrim Very Special Edition; The Magic Door; Trivia Hero; World Mathematics League; Would You Rather for Family; and Volley’s roleplaying game, Yes Sire.

The non-game skills were focused on daily habits, wellness, and – not surprisingly, given Alexa’s central place in consumers’ homes – family fun.

These included kid-friendly skills like Animal Workout, Chompers, Kids Court, Lemonade Stand, and Sesame Street; plus habit and wellness skills like Chop Chop, Fitbit, Headspace, Sleep and Relaxation Sounds, Find My Phone, AnyPod, Big Sky, Make Me Smart, and TuneIn Live.

It’s interesting to note that many of these also are known app names from the mobile app ecosystem, rather than breakout hits that are unique to Alexa or smart speakers. That begs the question as to how much the voice app ecosystem will end up being just a voice-enabled clone of the App Store, versus becoming a home to a new kind of app that truly leverages voice-first design and smart speakers’ capabilities.

It may be a few years before we have that answer, but in the meantime, it seems we have a lot of voice app developers trying to figure that out by building for Alexa.

 

 

As one Congress ends and another begins, many are looking forward to a rebalancing of power — especially in the House of Representatives, which Democrats handily retook in November. But FCC Chairman Ajit Pai is more pleased with what the House failed to do — namely, roll back his repeal of net neutrality rules.

To be fair, he does have reason to celebrate; no one likes to see their work undone. But a statement issued today tells a very selective truth about Congressional opposition to his master plan.

“I’m pleased that a strong bipartisan majority of the U.S. House of Representatives declined to reinstate heavy-handed Internet regulation,” Pai said. The “heavy-handed” remark is the usual boilerplate in reference to 2015’s rules, which used what the current FCC calls “depression-era” regulations to exert control over internet providers. That aspersion doesn’t really make sense, as I’ve noted before.

And the “strong bipartisan majority” bears a bit of explanation as well. Indeed, the Democrats fell about 30 short of the votes they needed to put the Congressional Review Act into effect and undo the FCC’s order. But that was only after the Senate, by a similar “strong bipartisan majority,” as Pai would no doubt put it, voted for the rollback. No mention of that in his statement.

In fact the CRA was a long shot from the beginning, but as Senator Brian Schatz (D-HI) told me shortly after the repeal, “it’s very important to try, and it’s important to get everybody in Congress on the record. We want every member of Congress to have to go on the record and say whether or not they agree with what the commission just did.”

Although there was no actual change to the rule, the forced votes of the CRA did succeed in exposing the stances of Senators and Representatives who had hitherto avoided the issue.

Pai followed this questionable bit of crowing with a litany of vague reasons the new rules should be kept. The internet, he points out, “has remained free and open. Broadband speeds are up… Internet access is also expanding, and the digital divide is closing.”

The former claim is, as always, being tested by internet providers, who continue to inject ads, block or throttle services, and otherwise interfere until customers and watchdogs call them out.

But the latter claim in particular would be disputed by many, especially since the FCC’s own numbers tracking broadband deployment in the U.S. have been widely mocked as inaccurate and sourced uncritically from an industry with a vested interest in overstating its own accomplishments.

Furthermore, it’s entirely unclear whether Pai’s new rules have had any positive influence at all. Broadband investment has in fact not been affected, despite a $2 billion tax break given to cable companies and a number of other sweetheart deals. The most likely explanation for any positive effects is investment planned or made years ago, perhaps as far back as the Obama administration and the previous rules.

On top of that, the new rules are under such close scrutiny and face several legal challenges that the industry would be foolish to let them affect their policies in anything but short term matters. As happened with the 2015 rules, these ones could be gone in a year or two, or — with the Senate bullish on real net neutrality rules and a flipped House — replaced with actual legislation.

Google was warned of a bug in its Chromecast media streaming stick years ago, but did not fix it. Now, hackers are exploiting the bug — and security researchers say things could get even worse.

A hacker, known as Hacker Giraffe, has become the latest person to figure out how to trick Google’s media streamer into playing any YouTube video they want — including videos that are custom-made. This time around, the hacker hijacked thousands of Chromecasts, forcing them to display a pop-up notice that’s viewable on the connected TV, warning the user that their misconfigured router is exposing their Chromecast and smart TV to hackers like himself.

Not one to waste an opportunity, the hacker also asks that you subscribe to PewDiePie, an awful internet person with a popular YouTube following. (He’s the same hacker who tricked thousands of exposed printers into printing support for PewDiePie.)

The bug, dubbed CastHack, exploits a weakness in both Chromecast and the router it connects to. Some home routers have enabled Universal Plug and Play (UPnP), a networking standard that can be exploited in many ways. UPnP forwards ports from the internal network to the internet, making Chromecasts and other devices viewable and accessible from anywhere on the internet.

As Hacker Giraffe says, disabling UPnP should fix the problem.

“We have received reports from users who have had an unauthorized video played on their TVs via a Chromecast device,” a Google spokesperson told TechCrunch. “This is not an issue with Chromecast specifically, but is rather the result of router settings that make smart devices, including Chromecast, publicly reachable,” the spokesperson said.

That’s true on one hand, but it doesn’t address the years-old bug that gives anyone with access to a Chromecast the ability to hijack the media stream and display whatever they want, because Chromecast doesn’t check to see if someone is authorized to change the video stream. (Google did not respond to our follow-up question.)

Bishop Fox, a security consultancy firm, first found the bug in 2014, not long after the Chromecast debuted. The researchers found that they could conduct a “deauth” attack that disconnects the Chromecast from the Wi-Fi network it was connected to, causing it to revert back to its out-of-the-box state, waiting for a device to tell it where to connect and what to stream. That’s when it can be hijacked and forced to stream whatever the hijacker wants. All of this can be done in an instant — as they did — with a touch of a button on a custom-built handheld remote.

Two years later, U.K. cybersecurity firm Pen Test Partners discovered that the Chromecast was still vulnerable to “deauth” attacks, making it easy to play content on a neighbor’s Chromecasts in just a few minutes.

Ken Munro, who founded Pen Test Partners, says there’s “no surprise that somebody else stumbled on to it,” given both Bishop Fix found it in 2014 and his company tested it in 2016.

“In fairness, we never thought that the service would be exposed on the public internet, so that is a very valid finding of his, full credit to him for that,” Munro told TechCrunch.

He said the way the attack is conducted is different, but the method of exploitation is the same. CastHack can be exploited over the internet, while Bishop Fox and his “deauth” attacks can be carried out within range of the Wi-Fi network — yet, both attacks let the hacker control what’s displayed on the TV from the Chromecast, he said.

Munro said Google should have fixed its bug in 2014 when it first had the chance.

“Allowing control over a local network without authentication is a really silly idea on [Google’s] part,” he said. “Because users do silly things, like expose their TVs on the internet, and hackers find bugs in services that can be exploited.”

Hacker Giraffe is the latest to resort to “Good Samaritan security,” by warning users of the issues and providing advice on how to fix them before malicious hackers take over, where tech companies and device makers have largely failed.

But Munro said that these kinds of attacks — although obnoxious and intrusive on the face of it — could be exploited to have far more malicious consequences.

In a blog post Wednesday, Munro said it was easy to exploit other smart home devices — like an Amazon Echo — by hijacking a Chromecast and forcing it to play commands that are loud enough to be picked up by its microphone. That’s happened before, when smart assistants get confused when they overhear words on the television or radio, and suddenly and without warning purchase items from Amazon. (You can and should turn on a PIN for ordering through Amazon.)

To name a few, Munro said it’s possible to force a Chromecast into loading a YouTube video created by an attacker to trick an Echo to: “Alexa, order an iPad,” or, “Alexa, turn off the house alarm,” or, “Alexa, set an alarm every day at 3am.”

Amazon Echos and other smart devices are widely considered to be secure, even if they’re prone to overhearing things they shouldn’t. Often, the weakest link are humans. Second to that, it’s the other devices around smart home assistants that pose the biggest risk, said Munro in his blog post. That was demonstrated recently when Canadian security researcher Render Man showed how using a sound transducer against a window can trick a nearby Amazon Echo into unlocking a network-connected smart lock on the front door of a house.

“Google needs to properly fix the Chromecast deauth bug that allows casting of YouTube traffic,” said Munro.

Apple CEO Tim Cook issued a letter today, revising guidance for the company’s Q1 fiscal results. Per the letter, revenue has been shifted from an initial projection of between $89 billion and $93 billion to $84 billion. The note highlights a number of reasons for dropping the number, including, perhaps most notably, lower than expected results in emerging markets.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook says in the letter. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

Apple has invested a lot of future growth in markets like China, and a series of factors have made for disappointing results. Among them a slowed economy and tensions with the U.S. spurred on by tariffs that many believe will spur on a full-fledged trade war. India has also been a tough nut for the company to crack.

But that’s only one piece of the puzzle here. As Cook notes in the letter, there have been fewer iPhone upgrades than expected. The executive notes, however, that non-phone categories (including the Mac, Apple Watch and iPad) did manage to grow 19 percent, but the smartphone has long been a driving force in the company’s economic fortunes, so a blow to those sales can have a substantial impact on the company’s bottom line.

2018 marked the first down year for smartphone numbers since analyst began tracking them, and not even the might iPhone is immune from the larger trends. Pricees are going up, phone quality has improved and new features haven’t been enough to keep consumers to a shortened upgrade cycle. The industry at large is going through a reckoning as it grapples to determine the next major consumer electronics trend. Apple has continued to be a rare bright spot in a stagnant world of wearables, but the Watch alone isn’t enough to right that ship.

“While China may have played a big role in the revenue miss the reality is nearly all smartphone markets are seeing a lengthening in replacement cycles and we should expect this to be the new normal,” Ben Bajarin of Creative Strategies, tells TechCrunch. “While price is what is being mentioned, I believe there would have still been softer iPhone sales even if prices were not raised due to consumers being content with their current phones and not as interested in the premium features coming out in the latest models.”

The letter features an unusually dour tone from the chief executive, also placing some of the blame on supply chain constraints, shifting product release cycles and the strength of the U.S. dollar.

But Cook rightly notes that Apple has been through plenty of tough times before. “As we exit a challenging quarter, we are as confident as ever in the fundamental strength of our business. We manage Apple for the long term, and Apple has always used periods of adversity to re-examine our approach, to take advantage of our culture of flexibility, adaptability and creativity, and to emerge better as a result.”

 

2019 promises to be a great year in games. Innovation and competition will elevate the industry’s offerings and drive more inclusivity among a broader range of audiences.

Cloud gaming emerges as the new frontier and brings about unlikely partnerships.

Collectively, gamers will serve as the canary in the coal mine as large tech companies look to introduce new technologies to mainstream consumer audiences. Companies like Amazon, Tencent, Google and Microsoft already own and operate massive data centers that virtually-run enterprise applications. In 2019, we will see continued investment in infrastructure and content acquisition as these billion dollar companies seek to claim the consumer market.

Cloud gaming is a massive market opportunity that extends beyond just interactive entertainment. Microsoft already generates significant revenues from cloud-based services and doubling down on gaming will open the door to broader adoption by consumers and a bigger piece of the market.

It also comes with significant competition, each player with their own motivations. Tencent, for one, got hit hard with a slowdown in mobile game approvals by the Chinese government, causing its share price to drop. Since then, things have started to improve somewhat, but it has incentivized Tencent to reduce its exposure in gaming and look for other non-content business segments that generate steady revenue and require less government regulation. For the first three quarters of 2018, Tencent’s cloud operations generated $864MM (RMB 6bn) in revenues and more than doubled year-over-year.

Google has also been trying to wiggle its way into the cloud gaming business. Its cloud operations make about $10bn annually and recently appointed a new CEO likely to expand Google Cloud’s vertical product capabilities in non-tech categories.

And there is, of course, Amazon. With currently over 50% market share in cloud computing and a strong user acquisition and engagement channel with Twitch, Amazon is uniquely positioned. But its previous efforts around interactive entertainment have so far not produced any real tangible results despite it ramping up expenditure. This makes it more likely that Amazon will become a third-party infrastructure provider for companies like Sony and Nintendo instead.

As these titans double down on cloud gaming initiatives, we can expect to see some surprising partnerships. For instance, Tencent and Google are currently working together in China. This gives the latter an entry point into a market that has long been out of reach. Meanwhile, incumbents like Sony, Nintendo and legacy game publishers will have to decide on going at it alone, as is the case of Electronic Arts, or buddying up and surrendering a piece of revenue.

Gamers win as the PC games market breaks into pieces.

It’s not a bad thing. But after more than a decade of a virtual monopoly held by Valve, new contenders have emerged. We already saw how Valve tried to get in front of Epic’s announcement that it was lowering its platform fees. And not long after, Discord popped up with an even better rate.

Breaking with the standard 30% cut, which is what most platforms (Apple, Facebook) claim in exchange for their services, Valve announced a few major changes. Two key sentences from the announcement. First, Valve’s new revenue distribution: “when a game makes over $10 million on Steam, the revenue share for that application will adjust to 75%/25% on earnings beyond $10M. At $50 million, the revenue share will adjust to 80%/20% on earnings beyond $50M.” Succinctly, make more and keep more.

Part of what is driving this is consolidation at the top. In the PC market the top-line firms have been growing at an incredible rate. Between 2013 and 2017, Activision grew its PC operations at +10% compound annual growth rate. EA’s was +30%, and Bethesda’s +36%. Meanwhile the share of the top four public companies, based on PC gaming revenue, grew from 44% to 60% in that same period. It’s getting less crowded at the top and digital stores will have to compete.

The big publishers like Activision, Ubisoft, and EA already have their digital storefronts and distribution platforms. Different from the brick-and-mortar space, publishers managed to build their own rather than rely on third-parties. For years, the big guys have had no interest in putting their content side-by-side with a growing number of small and medium-sized game companies.

Epic’s wild success with Fortnite has afforded it a much broader range of strategic options. So far it has lowered its store fees and retroactively paid developers on its platform. And now it is budding into the digital PC market by using its vast financial resources to compete head-on with Valve. Finally, Discord’s entry should be noted, too. Adding a content offering to an existing community, rather than the other way around, Discord is the new hot thing. Certainly, it has yet to lay claim to a hit title of its own. But it has both the expertise and critical mass to become an important next store front. It raised an additional $150 million right before the holidays.

All this takes place against the backdrop of a declining physical games market. It’s been a tough few months in meat space. In its recent earnings, GameStop came in at $2.08bn and +4.8% in global sales, but Wall Street was not impressed. GameStop blamed Call of Duty and “sports titles.” With the recent sell-off of Spring Mobile to lower its debt, the specialty retailer continues on the hunt for new leadership, either in the form of a new CEO (unlikely) or new owner (likely). Whoever is going to scoop up GameStop is probably waiting for 19Q1 when sales dip and its valuation will be lower.

The breaking up of Valve’s dominance is good for players and companies that make games. Consumers will get better prices and more choice, and the various digital stores will compete over functionality and improved user experience.  This is a win-win for all.

Walled gardens will be broken down enabling cross-platform play with anyone, anywhere.

Despite digitization, the bulk of interactive entertainment has remained within one of the various walled gardens. That is going to change. Like telecom networks that allow people to speak to each other irrespective of their phone provider, so, too, will online gaming break down silos. In 2019, cross-platform play will become ubiquitous. The end of 2018 has already shown the potential of this as Fortnite’s success resulted in each of the platforms agreeing to play nicely with one another.

Legacy publishers like Activision Blizzard have also tasted what cross-platform play can do for their franchises: Hearthstone has continued to dominate the collective card game category, because it works seamlessly across PC and mobile, and offers a smooth integration with live-streaming platforms like Twitch.

Cross-platform play should be at the top of every studio’s design agenda in 2019.

Subscriptions and bundled content will drive sales in 2019.

After seeing the initial success with subscriptions enjoyed by Twitch and Microsoft’s GamePass, more companies will adopt this monetization model. Large platform holders like Sony and Apple are looking to grow their revenues by offering content subscriptions. Both of these companies have indicated they have plans to increase services revenue as a direct response to reaching the limit of how much hardware they can sell.

Game publishers have been experimenting with micro-transactions to great success. Tentpole franchises like FIFA, Hearthstone, and GTA V Online have made a mint from what they call ‘recurrent revenues.’ Beyond up-selling their audiences on a regular schedule with content updates, they will explore subscription models that will provide massive discounts and unique content to players in exchange for a more predictable revenue flows.

Video games will face more and new regulation with a focus on kids.

Now that gaming has emerged as a mainstream form of entertainment, the industry can expect more scrutiny. In addition, there will be sharper focus on kids and technology in 2019. Data companies will be increasingly under the microscope. Similar to the loot box scandal that resulted in various governments speaking out, we will see an effort focused on protecting children. This means that game companies will be held to a higher standard with regards to how they handle data on minors. Against the background of a festering trade war between eastern and western economies, data ownership, in particular around children, will emerge as a political topic and strategic business challenge.

It also means that titles like Fortnite will be fingered as culprits in narratives around an erosion of culture and well-being (although this is largely driven by misinformed industry critics). The title’s appeal to younger audiences will make it a likely scapegoat as the usual choir sings its disdain for video games. This year’s congressional hearing in the U.S. more than satisfied our need for examples of how disconnected government representatives are from technology used by literally everyone else. Different from previous generations, however, I expect the companies currently at the top of the food chain to know exactly how to respond. They will push titles that offer a safe, pleasant space for kids to play, uninterrupted by broader challenges found everywhere else.

Next year will, however, not be a continuation of exuberance as we’ve seen previously. Trends in related industries suggest that gaming, too, will move toward a more concentrated competitive landscape and closer government monitoring.

Further consolidation is imminent for the games industry.

In response to the slowdown in consumer spending, some game companies will go out of business and others will gobble up the failing ones to strengthen their market positions. Nothing new here but it does leave room for speculation as to who will buy whom. I previously speculated that Amazon would buy GameStop and still think they might. Only it will happen when GameStop reaches its wits end, probably at the end of Q1 2019.

Across Europe there have been a series of smaller acquisitions throughout the year, some of which are now turning sour. Starbreeze had its offices raided (which I’m told sounded worse than it was). Even so, this year the ambitious portfolio approach of buying up smaller studios and leveraging their IP against efficient distribution networks became, perhaps, too popular.

Finally, I expect companies like Tencent to continue satisfying their appetites for foreign assets. If nothing else, this year has cemented Tencent’s need to diversify as they look to mitigate some of its recent stresses by lowering its exposure to games revenue and further investing in western companies and platforms. Over the past two years its success with this strategy has greatly lowered competition across PC and mobile, the two most innovative categories.

This does not mean that innovation itself is at risk. It just means that the stakes will be higher for any firm that does not make a billion or more in revenues.

The coming Winter brings a slowdown in growth, and possibly in revenue and innovation.

I’ve been writing about this for a while now. But don’t misunderstand: I want to be wrong about this. While I would like to predict that 2019 will bring even more growth and more money for everyone, the supporting evidence simply isn’t there.

For one, mobile gaming is showing saturation across different markets, including in China. It has evolved from insignificance to become the biggest games market worldwide and is now starting to slow. We are also at the end of the current console cycle. This simply means that the platforms are going to discount their hardware and the bulk of consumers looking to spend are disproportionately price conscious.

Overall economic indicators suggest that consumer spending, especially in the US, is headed to a slowdown. Following the tax breaks earlier in the year, overall spending surprised even the retailers. But that party is going to end soon. Finally, as gaming has become mainstream its underlying economics have shifted. In broad terms this means that where previously the games industry may have seemed “counter-cyclical” it is going to follow suit with whatever happens to consumer spending at large. In addition, investors have become savvier and are starting to trade aggressively against game stocks. This means game companies are less inclined to take risks on content innovation (as in the case of EA).

The long-term silver lining here is that this imminent stagnation is the precursor of the industry’s overall transition. But before Spring comes Winter.

Live-streamers and influencers embark on a drama binge.

Yes, newfound fame will get the better of them and stupid things will be said. This is still the very first generation that suddenly finds itself thrust into the mainstream spotlight — they don’t have the benefit of the intense vetting that other industries have subjected their rising stars to before sending them on the mainstage. With many still amateurs and competing against one another to win the favor of audiences and aggregators alike, the stakes are substantially higher.

In their hunger for attention, aspiring streamers will sacrifice their authenticity and some will undoubtedly ruin their careers before it even starts. Mounting pressures from growing competition will drive this new generation of tastemakers to ‘keep it real’ and remain authentic. Twitch and YouTube will do what they can, I’m sure. But for many, this authenticity will be too much.

EA takes a hit in 2019.

Among the Big Three, Electronic Arts will have the toughest year. Despite its aggressive expansion effort illustrated by the acquisition of GameFly’s streaming division, EA is going to face the music with investors. This is somewhat undeserved because financial investors insist on continual growth and generally can’t see past the next quarter. And, to be fair, EA has a few weaknesses: its revenue and its margin area highly dependent on the continuing success of FIFA Ultimate Team. In addition, it has relatively little new IP in the pipe which makes it even more difficult for investors to care about the longer-term future. Simply put, EA can’t free itself from Wall Street’s needs as several analysts have already started to lower their expectations for the year ahead.

GameStop sells but it’s not a party.

I already predicted this last year and was almost right: GameStop has been trying to get acquired for the past six months. Its C-suite has seen better days, most recently resulting in a letter from one of its largest shareholders, Tiger Management, to get its sh!t together (aka perform a strategic review). The company has been unable to find a buyer and now finds itself forced to essentially abandon the diversification strategy it initiated in 2014 by acquiring retail chain in parallel market segments. Just recently GameStop sold off Spring Mobile and is likely to use the money to pay off its debts and improve the likelihood of some private equity firm or a company like Amazon to buy it. No one expected it to be a great year for games retail, but it’s getting sadder.

Atlas Venture, the Cambridge, Mass.-based early-stage, biotech-focused venture firm, has for the first time raised an opportunity fund designed to help it support its most promising, maturing portfolio companies.

The $250 million fund, announced by the firm this morning, is pretty well-timed, as these things go. Though the public markets have bounced back a bit today after several stomach-churning drops in late December, there seems to be growing agreement that 2019 could be a much tougher time for companies to raise funding than was the case last year.

As famed VC Fred Wilson wrote in a post yesterday about his predictions for this year, venture investors are likely to be far more cautious if the country continues to see a “difficult macro business and political environment.” It would “not surprise me to see total venture capital investments in 2019 decline from 2018,” Wilson wrote. “And I think we will see financings take longer, diligence on new investments actually occur, and valuations to come under pressure for even the most attractive opportunities.”

Many venture firms raised their biggest funds ever in 2018, partly because they could, and partly with the understanding that market corrections are inevitable. Indeed, some kind of downturn has been widely anticipated for at least the last year, given that the last global economic downturn began in 2008.

Interestingly, while Atlas managed to line up capital commitments as the year came to a close, another well-known firm that apparently didn’t get as far along as it wanted, August Capital, has put a pin in its fundraising process, according to Axios, which suggests that infighting played a role.

We wouldn’t be surprised to see other firms struggle to either close their funds, or be forced to scale down their ambitions, in 2019.

Atlas Venture has five investing partners: Kevin Bitterman, Bruce Booth, Jean-François Formela, David Grayzel and Jason Rhodes. Some of the firm’s bets include the cancer drug developer Bicycle Therapeutics, and Spero Therapeutics, which is working on antibiotics to treat drug-resistant bacterial infections.

Atlas has been investing in biotech since 1993, but the firm invested in both life sciences and IT until 2014, when it separated those businesses, with the Atlas Venture brand remaining associated with its biotech bets. The IT side became the seed-stage firm Accomplice.

Atlas’s previous fund was a $350 million earlier-stage pool of capital that it announced in 2017.

Twitch superstar Tyler “Ninja” Blevins has finally settled the debate over just how much he earned in 2018. CNN reports that the gaming phenom pulled in close to $10 million last year, a little tidbit that he revealed to CNN during his press campaign on New Year’s Eve in New York City. (He also tried to get the good people of Times Square to “floss.” They weren’t having it.)

Ninja has more than 20 million subscribers on YouTube, and 12.5 million followers on Twitch, 40,000 of whom are paid subscribers. Ninja told CNN that he thinks of himself as an entrepreneur, comparing his stream to a coffee shop. “They’re gonna find another coffee shop if you’re not there … you have to be there all the time,” he said to CNN.

And when he says “all the time,” he means it. The streamer said he goes live for roughly 12 hours a day, which adds up to about 4,000 hours of gaming over the year.

Part of the money earned from each ad viewed on his YouTube channel, plus part of the profits from bits, donations and monthly subscriptions (ranging from $5, $10 or $25) on Twitch, all head into Ninja’s bank account. And that doesn’t include earnings made from tournament wins and endorsement deals with brands like Uber Eats, Samsung and Red Bull.

It shows just what is possible as esports and Twitch streaming continue to grow. And one of the most influential factors in that growth over 2018 was Fortnite, where streamers and pros not only put on a show for their viewers, but also set a different, far less toxic tone than other gaming communities.

Ninja, for example, decided to stop swearing and using other toxic language as his stream grew in popularity among young people. Other Fortnite streamers, such as NickMercs and Courage, have also fostered more inclusive, supportive communities around their streams.

Epic Games is also doing its part to give streamers like Ninja the format and opportunity to create even more engaging content on their streams through high-stakes tournament and competitive play events, including the Summer and Fall Skirmishes, the Winter Royale and the less-incentivized pop-up cups.

Though $10 million is less than the earnings of top traditional athletes (LeBron James at $36 million and Aaron Rodgers with $67 million, not including endorsements), it’s clear that Ninja and other Fortnite streamers are still very much on the rise.

As long as Epic Games keeps the attention of the gaming community at large, 2019 should see even more financial growth for Ninja and other Fortnite streamers.

It’s on like Donkey Kong! We’ll be seeing you next week, on January 9, 2019 at 6:00 PM, where we’ll mingle and run a full TC pitch-off with a bunch of great hardware companies. I’ve added 40 extra tickets, so hurry!

The event will be held at Work In Progress, 317 South 6th Street. Special thanks to those amazing folks who opened their doors to us during one of the busiest weeks in LV.

I’ve contacted the companies that will be pitching. If anyone drops out, I’ll choose some more, so there is still a chance to pitch.

Very special thanks go out to Shenzhen Valley Ventures, a hardware-focused venture capital firm for engineers, by engineers. They will be on hand to talk about their firm and would love to hear your pitches… and they are paying for the beer and pizza!

See you soon!

Netflix has issued a warning to its customers thanks to a meme challenge that has gone viral in which people are choosing to put blindfolds on and navigate the world around them just like the characters in the horror movie “Bird Box.”

Let the hilarity and the hospital visits begin.

For those who spent the holidays visiting friends and not watching Netflix, here’s a quick summary. Netflix released a horror concept movie called Bird Box starring Sandra Bullock. In Bird Box, Bullock and her children, Boy and Girl, are forced to wear blindfolds and navigate a river and spooky forest to protect themselves against the evil monster that, if seen, causes people to kill themselves.

The movie not only broke viewership records, it inspired a bevy of #BirdBoxChallenge memes, including ones in which folks video themselves blindfolded and attempting to do complete tasks, many of which are depicted in the movie.

Of course, these videos aren’t staying tucked away. They’re being shared with the world on social media. One viral meme shows a blindfolded family paddling away in their bathtub. Another shows a family running through their living room and one managing to hit the wall instead. There are numerous videos of random people walking blindfolded in cities like New York because sure, why not. One person put a hat over his head while driving.

Here’s a sampling.

The morning talk shows got into the mix as well.

Last month, the streaming service announced in a tweet that more than 45 million Netflix accounts had streamed Bird Box, which set a new record for the best-ever first week for a Netflix film.