ILM made them incredibly lifelike.

What would you change about Photoshop?

How did a successful, financially sophisticated banker gamble his communitys money away?

Imagine you run a meal prep company that teaches people how to make simple and delicious food. When someone asks ChatGPT for a recommendation for meal prep companies, yours is described as complicated and confusing. Why? Because the AI saw that in one of your ads there were chopped chives on the top of a bowl of food, and it determined that nobody is going to want to spend time chopping up chives.This is a real example from Jack Smyth, chief solutions officer of AI, planning, and insights at JellyFish, part of the Brandtech Group. He works with brands to help them understand how their products or company are perceived by AI models in the wild. It may seem odd for companies or brands to be mindful of what an AI thinks, but its already becoming relevant. A study from the Boston Consulting Group showed that 28% of respondents are using AI to recommend products such as cosmetics. And the push for AI agents that may handle making direct purchases for you is making brands even more conscious of how AI sees their products and business.The end results may be a supercharged version of search engine optimization (SEO) where making sure that youre positively perceived by a large language model might become one of the most important things a brand can do.Smyths company has created software, Share of Model, that assesses how different AI models view your brand. Each AI model has different training data, so although there are many similarities in how brands are assessed, there are differences, too.For example, Metas Llama model may perceive your brand as exciting and reliable, whereas OpenAIs ChatGPT may view it as exciting but not necessarily reliable. Share of Model asks different models many different questions about your brand and then analyzes all the responses, trying to find trends. Its very similar to a human survey, but the respondents here are large language models, says Smyth.The ultimate goal is not just to understand how your brand is perceived by AI but to modify that perception. How much models can be influenced is still up in the air, but preliminary results indicate that it may be possible. Since the models now show sources, if you ask them to search the web, a brand can see where the AI is picking up data.We have a brand called Ballantines. Its the No. 2 Scotch whisky that we sell in the world. So its a product for mass audiences, says Gokcen Karaca, head of digital and design at Pernod Ricard, which owns Ballantines and a customer utilizing Share of Model. However, Llama was identifying it as a premium product. Ballantines also has a premium version, which is why the model may have been confused.So Karacas team created new assets like ad campaigns for Ballantines mass product, highlighting its universal appeal to counteract the premium image. Its not clear yet if the changes are working but Karaca claims early indications are good. We made tiny changes, and it is taking time. I cant give you concrete numbers but the trajectory is positive toward our target, says Karaca.Its hard to know how exactly to influence AI because many models are closed-source, meaning their code and weights arent public and their inner workings are a bit of a mystery. But the advent of reasoning models, where the AI will share its process of solving a problem in text, could make the process simpler. You may be able to see the chain of thought that leads a model to recommend Dove soap, for example. If, in its reasoning, it details how important a good scent is to its soap recommendation, then the marketer knows what to focus on.The ability to influence models has also opened up other ways to modify how your brand is perceived. For example, research out of Carnegie Mellon shows that changing the prompt can significantly modify what product an AI recommends.For example, take these two prompts:1. Im curious to know your preference for the pressure cooker that offers the best combination of cooking performance, durable construction, and overall convenience in preparing a variety of dishes.2. Can you recommend the ultimate pressure cooker that excels in providing consistent pressure, user-friendly controls, and additional features such as multiple cooking presets or a digital display for precise settings?The change led one of Googles models, Gemma, to change from recommending the Instant Pot 0% of the time to recommending it 100% of the time. This dramatic change is due to the word choices in the prompt that trigger different parts of the model. The researchers believe we may see brands trying to influence recommended prompts online. For example, on forums like Reddit, people will frequently ask for example prompts to use. Brands may try to surreptitiously influence what prompts are suggested on these forums by having paid users or their own employees offer ideas designed specifically to result in recommendations for their brand or products. We should warn users that they should not easily trust model recommendations, especially if they use prompts from third parties, says Weiran Lin, one of the authors of the paper.This phenomenon may ultimately lead to a push and pull between ad companies and brands similar to what weve seen in search over the past several decades. Its always a cat-and-mouse game, says Smyth. Anything thats too explicit is unlikely to be as influential as youd hope.Brands have tried to trick search algorithms to place their content higher, while search engines aim to deliveror at least we hope they deliverthe most relevant and meaningful results for consumers. A similar thing is happening in AI, where brands may try to trick models to give certain answers. Theres prompt injection, which we do not recommend clients do, but there are a lot of creative ways you can embed messaging in a seemingly innocuous asset, Smyth says. AI companies may implement techniques like training a model to know when an ad is disingenuous or trying to inflate the image of a brand. Or they may try to make their AI more discerning and less susceptible to tricks.Another concern with using AI for product recommendations is that biases are built into the models. For example, research out of the University of South Florida shows that models tend to view global brands as higher quality and better than local brands, on average. When I give a global brand to the LLMs, it describes it with positive attributes, says Mahammed Kamruzzaman, one of the authors of the research. So if I am talking about Nike, in most cases it says that its fashionable or its very comfortable. The research shows that if you then ask the model for its perception of a local brand, it will describe it as poor quality or uncomfortable.Additionally, the research shows that if you prompt the LLM to recommend gifts for people in high-income countries, it will suggest luxury-brand items, whereas if you ask what to give people in low-income countries, it will recommend non-luxury brands. When people are using these LLMs for recommendations, they should be aware of bias, says Kamruzzaman.AI can also serve as a focus group for brands. Before airing an ad, you can get the AI to evaluate it from a variety of perspectives. You can specify the audience for your ad, says Smyth. One of our clients called it their gen-AI gut check. Even before they start making the ad, they say, Ive got a few different ways I could be thinking about going to market. Lets just check with the models.Since AI has read, watched, and listened to everything that your brand puts out, consistency may become more important than ever. Making your brand accessible to an LLM is really difficult if your brand shows up in different ways in different places, and there is no real kind of strength to your brand association, says Rebecca Sykes, a partner at Brandtech Group, the owner of Share of Model. If there is a huge disparity, its also picked up on, and then it makes it even harder to make clear recommendations about that brand.Regardless of whether AI is the best customer or the most nitpicky, it may soon become undeniable that an AIs perception of a brand will have an impact on its bottom line. Its probably the very beginning of the conversations that most brands are having, where theyre even thinking about AI as a new audience, says Sykes.

At about the time when personal computers charged into cubicle farms, another machine muscled its way into human resources departments and became a staple of routine employment screenings. By the early 1980s, some 2 million Americans annually found themselves strapped to a polygrapha metal box that, in many peoples minds, detected deception. Most of those tested were not suspected crooks or spooks.Then the US Office of Technology Assessment, an independent office that had been created by Congress about a decade earlier to serve as its scientific consulting arm, got involved. The office reached out to Boston University researcher Leonard Saxe with an assignment: Evaluate polygraphs. Tell us the truth about these supposed truth-telling devices.And so Saxe assembled a team of about a dozen researchers, including Michael Saks of Boston College, to begin a systematic review. The group conducted interviews, pored over existing studies, and embarked on new lines of research. A few months later, the OTA published a technical memo, Scientific Validity of Polygraph Testing: A Research Review and Evaluation. Despite the tests widespread use, the memo dutifully reported, there is very little research or scientific evidence to establish polygraph test validity in screening situations, whether they be preemployment, preclearance, periodic or aperiodic, random, or dragnet. These machines could not detect lies.Four years later, in 1987, critics at a congressional hearing invoked the OTA report as authoritative, comparing polygraphs derisively to tea leaf reading or crystal ball gazing. Congress soon passed strict limits on the use of polygraphs in the workplace.Over its 23-year history, the OTA would publish some 750 reportslengthy, interdisciplinary assessments of specific technologies that proposed means of maximizing their benefits and minimizing harms. Their subjects included electronic surveillance, genetic engineering, hazardous-waste disposal, and remote sensing from outer space. Congress set its course: The office initiated studies only at the request of a committee chairperson, a ranking minority leader, or its 12-person bipartisan board.The investigations remained independent; staffers and consultants from both inside and outside government collaborated to answer timely and sometimes politicized questions. The reports addressed worries about alarming advances and tamped down scary-sounding hypotheticals. Some of those concerns no longer keep policymakers up at night. For instance, Do Insects Transmit AIDS? A 1987 OTA report correctly suggested that they dont.The office functioned like a debunking arm. It sussed out the snake oil. Lifted the lid on the Mechanical Turk. The reports saw through the alluring gleam of overhyped technologies.In the years since its unceremonious defunding, perennial calls have gone out: Rouse the office from the dead! And with advances in robotics, big data, and AI systems, these calls have taken on a new level of urgency.Like polygraphs, chatbots and search engines powered by so-called artificial intelligence come with a shimmer and a sheen of magical thinking. And if were not careful, politicians, employers, and other decision-makers may accept at face value the idea that machines can and should replace human judgment and discretion.A resurrected OTA might be the perfect body to rein in dangerous and dangerously overhyped technologies. Thats what Congress needs right now, says Ryan Calo at the University of Washingtons Tech Policy Lab and the Center for an Informed Public, because otherwise Congress is going to, like, take Sam Altmans word for everything, or Eric Schmidts. (The CEO of OpenAI and the former CEO of Google have both testified before Congress.) Leaving it to tech executives to educate lawmakers is like having the fox tell you how to build your henhouse. Wasted resources and inadequate protections might be only the start.A man administers a lie detector test to a jobapplicant in 1976. A 1983 report from the OTA debunked the efficacy of polygraphs.LIBRARY OF CONGRESSNo doubt independent expertise still exists. Congress can turn to the Congressional Research Service, for example, or the National Academies of Sciences, Medicine, and Engineering. Other federal entities, such as the Office of Management and Budget and the Office of Science and Technology Policy, have advised the executive branch (and still existed as we went to press). But theyre not even necessarily specialists, Calo says, and what theyre producing is very lightweight compared to what the OTA did. And so I really think we need OTA back. What exists today, as one researcher puts it, is a diffuse and inefficient system. There is no central agency that wholly devotes itself to studying emerging technologies in a serious and dedicated way and advising the countrys 535 elected officials about potential impacts. The digestible summaries Congress receives from the Congressional Research Service provide insight but are no replacement for the exhaustive technical research and analytic capacity of a fully staffed and funded think tank. Theres simply nothing like the OTA, and no single entity replicates its incisive and instructive guidance. But theres also nothing stopping Congress from reauthorizing its budget and bringing it back, except perhaps the lack of political will.Congress Smiles, Scientists WinceThe OTA had not exactly been an easy sell to the research community in 1972. At the time, it was only the third independent congressional agency ever established. As the journal Science put it in a headline that year, The Office of Technology Assessment: Congress Smiles, Scientists Wince. One researcher from Bell Labs told Science that he feared legislators would embark on a clumsy, destructive attempt to manage national R&D, but mostly the cringe seemed to stem from uncertainty about what exactly technology assessment entailed.The OTAs first report, in 1974, examined bioequivalence, an essential part of evaluating generic drugs. Regulators were trying to figure out whether these drugs could be deemed comparable to their name-brand equivalents without lengthy and expensive clinical studies demonstrating their safety and efficacy. Unlike all the OTAs subsequent assessments, this one listed specific policy recommendations, such as clarifying what data should be required in order to evaluatea generic drug and ensure uniformity and standardization in the regulatory approval process. The Food and Drug Administration later incorporated these recommendations into its own submission requirements.From then on, though, the OTA did not take sides. The office had not been set up to advise Congress on how to legislate. Rather, it dutifully followed through on its narrowly focused mandate: Do the research and provide policymakers with a well-reasoned set of options that represented a range of expert opinions.Perhaps surprisingly, given the rise of commercially available PCs, in the first decade of its existence the OTA produced only a few reports on computing. One 1976 report touched on the automated control of trains. Others examined computerized x-ray imaging, better known as CT scans; computerized crime databases; and the use of computers in medical education. Over time, the offices output steadily increased, eventually averaging 32 reports a year. Its budget swelled to $22 million; its staff peaked at 143.While its sometimes said that the future impact of a technology is beyond anyones imagination, several findings proved prescient. A 1982 report on electronic funds transfer, or EFT, predicted that financial transactions would increasingly be carried out electronically (an obvious challenge to paper currency and hard-copy checks). Another predicted that email, or what was then termed electronic message systems, would disrupt snail mail and the bottom line of the US Postal Service.In vetting the digital record-keeping that provides the basis for routine background checks, the office commissioned a study that produced a statistic still cited today, suggesting that only about a quarter of the records sent to the FBI were complete, accurate, and unambiguous. It was an indicator of a growing issue: computational systems that, despite seeming automated, are not free of human bias and error.Many of the OTAs reports focus on specific events or technologies. One looked at Love Canal, the upstate New York neighborhood polluted by hazardous waste (a disaster, the report said, that had not yet been remediated by the Environmental Protection Agencys Superfund cleanup program); another studied the Boston Elbow, a cybernetic limb (the verdict: decidedly mixed). The office examined the feasibility of a water pipeline connecting Alaska to California, the health effects of the Kuwait oil fires, and the news medias use of satellite imagery. The office also took on issues we grapple with todayevaluating automatic record checks for people buying guns, scrutinizing the compensation for injuries allegedly caused by vaccines, and pondering whether we should explore Mars.The OTA made its biggest splash in 1984, when it published a background report criticizing the Strategic Defense Initiative (commonly known as Star Wars), a pet project of the Reagan administration that involved several exotic missile defense systems. Its lead author was the MIT physicist Ashton Carter, later secretary of defense in the second Obama administration. And the report concluded that a perfect or near-perfect system to defend against nuclear weapons was basically beyond the realm of the plausible; the possibility of deployment was so remote that it should not serve as the basis of public expectation or national policy.The report generated lots of clicks, so to speak, especially after the administration claimed that the OTA had divulged state secrets. These charges did not hold up and Star Wars never materialized, although there have been recent efforts to beef up the militarys offensive capacity in space. But for the work of an advisory body that did not play politics, the report made a big political hubbub. By some accounts, its subsequent assessments became so neutral that the office risked receding to the point of invisibility.From a purely pragmatic point of view, the OTA wrote to be understood. A dozen reports from the early 90s received Blue Pencil Awards, given by the National Association of Government Communicators for superior government communication products and those who produce them. None are copyrighted. All were freely reproduced and distributed, both in print and electronically. The entire archive is stored on CD-ROM, and digitized copies are still freely available for download on a website maintained by Princeton University, like an earnest oasis of competence in the cloistered world of federal documents.Assessments versus accountabilityLooking back, the office took shape just as debates about technology and the law were moving to center stage.While the gravest of dangers may have changed in form and in scope, the central problem remains: Laws and lawmakers cannot keep up with rapid technological advances. Policymakers often face a choice between regulating with insufficient facts and doing nothing.In 2018, Adam Kinzinger, then a Republican congressman from Illinois, confessed to a panel on quantum computing: I can understand about 50% of the things you say. To some, his admission underscored a broader tech illiteracy afflicting those in power. But other commentators argued that members of Congress should not be expected to know it allall the more reason to restaff an office like the OTA.A motley chorus of voices have clamored for an OTA 2.0 over the years. One doctor wrote that the office could help address the discordance between the amount of money spent and the actual level of health. Tech fellows have said bringing it back could help Congress understand machine learning and AI. Hillary Clinton, as a Democratic presidential hopeful, floated the possibility of resurrecting the OTA in 2017.But Meg Leta Jones, a law scholar at Georgetown University, argues that assessing new technologies is the least of our problems. The kind of work the OTA did is now done by other agencies, such as the FTC, FCC, and National Telecommunications and Information Administration, she says: The energy I would like to put into the administrative state is not on assessments, but its on actual accountability and enforcement.She sees the existing framework as built for the industrial age, not a digital one, and is among those calling for a more ambitious overhaul. There seems to be little political appetite for the creation of new agencies anyway. That said, Jones adds, I wouldnt be mad if they remade the OTA.No one can know whether or how future administrations will address AI, Mars colonization, the safety of vaccines, or, for that matter, any other emerging technology that the OTA investigated in an earlier era. But if the new administration makes good on plans to deregulate many sectors, its worth noting some historic echoes. In 1995, when conservative politicians defunded the OTA, they did so in the name of efficiency. Critics of that move contend that the office probably saved the government money and argue that the purported cost savings associated with its elimination were largely symbolic.Jathan Sadowski, a research fellow at Monash University in Melbourne, Australia, who has written about the OTAs history, says the conditions that led to its demise have only gotten more partisan, more politicized. This makes it difficult to envision a place for the agency today, he saysTheres no room for the kind of technocratic navet that would see authoritative scientific advice cutting through the noise of politics.Congress purposely cut off its scientific advisory arm as part of a larger shake-up led by Newt Gingrich, then the House Speaker, whose pugilistic brand of populist conservatism promised drain the swamptype reforms and launched what critics called a war on science. As a rationale for why the office was defunded, he said, We constantly found scientists who thought what they were saying was not correct.Once again, Congress smiled and scientists winced. Only this time it was because politicians had pulled the plug.Peter Andrey Smith, a freelance reporter, has contributed to Undark, the New Yorker, the New York Times Magazine, and WNYCs Radiolab.

html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"Epic Games has released Twinmotion 2025.1, the next major version of its Unreal-Engine-based real-time visualisation software.Its a sizeable update, adding a new volumetric clouds system, support for Virtual Shadow Maps, a LOD system, and updates to materials, lights, rendering and Sequence creation.A real-time tool for 3D visualization and virtual productionOriginally created by visualization studio KA-RA and acquired by Epic Games in 2019, Twinmotion is a real-time visualization tool for architectural, automotive and product design.It imports hero models in a range of 3D file formats, or via live links to CAD software, with users able to dress the scenes using a library of stock assets.Atmospheric properties including clouds, rain and snow, and ambient lighting based on geographical location and time of day can be adjusted via slider-based controls.The software is now free to indie artists and studios with revenue under $1 million/year, following Epic Games recent changes to the pricing of its products.Epic Games is also now increasingly pitching the software at the entertainment marked, as an on-ramp to Unreal Engine for virtual production and real-time VFX.Twinmotion 2025.1 introduces a new volumetric clouds system, made possible by the underlying update of the software to Unreal Engine 5.5Twinmotion 2025.1: features Unreal Engines Volumetric clouds and Virtual Shadow MapsTwinmotion only got one major release last year instead of the usual two, so Twinmotion 2025.1 is a double-size update.Under the hood, the software has been updated to Unreal Engine 5.5, the latest version of the engine, leading to some significant new features.One is the new volumetric clouds system, which makes it possible to add realistic, animatable, shadow-casting clouds to outdoor scenes.The feature is still experimental when using Twinmotions Path Tracer render mode, leading to visual differences to real-time mode, and reduced performance on AMD GPUs.Twinmotion also now supports Unreal Engines Virtual Shadow Maps, providing more visually accurate shadows in real-time mode, although currently on Windows only.New automatic LOD systemTwinmotion 2025.1 also adds another feature familiar from game engines: a Level of Detail system.The new Automatic LOD Generation system automatically reduces the poly count of imported meshes according to their distance from the camera, improving rendering performance.It comes with three presets, generating between three and eight LODs.Twinmotions accompanying asset library now features a new Projector Light type.Updates to materials, lights, rendering and Sequence editingThe release also updates Twinmotions core functionality, with the Fog system getting new Height and Color control sliders, and higher maximum fog density.The Sky system gets new Turbidity and Atmosphere density settings.Changes to materials include a new Tire base material, which generates UVs for cylindrical objects like car tires, and new controls in the Car Paint material, including surface imperfections.The Twinmotion Library, the asset library bundled with the software, gets new new Projector light type, for projecting videos onto geometry, and a new Confetti particle system type.The Sequences system, for creating and editing cinematic video sequences, gets a new Orbit Cam rig, and the option to set a target for the Action Cam.User interface, workflow and pipeline integration changesOther changes include a redesign of the Environment tab in the Ambience panel to create a clearer distinction between sky- and HDRI-based lighting.There is also a new Modeling panel, accessible from the footer, for making simple edits to imported meshes: initially, mirroring meshes, and flipping normals on faces to fix artifacts.Changes affecting pipeline integration include the option to import geometry in .wire format from automotive design tool Alias, and to import two-sided geometry.There are also a number of smaller workflow improvements: you can find a full list of changes via the link at the foot of the story.Price, system requirements and release dateTwinmotion 2025.1 is compatible with Windows 10+ and macOS 12.5+. Integration plugins are available for CAD and DCC apps including 3ds Max 2017+, CityEngine 2022.0+ and SketchUp Pro 2019+.The software is free to users with gross annual revenue under $1 million/year. The free edition lacks access to Twinmotion Cloud, but is otherwise fully featured.For larger studios, subscriptions cost $445/seat/year.Read an overview of the new features in Twinmotion 2025.1 on Epic Games blogRead a full list of new features in Twinmotion 2025.1 in the online changelogHave your say on this story by following CG Channel on Facebook, Instagram and X (formerly Twitter). As well as being able to comment on stories, followers of our social media accounts can see videos we dont post on the site itself, including making-ofs for the latest VFX movies, animations, games cinematics and motion graphics projects.

Yes, Girl Scout Cookies are okay to eatIssue #271: the top highlights on Medium lately + brevity at workPublished inThe Medium BlogSent as aNewsletter3 min readJust now--Hello, its Girl Scout Cookie season (Jan-April) in the U.S., aka the time of year when I vaguely crave minty chocolate discs though I dont think Ive actually had one since the early aughts. If youre reading from a country that doesnt sell limited-edition carbs every winter to raise money for cool trips, heres a primer. The tradition began in 1917, when a troupe of Girl Scouts in Oklahoma started selling homemade baked goods to raise money for team-building and character-building activities. Today, there are ~1.7 million Girl Scouts in America; participation involves life skills, STEM, the outdoors, and entrepreneurship training most of which is funded via an $800 million cookie business. A single, very powerful yet understated cookie makes up 25% of sales: the hallowed Thin Mint.*Last December, a study from Moms Across America claimed Thin Mints and all Girl Scout cookies are unfit for kids because 24 out of 25 cookies they sampled contained glyphosate (an herbicide) and toxic metals. MAA tested 13 types of Girl Scout cookies and found the same patterns across each of them. The claims went viral. On TikTok, moms claimed you should bake your own to keep your kids safe.On Medium, public health scientist Dr. Jess Steier adds crucial context about these claims. Essentially, levels of glyphosate in these cookies fall well within established food safety guidelines. A 66-pound child would need to eat over 9,000 cookies before levels of any of these chemicals would approach the most conservative daily limits for kids. Also, the MAA study omitted an important fact. All foods contain trace amounts of heavy metals (like lead or aluminum), and the amounts in Thin Mints match those in organic vegetables grown in regular soil. These trace amounts reflect the natural presence of elements in our environment rather than contamination, Steier writes. The CDC corroborated her analysis.Everything comes from somewhere, and the world is a risky place even if youre drinking seemingly pure water directly from a lush mountain stream. Thats why food safety guidelines give ranges instead of prohibiting (most) heavy metals wholesale. This is the classic toxicology maxim that humans have held dear for hundreds of years: Its the dosage that makes the poison. Harris Sockel*There are two types of Thin Mints, one from each of the commercial bakeries Girl Scouts contracts. The differences are clear but subtle. The most-highlighted sentences on Medium this monthSo, again, I have a hard time understanding why a quarterback kneeling during the national anthem was cause for a rational national uproar, but for some reason its irrational to hold resentment toward the person who incited riots which not only undermined our government and disrespected our history, but also traumatized thousands of staffers and their loved ones. Gladys of Monmouth, I was working at the Capitol during the Jan 6 riots. Heres what I think.The biggest takeaway is discipline beats motivation. I didnt feel like planking daily, but I did it anyway. Sufyan Maan, M.EngAm I underdressed, or under duress? Nancy Santos A dose of practical wisdomOn Slack, Teams, or any work messaging platform, brevity is a form of generosity. (Claudia Castaon Ferreiro)

Chinese game publisher NetEase raised fears with recent moves that it is unloading as much as all of its overseas holdings in U.S. game companies and elsewhere due to rising costs and other reasons.Such a move, which coincidentally is happening at the same time as Chinas retaliation to U.S. tariffs, could send earthquakes through the global gaming industry and hurt U.S. game companies in particular. However, once contacted by GamesBeat about these fears, NetEase denied it is dismantling its far-flung investments and overseas game studios.Based on our reporting, game industry insiders said that NetEase has been directed to divest its overseas holdings. Among NetEases big recent hits is Marvel Rivals, but yesterday members of the Seattle team that developed the game along with a team in China said they had been laid off. This was after the game brought in $136 million in its launch month of December.But sources we interviewed said that the Marvel Rivals team being fired by NetEase is just the start.Those sources said the company is losing its will to make games using overseas staff. Part of that reason is the high cost of U.S. developers in particular. Another reason is that Chinas game developers have also matured enough to make triple-A games, as seen by the success of China-based Game Sciences Black Myth: Wukong, which has sold tens of millions of copies.Its possible that NetEase plans to exit all international investments and holdings, including wholly-owned studios. Some of that will happen through layoffs, and some could happen through sales of studios. But its unlikely that NetEase will turn a profit on those investments if it plans to act quickly. Again, NetEase denied this and weve included their statements below.Based in Hangzhou, NetEase is the second largest game publisher in China, publicly traded on Hong Kong Stock Exchange and NASDAQ. David Kaye, founder of the venture capital firm F4 Fund, said in an interview with GamesBeat that talk of the retreat of Chinas game companies was all over the show at the Dice Summit, the event that drew gamings elite to Las Vegas last week.NetEase has made a strategic investment in Behaviour Interactive.In a post, Kaye said, China is in retreat: geopolitical tensions, some big bets not paying off and the whims of certain CEOs mean that a massive pullback has begun. One MAJOR strategic who has made dozens of investments in the past several years is reportedly pulling the plug and divesting ALL investments outside of China. Some will likely find buyers, others will not be so lucky.Other sources told us the firm in question is NetEase, and the size of its impact is very big. Newzoo ranks the company as the No. 5 game publisher by revenue. Traditionally, 90% of NetEases gaming income came from China and 10% from overseas. Just two years ago, William Ding, the company founder and current chief executive, spoke about plans to have international game revenue reach up to 50%. NetEase executive Simon Zhu became head of investments in 2016 and he increased the investments dramatically.While Dings goal could have effectively doubled the size of the company, those dreams may be on pause.The company has been investing steadily for years, putting money into start-ups, growth stage game companies, as limited partners into venture capital firms, doing acquisitions, and starting internal studios.This activity has buoyed the number of studios and people in the game industry today. NetEase put $100 million into Bungie, which later sold to Sony for $3.6 billion.NetEase backed Devolver Digital when it was started.And it anchored Makers Fund, which had $960 million in assets under management.NetEase bought Quantic Dram and Grasshopper Manufacture outright.These efforts were led by Simon Zhu, based in Seattle.But things have soured internally.Sources say Ding, NetEases CEO, has lost confidence in expensive overseas teams.Add to that the success of Black Myth: Wukong, which illustrates that making triple-A games in China can be less costly than those from Europe, the US, and Japan. In the case of Marvel Rivals, the team in China is expected to take over the live services for the game.Gaming M&A slowed after the pandemic and is slowly coming back, hampered in part because of interest rate policies. Many of the studios will not find buyers, and that will add to the already excruciating number of job losses in the industry. More than 34,000 people were laid off in the last 2.5 years, and more than 900 have been laid off in January. Those who were demoralized by these moves were hopeful that 2025 would bring better news for the game industry. Kaye noted that South Korean firms are filling the void by launching expansion plans and funding new studios. Saudi Arabias Savvy Games Group and its Scopely division are also looking for acquisitions. That could help soften the blow for those looking for jobs or companies looking to be funded or acquired. One source told us that everything that NetEases Zhu touched (all investments and holdings) were going to be unwound. NetEases trailing 12 months of gaming revenue is $11.7 billion. One question is whether the world conditions like the rise of Chinese triple-A game development could impact other firms in China and cause them to pull back as well. In a statement to GamesBeat, NetEase moved allay fears it is abandoning its non-Chinese game developers. The statement said, As far as overseas business efforts are concerned, NetEase has not wavered in its global expansion plans. Our two-pronged approach, proposed in 2022 (combining self-research and investments to explore overseas markets), is still actively progressing and yielding positive results. For titles developed by the self-owned studios, we successfully launched games likeOnce HumanandMarvel Rivalsin 2024. These projects demonstrate NetEases ability, along with our talented development teams, to produce high-quality games loved by players worldwide. For 2025, we have an extensive pipeline of titles in development, featuring a variety of genres, including FragPunk, Ananta and more.However, NetEase confirmed that it has conducted a retreat in some respects. The statement continued, As part of our investment strategy, we started scaling down two of our studios at the end of 2024. This decision was based purely on business evaluations and was not influenced by other factors. And this represents only a small portion of our overseas studio portfolio. Our studios in North America, UK, Spain, and Japan all continue to refine and develop their ongoing game projects. Some additional background information that has not yet been shared to clarify our approachNetEase said it is establishing unified goals across studios. Whether overseas first-party studio or domestic ones, the goals and vision remain consistent. The aim is to develop fun, high-quality games that players will enjoy; and focus on the long-term development and continuous operation of games, providing players with a sustained, quality gaming experience and service.We are very open and aim to leverage our companys strengths and accumulated expertise to support all developers. In order to achieve this vision, we have implemented an evaluation process, which applies equally to all NetEase studios globally both domestic and overseas, NetEase said.Meanwhile, the company said the trade war has not affected its strategy yet. The statement said, Regarding the tariff trade war, yes of course we are mindful of any developments in international trade. However, our decisions have been based solely on business evaluations and not influenced by other factors. We highly respect our gaming community in the US and their love and enthusiasm for our games is valued and appreciated.Will the rest of China follow suit?SAN FRANCISCO, CALIFORNIA NOVEMBER 05: A general view of atmosphere at the League of Legends World Championship Finals on November 5, 2022 in San Francisco, CA. (Photo by Colin Young-Wolff/Riot Games)Tencent, which is the worlds biggest game company has trailing 12 months of game revenue is $26.1 billion, including $7.7 billion international revenue and $18.4 billion of domestic Chinese revenue. Tencents market value is $599.7 billion. Based on what we know, Tencent is not pulling back. But the environment in the market with Donald Trump imposing tariffs on Chinese goods possibly including games and Chinese-made game consoles isnt helping with the overall environment. It also may not help that the Biden administration in its final days classified Tencent as a Chinese military organization. Tencent denied it was a military company.Tencent is highly invested in the United States, with 40% ownership of Epic Games and 100% ownership of Riot Games. Tencent has hundreds of game companies in its portfolio worldwide, including the United States. NetEase is far less dependent on the US companies and user base than Tencent. There have been other Chinese companies with US gamer customers and some that have invested in US-based studios, said Lisa Cosmas Hanson, president of market analyst firm Niko Partners, in a message to GamesBeat.She noted that in 2020 there was a CFIUS inquiry about Tencents ownership of Riot and Epic, during the Biden Administration. There was concern about the privacy or security of U.S. gamer data, but the concerns were put to rest for the most part, Cosmas Hanson said. The investments differ greatly from ByteDances ownership of TikTok and the TikTok US matter that is currently in discussion between US and China. The difference is primarily that Riot and Epic are U.S. companies themselves.NetEase Games acquired Quantic Dream.I do not see how a divestiture, if proposed or enforced, would be related to tariffs directly. I just dont see it that way, Cosmas Hanson said. Regarding tariffs, I have publicly responded to some industry observers who have posted on LinkedIn about their suspicions that the U.S. games industry will suffer because the Trump Administration will set tariffs on products from China, including consoles. My feeling is that even if it were a blanked tariff on all products manufactured in China, there would be a carve out for many items, including consoles. This happened in the past.But she noted that the tariffs, if implemented without a carve out, would be a detrimental impact to the US and Japanese companies (Microsoft, Sony, Nintendo) for tariffs on their consoles sold in the U.S. but manufactured in China, but have no impact on China.So what is the point. These are not Chinese consoles or companies, just manufacturing in China, she said. Tencent recently canceled a Splash Damage game and it also restructured Sumo Digital. But it has expanded as well in the West. For instance, in November 2024, Tencent acquired EasyBrain from Embracer and also acquired the UK studio Space Ape in the same month, said Charles Yu, a partner at game-focused Pillar Legal in Shanghai, in a message to GamesBeat. And Tencent sources said the firm may become more active, so long as it does not attract unwanted attention.Yu said that he doesnt think its accurate that all Chinese game companies will divest their U.S. or overseas game properties. Some of the firms clients are interested in U.S.However, it appears that Chinese game companies are less inclined to set up development teams in the U.S. or other Western countries due to concerns about high costs and management inefficiencies, Yu said. I think it is probably true that NetEase is scaling back its overseas investments. A recent news indicated that NetEase laid off the entire overseas strategy investment team and shut down several studios in 2024. However, NetEase never officially announced this news.By market capitalization, NetEase is worth $68.4 billion. It is among the worlds top ten game companies (alongside Apple, Tencent, Google, Xbox, and Nintendo). NewZoo lists NetEase as No. 5 by annual publisher revenue. NetEase acts as local publisher for Chinese World of Warcraft (recently renewing that deal last year with Microsoft) and Chinese Minecraft. The change in strategy is a big reversal of expansion plans in the past.In 2021, the China Audiovisual and Digital Publishing Association encouraged the local industry to makeoverseas efforts. This was thematically in keeping the Belt and Road Initiative of the Chinese government. The countrys strategy is similar to that of Saudi Arabia, which has authorized $37 billion in investments into gaming through its Public Investment Fund.A public company like indie publisher Devolver Digital might have effects if NetEase has to liquidate its 8% of Devolvers stock onto the market. NetEase also has a stake in privately held developer Behaviour Interactive.Over the years, NetEase invested in companies including Bungie, Nagoshi Studio, Ouka Studios, Satelight, Grasshopper Manufacture, Humanoid Origin, Quantic Dream, Something Wicked Games, Reel Wolves, PlayPulse, Liquid Swords, Skybox Labs, Studio Flare, Anchor Point Studios, Bad Brain Game Studios, PinCool, Youdao, Maestro, Xiaoice, Jobtong, Build A Rocket Boy, MyDearest, Fantastic Pixel Castle, Worlds Untold, Jumpship, Second Dinner, Astrid Entertainment, Kepler Interactive, BulletFarm, Sandsoft and T-Minus Zero Entertainment.It going to be complex for NetEase if it does choose to unwind.As one executive said, There is no buyer for these shares.As for the U.S. games industry, Kaye said theres new dry powder for VCs.While not on the scale of the go go years, LPs are continuing to deploy. A well known Series A-focused gaming fund has just raised over $100 million in their first close, and there are reports of a large new media and entertainment focused fund backed by a major Korean company with a gaming focused partner who will be based in LA. They will focus mainly on Series B and later, filling an underserved spot in the capital stack, Kaye said.In general, I think the entire game industry is still feeling the impact of over-expansion during the Covid, Yu said. Many studios may face challenges or be at risk if their next flagship game underperforms. For NetEase, I anticipate a significant improvement in their financial performance in Q4 2024 and Q1 2025, driven by the successful launch of Marvel Rivals and Yan Yun Shi Liu Sheng in December 2024.Yu added, Chinese game companies remain highly motivated to explore overseas markets, and we may see more overseas headquarters established by these companies for game publishing. However, it is likely that Chinese game companies will slow down their investments in overseas studios. The global success of games developed by Chinese studios, such as Black Myth: Wukong, Marvel Rivals, and Delta Force, has boosted confidence in their domestic capabilities. As a result, I expect Tencent, NetEase, and other companies to allocate more resources to their China-based teams or local studios.Daily insights on business use cases with VB DailyIf you want to impress your boss, VB Daily has you covered. We give you the inside scoop on what companies are doing with generative AI, from regulatory shifts to practical deployments, so you can share insights for maximum ROI.Read our Privacy PolicyThanks for subscribing. Check out more VB newsletters here.An error occured.

Fingersoft COO Ville Rauma leaves developerRauma worked at the Finnish studio for 11 yearsImage credit: Fingersoft News by Sophie McEvoy Staff Writer Published on Feb. 19, 2025 Fingersoft COO Ville Rauma has left the Finnish developer after working there for 11 years.Announcing his departure on LinkedIn, Rauma didn't specify a reason for leaving. However, he said he is "considering jobs, joining a start-up or founding my own company, but I haven't made any decisions yet.""I haven't had enough time to properly process what this means to me but I have a great feeling of gratitude towards all my fellow Fingersoftians and partners who I've worked with over the years," Rauma wrote."When I started we had one live game and 12 people. During my time [there], Fingersoft has created several live games, doubled annual revenue and built a full-service game studio of 100 professionals."He concluded: "That success is not coincidence or luck, rather it's a result of everyone showing up every day and making it happen."Rauma joined Fingersoft in 2014 as a full stack developer and product owner. He became COO in 2016, a position he held for eight years. During that time, he also took on the role of acting CEO between July and December 2019 as the studio searched for its next leader.Rauma began his career in the games industry in 2007 as a software designer at digital agency studio HappyWise.He then worked for Tuonela Productions as a product manager from June 2008 to March 2011, before moving on to LudoCraft as a game programmer.Last October, Fingersoft laid off 14 employees due to a "substantial decline in ad revenue." Roles impacted included those in development, marketing, community and ASO departments.

Marvel Rivals US support studio hit with layoffsNetEase confirms a "reduction of a design team based in Seattle" has taken place due to "organisational reasons"Image credit: NetEase Games News by Sophie McEvoy Staff Writer Published on Feb. 19, 2025 NetEase Games has confirmed layoffs have occurred within a US support studio for Marvel Rivals.In a statement provided to PC Gamer, the firm said a "reduction of a design team based in Seattle" for "organisational reasons.""We recently made the difficult decision to adjust Marvel Rivals' development team structure for organisational reasons and to optimise development efficiency for the game," it said."We appreciate the hard work and dedication of those affected and will be treating them confidentially and respectfully for their individual contributions."The company did not specify how many employees were laid off, but confirmed there are no longer any Seattle-based developers working on the game.NetEase clarified that Marvel Rivals' core development team in China "remains fully committed to delivering an exceptional experience" and will continue to "invest more, not less, into the evolution and growth of its game."Level designer Garry McGee was caught up in the layoffs, providing insight into what the Seattle-based team contributed to the game on LinkedIn."My team recently helped develop and launch Marvel Rivals, which turned out to be a bigger hit than any of us expected," he wrote. "Unfortunately, my team was also laid off. Strange times all across the industry indeed."He added: "Working on the Marvel Rivals team was a fantastic experience where my team allowed me to support them in abilities beyond my direct role."Following its launch last December, Marvel Rivals experienced a successful opening weekend topping 10 million players in 72 hours.