• What's driving growth in the Chinese video game industry?

    The Chinese game industry has grown immensely in the past few years. Online free-to-play titles, such as Genshin Impact and Wuthering Waves, have millions of players around the world, while others like Etheria: Restart gear up for their full release. Companies have also marveled at the success of Black Myth: Wukong, which sold 10 million copies in under a week when it launched in August 2024, and subsequently honored as Game of the Year at the 2024 Steam Awards.Indeed, game studios in China are firing on all cylinders, with multiple offerings vying to become the next big global hit. This is further bolstered by rising incomes among consumers, high enthusiasm among developers, and robust support from regional governments. This raises the questions—what's driving growth in the region, and where is this emerging industry headed next?To learn more about the inner workings of the Chinese games industry, Game Developer spoke with several experts like China Independent Game Alliancefounder Simon Zhu, Li Shen, former Tencent Games China and Epic Games China chief technology officer, and Siyuan Xia, the co-founder of Chengdu-based Leenzee Technology and director of soulslike action-roleplaying game Wuchang: Fallen Feathers.Single-player game development is becoming sustainable in ChinaRelated:Chinese developers have historically been reluctant to work on single-player games. The challenges of premium single-player production are immense, and the popularity of free-to-play titles makes those kinds of games a better business prospect. Zhu gave us a brief history lesson on how free-to-play offerings became the norm for many decades. "If you recall, 1995 was a landmark year that saw the birth of The Legend of Sword and Fairy series," notes Zhu. The franchise, which combined elements of Chinese mythology and wuxia, was a huge hit for nearly a decade."Unfortunately, even with the series' popularity, piracy was so rampant back then that the single-player market could not truly flourish. It wasn't until the online game boom in the 2000s that China's video games market and history truly began—which was then dominated by free-to-play games. We had to wait until March 2015 when the PlayStation officially entered the Chinese market for single-player console games to be formally introduced to gamers. Even then, single-player games still occupied a small niche until Steam's emergence significantly expanded access."Studios and publishers also have to contend with the disparity in gauging the success of a single-player title compared to a free-to-play offering. "The fate of the former is often determined on launch day——while the latter has more room for recovery if issues arise on the first day," Xia tells us. It all boils down to how each team adapts, just as how the Wuchang team had adjusted to a new development cycle to make the overall rhythm and work process more manageable.Related:Image via Lenzee/505 Games.Experts are indeed well aware of the opportunities brought about by breakthrough titles opening doors to a wider audience, though these are uncharted waters for many studios in the country.Shenalso adds that Chinese players and developers have always had interest in single-player games, but it wasn't until Black Myth: Wukong sold millions of units globally that publishers became more willing to invest.Other single-player offerings, such as S-Game's Phantom Blade: Zero and Leenzee's Wuchang: Fallen Feathers, also hope to capitalize on Black Myth: Wukong's success. Wuchang, while set during the fall of the Ming Dynasty, even shows a glimpse into the culture and history of the Bronze Age Ancient Kingdom of Shu given that the studio is just an hour away from the archaeological site of Sanxingdui.Related:Wuchang and other games wear their cultural identity proudly on their sleeves, and Xia emphasizes its importance. "I believe Chinese games are gradually forming a distinctive identity in global markets. Cultural outreach isn't an overnight phenomenon but a long-term evolution fueled by collective efforts. For our part, we aspire to contribute foundational work through our endeavors.Shen echoes this sentiment as well. "Black Myth: Wukong was hailed as 'China's first AAA breakthrough' and I believe this instilled pride not just in the developers, but across the industry as well. Many view their work as challenging the Western-dominated games landscape and elevating Asian cultural representation. This collective mission drives innovation and a deeper exploration of local/regional narratives."That said, there's also a balancing act between highlighting cultural uniqueness and navigating geopolitical sensitivities, as Shen points out. "Look at Phantom Blade: Zero, for instance," says Shen. "It garnered nine million views on Bilibili, but it required rebranding for Western audiences."Challenges and opportunities in a fluctuating marketThe experts we spoke with agreed that Chinese game developers benefit from unique comparative advantages—and struggle with some disadvantages. "Chinese companies, owing to their experience in making online free-to-play games, are global frontrunners in commercial design and operations, excelling at creating monetization models, balancing numerical values, and guiding user behavior," says Zhu. "Sadly, game design and overall quality may fall short, particularly in narrative and script writing. The industry still suffers from limited experience in game design, insufficient market insight, and inadequate industry exchange."Shen agrees that China has achieved world-class capabilities, particularly when it comes to mobile game platforms and substantially profitable products in the domestic market. "Unfortunately, increasing production costs and market competition raise the barrier to entry for commercial games," says Shen. "This has made some developers grow increasingly conservative in genre selection, prioritizing production polish over innovative differentiation."Zhu also shares the stark differences between Western and Chinese industries, particularly when holding events and expos. "To give you an example: The Game Developers Conferencein the United States has long been established as a key platform for industry exchanges and B2B meetings. The event hosts approximately 1,000 sessions, with an access pass that costs around 10,000 RMB, yet it manages to draw attendees from across the globe, fostering an excellent environment for communication and networking.""In contrast, the events I organize in China offer tickets at about 500 RMB, which already includes a one-day access to the WePlay Expo. Despite this, we still face challenges in ticket sales and in engaging local speakers, some of whom are hesitant to share their expertise. I believe that this is due to the general public's understanding of the games industry and culture, especially since China's video game history and cultural integration only span around 20 years. The disparity with overseas markets is notable, but it also indicates substantial growth potential."Crunch culture, too, remains a controversial topic in China. "Long hours are common especially during project deadlines," says Shen. "Some studios adopt a 9-9-6 schedule–i.e. 9 a.m. to 9 p.m., six days a week. While labor reforms are underway, intense competition and a culture of 'dedication'tend to normalize overtime as well."Image via CIGA.While government guidelines do exist, enforcement remains inconsistent as it depends on each company or organization. "Our company, Leenzee, does not encourage overtime since we view that as inefficient and counterproductive," notes Xia. "In spite of this, some team members still voluntarily stay late. For them, Wuchang is the first Chinese-developed single-player game that they've worked on, and there's an emotional attachment to it.""In CIGA, we have consistently eschewed the practice of crunch or overtime, even going so far as to avoid rigid clock-in/clock-out times," explains Zhu. "The reality is that crunch, feeling compelled to stay until the boss leaves, or project pressures that lead to mandated overtime—these are all outdated formalities. They do not enhance inefficiency or quality. Instead, they only lead to increased stress and dissatisfaction among team members. Knowing how much the younger generation values work-life balance, I'm optimistic that outdated practices wane as the attitudes of newer generations continue to shift and the work environment evolves."In a period of growth for Chinese game development, one might think there were fewer layoffs going around. That's not true, says Zhu. "I'm based in Shanghai, the city that's at the forefront of the industry," he says. "In the last two years, numerous companies have experienced layoffs, including the termination of entire projects, teams, or subsidiaries. The approach differs from company to company, with some offering compensation to affected employees."Shen points out that unlike many other game development communities, China benefits from a strong social safety net reinforced by unemployment insurance and state-backed retraining programs. "Though specifics depend on regional policies," he clarified, noting it's not a perfect solution.Local governments are investing in game developmentRegional policies that often play a huge role in supporting game development in China. Most games that are set to be published in the country require a license from the National Press and Publication Administration, with key steps that include content reviewand technical compliance. However, each regional administrative district may have additional programs in place to aid companies and studios."The Sichuan Provincial Government has been highly supportive of our work," says Xia. "Since Wuchang: Fallen Feathers takes place in Chengdu and parts of Sichuan Province, the government even helped us locate more cultural heritage locations available for digital preservation through our scanning process.""Depending on the regional policies, the initiatives might include tax breaks for cultural projects or grants for technology/R&D," adds Shen. "Also, games recognized as key to 'digital cultural industries' have mandates to integrate traditional themes, and there might even be state-backed campaigns to export games globally as cultural ambassadors."Zhu, meanwhile, gestured to the 'tech park' we were in, one of several in the city that was built by Shanghai's administrative government. "This entire complex is home to several tech companies, both large conglomerates and startups, and most only pay a small expense for rent," says Zhu. Zhu also adds that local governments across the country have policies that help address game incubation, operations, local releases, and international distribution.There's no denying that China is the largest video games market in the world. While challenges, such as a lack of experience in making single-player games and a reluctance to risk on day-one launch revenue, do exist, experts remain hopeful. Developers, project leads, experts, and the government all contribute toward a collective effort to drive the expansion and global reach of the Chinese games industry."Rising incomes and increased demand for high-quality content will continue to drive growth," says Shen, arguing that there's a brighter future ahead.Zhu, meanwhile, remains steadfast in CIGA's support of the indie games community. "We know that the development of this sector in the country remains a long-term endeavor," notes Zhu. "Transformative change may not be achieved within a single lifetime, but this undertaking demands continued dedication and resilience.""We have a saying in China: 'When everybody adds fuel, the flames rise high'—it's the equivalent of saying that 'there is strength in numbers,'" posits Xia. "Our team hopes that, through our efforts, we can contribute further to the games industry, making it easier for future creators and allowing for more interesting works to emerge."
    #what039s #driving #growth #chinese #video
    What's driving growth in the Chinese video game industry?
    The Chinese game industry has grown immensely in the past few years. Online free-to-play titles, such as Genshin Impact and Wuthering Waves, have millions of players around the world, while others like Etheria: Restart gear up for their full release. Companies have also marveled at the success of Black Myth: Wukong, which sold 10 million copies in under a week when it launched in August 2024, and subsequently honored as Game of the Year at the 2024 Steam Awards.Indeed, game studios in China are firing on all cylinders, with multiple offerings vying to become the next big global hit. This is further bolstered by rising incomes among consumers, high enthusiasm among developers, and robust support from regional governments. This raises the questions—what's driving growth in the region, and where is this emerging industry headed next?To learn more about the inner workings of the Chinese games industry, Game Developer spoke with several experts like China Independent Game Alliancefounder Simon Zhu, Li Shen, former Tencent Games China and Epic Games China chief technology officer, and Siyuan Xia, the co-founder of Chengdu-based Leenzee Technology and director of soulslike action-roleplaying game Wuchang: Fallen Feathers.Single-player game development is becoming sustainable in ChinaRelated:Chinese developers have historically been reluctant to work on single-player games. The challenges of premium single-player production are immense, and the popularity of free-to-play titles makes those kinds of games a better business prospect. Zhu gave us a brief history lesson on how free-to-play offerings became the norm for many decades. "If you recall, 1995 was a landmark year that saw the birth of The Legend of Sword and Fairy series," notes Zhu. The franchise, which combined elements of Chinese mythology and wuxia, was a huge hit for nearly a decade."Unfortunately, even with the series' popularity, piracy was so rampant back then that the single-player market could not truly flourish. It wasn't until the online game boom in the 2000s that China's video games market and history truly began—which was then dominated by free-to-play games. We had to wait until March 2015 when the PlayStation officially entered the Chinese market for single-player console games to be formally introduced to gamers. Even then, single-player games still occupied a small niche until Steam's emergence significantly expanded access."Studios and publishers also have to contend with the disparity in gauging the success of a single-player title compared to a free-to-play offering. "The fate of the former is often determined on launch day——while the latter has more room for recovery if issues arise on the first day," Xia tells us. It all boils down to how each team adapts, just as how the Wuchang team had adjusted to a new development cycle to make the overall rhythm and work process more manageable.Related:Image via Lenzee/505 Games.Experts are indeed well aware of the opportunities brought about by breakthrough titles opening doors to a wider audience, though these are uncharted waters for many studios in the country.Shenalso adds that Chinese players and developers have always had interest in single-player games, but it wasn't until Black Myth: Wukong sold millions of units globally that publishers became more willing to invest.Other single-player offerings, such as S-Game's Phantom Blade: Zero and Leenzee's Wuchang: Fallen Feathers, also hope to capitalize on Black Myth: Wukong's success. Wuchang, while set during the fall of the Ming Dynasty, even shows a glimpse into the culture and history of the Bronze Age Ancient Kingdom of Shu given that the studio is just an hour away from the archaeological site of Sanxingdui.Related:Wuchang and other games wear their cultural identity proudly on their sleeves, and Xia emphasizes its importance. "I believe Chinese games are gradually forming a distinctive identity in global markets. Cultural outreach isn't an overnight phenomenon but a long-term evolution fueled by collective efforts. For our part, we aspire to contribute foundational work through our endeavors.Shen echoes this sentiment as well. "Black Myth: Wukong was hailed as 'China's first AAA breakthrough' and I believe this instilled pride not just in the developers, but across the industry as well. Many view their work as challenging the Western-dominated games landscape and elevating Asian cultural representation. This collective mission drives innovation and a deeper exploration of local/regional narratives."That said, there's also a balancing act between highlighting cultural uniqueness and navigating geopolitical sensitivities, as Shen points out. "Look at Phantom Blade: Zero, for instance," says Shen. "It garnered nine million views on Bilibili, but it required rebranding for Western audiences."Challenges and opportunities in a fluctuating marketThe experts we spoke with agreed that Chinese game developers benefit from unique comparative advantages—and struggle with some disadvantages. "Chinese companies, owing to their experience in making online free-to-play games, are global frontrunners in commercial design and operations, excelling at creating monetization models, balancing numerical values, and guiding user behavior," says Zhu. "Sadly, game design and overall quality may fall short, particularly in narrative and script writing. The industry still suffers from limited experience in game design, insufficient market insight, and inadequate industry exchange."Shen agrees that China has achieved world-class capabilities, particularly when it comes to mobile game platforms and substantially profitable products in the domestic market. "Unfortunately, increasing production costs and market competition raise the barrier to entry for commercial games," says Shen. "This has made some developers grow increasingly conservative in genre selection, prioritizing production polish over innovative differentiation."Zhu also shares the stark differences between Western and Chinese industries, particularly when holding events and expos. "To give you an example: The Game Developers Conferencein the United States has long been established as a key platform for industry exchanges and B2B meetings. The event hosts approximately 1,000 sessions, with an access pass that costs around 10,000 RMB, yet it manages to draw attendees from across the globe, fostering an excellent environment for communication and networking.""In contrast, the events I organize in China offer tickets at about 500 RMB, which already includes a one-day access to the WePlay Expo. Despite this, we still face challenges in ticket sales and in engaging local speakers, some of whom are hesitant to share their expertise. I believe that this is due to the general public's understanding of the games industry and culture, especially since China's video game history and cultural integration only span around 20 years. The disparity with overseas markets is notable, but it also indicates substantial growth potential."Crunch culture, too, remains a controversial topic in China. "Long hours are common especially during project deadlines," says Shen. "Some studios adopt a 9-9-6 schedule–i.e. 9 a.m. to 9 p.m., six days a week. While labor reforms are underway, intense competition and a culture of 'dedication'tend to normalize overtime as well."Image via CIGA.While government guidelines do exist, enforcement remains inconsistent as it depends on each company or organization. "Our company, Leenzee, does not encourage overtime since we view that as inefficient and counterproductive," notes Xia. "In spite of this, some team members still voluntarily stay late. For them, Wuchang is the first Chinese-developed single-player game that they've worked on, and there's an emotional attachment to it.""In CIGA, we have consistently eschewed the practice of crunch or overtime, even going so far as to avoid rigid clock-in/clock-out times," explains Zhu. "The reality is that crunch, feeling compelled to stay until the boss leaves, or project pressures that lead to mandated overtime—these are all outdated formalities. They do not enhance inefficiency or quality. Instead, they only lead to increased stress and dissatisfaction among team members. Knowing how much the younger generation values work-life balance, I'm optimistic that outdated practices wane as the attitudes of newer generations continue to shift and the work environment evolves."In a period of growth for Chinese game development, one might think there were fewer layoffs going around. That's not true, says Zhu. "I'm based in Shanghai, the city that's at the forefront of the industry," he says. "In the last two years, numerous companies have experienced layoffs, including the termination of entire projects, teams, or subsidiaries. The approach differs from company to company, with some offering compensation to affected employees."Shen points out that unlike many other game development communities, China benefits from a strong social safety net reinforced by unemployment insurance and state-backed retraining programs. "Though specifics depend on regional policies," he clarified, noting it's not a perfect solution.Local governments are investing in game developmentRegional policies that often play a huge role in supporting game development in China. Most games that are set to be published in the country require a license from the National Press and Publication Administration, with key steps that include content reviewand technical compliance. However, each regional administrative district may have additional programs in place to aid companies and studios."The Sichuan Provincial Government has been highly supportive of our work," says Xia. "Since Wuchang: Fallen Feathers takes place in Chengdu and parts of Sichuan Province, the government even helped us locate more cultural heritage locations available for digital preservation through our scanning process.""Depending on the regional policies, the initiatives might include tax breaks for cultural projects or grants for technology/R&D," adds Shen. "Also, games recognized as key to 'digital cultural industries' have mandates to integrate traditional themes, and there might even be state-backed campaigns to export games globally as cultural ambassadors."Zhu, meanwhile, gestured to the 'tech park' we were in, one of several in the city that was built by Shanghai's administrative government. "This entire complex is home to several tech companies, both large conglomerates and startups, and most only pay a small expense for rent," says Zhu. Zhu also adds that local governments across the country have policies that help address game incubation, operations, local releases, and international distribution.There's no denying that China is the largest video games market in the world. While challenges, such as a lack of experience in making single-player games and a reluctance to risk on day-one launch revenue, do exist, experts remain hopeful. Developers, project leads, experts, and the government all contribute toward a collective effort to drive the expansion and global reach of the Chinese games industry."Rising incomes and increased demand for high-quality content will continue to drive growth," says Shen, arguing that there's a brighter future ahead.Zhu, meanwhile, remains steadfast in CIGA's support of the indie games community. "We know that the development of this sector in the country remains a long-term endeavor," notes Zhu. "Transformative change may not be achieved within a single lifetime, but this undertaking demands continued dedication and resilience.""We have a saying in China: 'When everybody adds fuel, the flames rise high'—it's the equivalent of saying that 'there is strength in numbers,'" posits Xia. "Our team hopes that, through our efforts, we can contribute further to the games industry, making it easier for future creators and allowing for more interesting works to emerge." #what039s #driving #growth #chinese #video
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    What's driving growth in the Chinese video game industry?
    The Chinese game industry has grown immensely in the past few years. Online free-to-play titles, such as Genshin Impact and Wuthering Waves, have millions of players around the world, while others like Etheria: Restart gear up for their full release. Companies have also marveled at the success of Black Myth: Wukong, which sold 10 million copies in under a week when it launched in August 2024, and subsequently honored as Game of the Year at the 2024 Steam Awards.Indeed, game studios in China are firing on all cylinders, with multiple offerings vying to become the next big global hit. This is further bolstered by rising incomes among consumers, high enthusiasm among developers, and robust support from regional governments. This raises the questions—what's driving growth in the region, and where is this emerging industry headed next?To learn more about the inner workings of the Chinese games industry, Game Developer spoke with several experts like China Independent Game Alliance (CIGA) founder Simon Zhu, Li Shen, former Tencent Games China and Epic Games China chief technology officer, and Siyuan Xia, the co-founder of Chengdu-based Leenzee Technology and director of soulslike action-roleplaying game Wuchang: Fallen Feathers.Single-player game development is becoming sustainable in ChinaRelated:Chinese developers have historically been reluctant to work on single-player games. The challenges of premium single-player production are immense, and the popularity of free-to-play titles makes those kinds of games a better business prospect. Zhu gave us a brief history lesson on how free-to-play offerings became the norm for many decades. "If you recall, 1995 was a landmark year that saw the birth of The Legend of Sword and Fairy series," notes Zhu. The franchise, which combined elements of Chinese mythology and wuxia (Chinese martial arts), was a huge hit for nearly a decade."Unfortunately, even with the series' popularity, piracy was so rampant back then that the single-player market could not truly flourish. It wasn't until the online game boom in the 2000s that China's video games market and history truly began—which was then dominated by free-to-play games. We had to wait until March 2015 when the PlayStation officially entered the Chinese market for single-player console games to be formally introduced to gamers. Even then, single-player games still occupied a small niche until Steam's emergence significantly expanded access."Studios and publishers also have to contend with the disparity in gauging the success of a single-player title compared to a free-to-play offering. "The fate of the former is often determined on launch day—(making those projects riskier ventures)—while the latter has more room for recovery if issues arise on the first day," Xia tells us. It all boils down to how each team adapts, just as how the Wuchang team had adjusted to a new development cycle to make the overall rhythm and work process more manageable.Related:Image via Lenzee/505 Games.Experts are indeed well aware of the opportunities brought about by breakthrough titles opening doors to a wider audience, though these are uncharted waters for many studios in the country.Shen (who now heads his own investment company, Re³ Lab) also adds that Chinese players and developers have always had interest in single-player games, but it wasn't until Black Myth: Wukong sold millions of units globally that publishers became more willing to invest.Other single-player offerings, such as S-Game's Phantom Blade: Zero and Leenzee's Wuchang: Fallen Feathers, also hope to capitalize on Black Myth: Wukong's success. Wuchang, while set during the fall of the Ming Dynasty, even shows a glimpse into the culture and history of the Bronze Age Ancient Kingdom of Shu given that the studio is just an hour away from the archaeological site of Sanxingdui.Related:Wuchang and other games wear their cultural identity proudly on their sleeves, and Xia emphasizes its importance. "I believe Chinese games are gradually forming a distinctive identity in global markets. Cultural outreach isn't an overnight phenomenon but a long-term evolution fueled by collective efforts. For our part, we aspire to contribute foundational work through our endeavors.Shen echoes this sentiment as well. "Black Myth: Wukong was hailed as 'China's first AAA breakthrough' and I believe this instilled pride not just in the developers, but across the industry as well. Many view their work as challenging the Western-dominated games landscape and elevating Asian cultural representation. This collective mission drives innovation and a deeper exploration of local/regional narratives."That said, there's also a balancing act between highlighting cultural uniqueness and navigating geopolitical sensitivities, as Shen points out. "Look at Phantom Blade: Zero, for instance," says Shen. "It garnered nine million views on Bilibili (essentially China's own version of YouTube), but it required rebranding for Western audiences."Challenges and opportunities in a fluctuating marketThe experts we spoke with agreed that Chinese game developers benefit from unique comparative advantages—and struggle with some disadvantages. "Chinese companies, owing to their experience in making online free-to-play games, are global frontrunners in commercial design and operations, excelling at creating monetization models, balancing numerical values, and guiding user behavior," says Zhu. "Sadly, game design and overall quality may fall short, particularly in narrative and script writing. The industry still suffers from limited experience in game design, insufficient market insight, and inadequate industry exchange."Shen agrees that China has achieved world-class capabilities, particularly when it comes to mobile game platforms and substantially profitable products in the domestic market. "Unfortunately, increasing production costs and market competition raise the barrier to entry for commercial games," says Shen. "This has made some developers grow increasingly conservative in genre selection, prioritizing production polish over innovative differentiation."Zhu also shares the stark differences between Western and Chinese industries, particularly when holding events and expos. "To give you an example: The Game Developers Conference (GDC) in the United States has long been established as a key platform for industry exchanges and B2B meetings. The event hosts approximately 1,000 sessions, with an access pass that costs around 10,000 RMB (approximately $1,350), yet it manages to draw attendees from across the globe, fostering an excellent environment for communication and networking.""In contrast, the events I organize in China offer tickets at about 500 RMB (approximately 70 USD), which already includes a one-day access to the WePlay Expo. Despite this, we still face challenges in ticket sales and in engaging local speakers, some of whom are hesitant to share their expertise. I believe that this is due to the general public's understanding of the games industry and culture, especially since China's video game history and cultural integration only span around 20 years. The disparity with overseas markets is notable, but it also indicates substantial growth potential."Crunch culture, too, remains a controversial topic in China. "Long hours are common especially during project deadlines," says Shen. "Some studios adopt a 9-9-6 schedule–i.e. 9 a.m. to 9 p.m., six days a week. While labor reforms are underway, intense competition and a culture of 'dedication' [to your work] tend to normalize overtime as well."Image via CIGA.While government guidelines do exist, enforcement remains inconsistent as it depends on each company or organization. "Our company, Leenzee, does not encourage overtime since we view that as inefficient and counterproductive," notes Xia. "In spite of this, some team members still voluntarily stay late. For them, Wuchang is the first Chinese-developed single-player game that they've worked on, and there's an emotional attachment to it.""In CIGA, we have consistently eschewed the practice of crunch or overtime, even going so far as to avoid rigid clock-in/clock-out times," explains Zhu. "The reality is that crunch, feeling compelled to stay until the boss leaves, or project pressures that lead to mandated overtime—these are all outdated formalities. They do not enhance inefficiency or quality. Instead, they only lead to increased stress and dissatisfaction among team members. Knowing how much the younger generation values work-life balance, I'm optimistic that outdated practices wane as the attitudes of newer generations continue to shift and the work environment evolves."In a period of growth for Chinese game development, one might think there were fewer layoffs going around. That's not true, says Zhu. "I'm based in Shanghai, the city that's at the forefront of the industry," he says. "In the last two years, numerous companies have experienced layoffs, including the termination of entire projects, teams, or subsidiaries. The approach differs from company to company, with some offering compensation to affected employees."Shen points out that unlike many other game development communities, China benefits from a strong social safety net reinforced by unemployment insurance and state-backed retraining programs. "Though specifics depend on regional policies," he clarified, noting it's not a perfect solution.Local governments are investing in game developmentRegional policies that often play a huge role in supporting game development in China. Most games that are set to be published in the country require a license from the National Press and Publication Administration (NPPA), with key steps that include content review (i.e. cultural sensitivity or historical accuracy) and technical compliance. However, each regional administrative district may have additional programs in place to aid companies and studios."The Sichuan Provincial Government has been highly supportive of our work," says Xia. "Since Wuchang: Fallen Feathers takes place in Chengdu and parts of Sichuan Province, the government even helped us locate more cultural heritage locations available for digital preservation through our scanning process.""Depending on the regional policies, the initiatives might include tax breaks for cultural projects or grants for technology/R&D," adds Shen. "Also, games recognized as key to 'digital cultural industries' have mandates to integrate traditional themes, and there might even be state-backed campaigns to export games globally as cultural ambassadors."Zhu, meanwhile, gestured to the 'tech park' we were in, one of several in the city that was built by Shanghai's administrative government. "This entire complex is home to several tech companies, both large conglomerates and startups, and most only pay a small expense for rent," says Zhu. Zhu also adds that local governments across the country have policies that help address game incubation, operations, local releases, and international distribution.There's no denying that China is the largest video games market in the world. While challenges, such as a lack of experience in making single-player games and a reluctance to risk on day-one launch revenue, do exist, experts remain hopeful. Developers, project leads, experts, and the government all contribute toward a collective effort to drive the expansion and global reach of the Chinese games industry."Rising incomes and increased demand for high-quality content will continue to drive growth," says Shen, arguing that there's a brighter future ahead.Zhu, meanwhile, remains steadfast in CIGA's support of the indie games community. "We know that the development of this sector in the country remains a long-term endeavor," notes Zhu. "Transformative change may not be achieved within a single lifetime, but this undertaking demands continued dedication and resilience.""We have a saying in China: 'When everybody adds fuel, the flames rise high'—it's the equivalent of saying that 'there is strength in numbers,'" posits Xia. "Our team hopes that, through our efforts, we can contribute further to the games industry, making it easier for future creators and allowing for more interesting works to emerge."
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  • #333;">Why one obscure app could help crumble Meta’s empire
    If the question, “Who is Meta’s biggest rival?” were on a Family Feud survey, TikTok would likely be the winning answer.
    In the Federal Trade Commission’s antitrust case against the Facebook and Instagram owner, the government’s response probably wouldn’t even make the top 10: a small blockchain-based platform called MeWe.
    MeWe looks a fair amount like Facebook at first glance, except that you make an account using the Frequency blockchain — which the company explains is a decentralized protocol that lets you move your social connections to other (mostly hypothetical at this point) apps that support Frequency.
    The company says 20 million users have joined, but when I make a MeWe account and log in, I scroll through my autopopulated feed and think, “Who are these people?” I search for a few of my Verge colleagues, figuring if anyone has tried this obscure app, it might be one of them, but I come up short.
    I try some public figures: Tim Cook? Jeff Bezos? Mark Zuckerberg? There are some accounts with these names, but it seems unlikely they’re the ones I have in mind.The claim that MeWe is a closer competitor to Facebook and Instagram than TikTok might be baffling if you’re not steeped in antitrust law or the specifics of the FTC’s complaint.
    Meta CEO Zuckerberg testified he hadn’t even heard of the app before this case was filed.
    But the FTC has spent the past three weeks laying out its logic.
    Using Meta’s own internal discussions about how it views itself and its competition, it says that Meta has historically, and to this day, competed in a market for connecting with friends and family online — and when it saw its dominance in that space threatened by the rise of Instagram and WhatsApp, it bought them to squash the competition.Whether Judge James Boasberg buys this could determine who wins the case — if the FTC can also show that Meta acted illegally through its acquisitions of Instagram and WhatsApp to solidify its alleged monopoly power.Antitrust law is supposed to ensure fair competition, which usually means that people have options for a useful class of goods and services — what’s known as a relevant market.
    The FTC says that here, that market is “personal social networking services,” or PSNs: spaces where a core purpose is helping people connect with friends and family.
    While there are many online platforms that overlap with Meta’s services, the FTC argues that virtually none of them serve that market.
    If internet users want to find and hang out with people they know — as opposed to, say, watching influencers or making work connections — then it’s Mark Zuckerberg’s way or… in the government’s telling, Snapchat, BeReal, and MeWe.
    Beyond that core definition, PSNs have some other unique features and norms: The apps feature a social graph of users’ friends and family connections, as opposed to mapping users primarily based on their interests.
    Users can look up and find people they know in real life.
    And they come to the app to share personal updates with those people.Facebook and Instagram increasingly display videos and photos from influencers and celebrities, but the FTC argues personal social networking remains a core service.
    It used Instagram chief Adam Mosseri’s testimony to most clearly make this point.
    In that testimony as well as posts to his own Instagram account, Mosseri said that it’s still important for the app to connect users with their friends.
    The FTC argues that even if that use case is a smaller portion of what Meta’s apps do these days, it’s still a significant need users have that can virtually only be fulfilled by Facebook and Instagram.
    While someone might connect with people they know in real life on LinkedIn, they likely won’t primarily share personal updates there.
    And while they also could follow and interact with people they know on TikTok or YouTube, they’re more likely to passively watch videos from people they don’t.Meta says this is an entirely wrong way to think about it.
    Social media platforms compete for users’ time and attention, so whether a particular app is squarely aimed at so-called friends and family sharing is beside the point.
    Facebook and Instagram have evolved to show more content from people like influencers, shifting further from the use case the FTC says Meta has illegally dominated.
    The company has already landed some important points that could help its case, and it will get more time to push back on the agency’s framing when it calls its own witnesses in the coming weeks.But as the FTC’s case-in-chief continues into its fifth week, its argument for Meta’s dominance is becoming a lot clearer.Why do people use Facebook?When defining a market, each side is trying to answer a key question: why are people choosing one particular company’s product? A lot of goods and services compete with each other in some sense, but this doesn’t mean they serve the same niche.
    In the case of sodas, for example, “you could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi,” says George Washington Law professor and former FTC Chair Bill Kovacic.
    In the tech world, Netflix has claimed its biggest competitors are Fortnite and sleep — but those comparisons probably wouldn’t stand up in court.The FTC says that outside of Facebook and Instagram, only apps like Snapchat and MeWe can fulfill a users’ desire to broadcast personal updates with friends and family online.
    To make its case, it brought in a string of executives from other social media companies to explain why their apps can’t quite scratch the same itch for users.
    Strava’s former VP of connected partnerships Mateo Ortega testified that sure, users of the fitness-tracking social media app could share baby photos on the platform, but they probably wouldn’t unless it was in a running stroller.
    “It’s all about fitness, and while you can post other stuff, it just doesn’t seem as relevant,” he said.
    “You could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi”Pinterest’s former head of user growth Julia Roberts testified that users who come to Pinterest “expecting it to be like other social media apps … tend to be confused about how to use the product.” That’s because the app is so much not about connecting with other people that it works much differently from other social media platforms.
    Pinterest is more about finding things users are interested in, she said, so “following is not a big part of the Pinterest experience.”TikTok has a tab where users can watch videos from their friends — identified as people who mutually follow each other.
    But head of operations Adam Presser testified only about 1 percent of videos watched on the platform are there.
    The company doesn’t think of itself as competing with Meta’s apps for personal social networking, he testified.
    And even though side-by-side screenshots of TikTok, Instagram Reels, and YouTube Shorts look identical, Presser said, “when you click out of this view for these other platforms, you would get to essentially what I think of as their core business,” which for Instagram, includes a feed and stories that often contain at least some content from family and friends.At times, Meta’s cross-examination of rival company executives showed the limits of apps’ similarities.
    When questioning Apple director of product marketing Ronak Shah, Meta sought to show that group chats in Apple’s messaging feature could serve as a social media feed for friends and family sharing.
    But Shah testified that feed would be limited to 32 people at most, and users can’t just look up each others’ profiles like they would on social platforms.
    Still, Meta pointed out, Apple’s messages app is listed under social media on its own app store.However, Meta also made important arguments about why the judge should question the FTC’s framing.
    It pointed out that some documents from TikTok and YouTube owner Google claiming their products are very different from Meta’s were submitted to foreign officials to try to avoid getting drafted into potentially frustrating regulations.
    It also pointed out when TikTok briefly went dark in the US ahead of a (now-aborted) ban, users flocked to Meta apps, showing consumers see it as a substitute on at least some level.
    That’s because, Meta argued, competition for users is really about winning their time and attention.Companies can “sometimes make mistakes.
    They misjudge who their users are”But X VP of product Keith Coleman testified it’s not that useful to think about competition this way.
    Instead, “it’s much more helpful to understand what people are trying to accomplish in their lives and to try to help them accomplish that.” Under former CEO Jack Dorsey, then-Twitter leaned into focusing on news and users’ interests, Coleman testified, because that’s why people were coming to the platform.
    Coleman was later surprised at how his own website characterized the product in its help center as a “service for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages.” “I can’t believe that’s on the website,” he said.
    “That’s pretty wacky.”This point was “a caution that not everything a company writes down or says is necessarily decisive in establishing what the boundary of a market is,” Kovacic said.
    Companies can “sometimes make mistakes.
    They misjudge who their users are.”There are real ramifications for internet users here.
    Going back to Netflix’s comparisons, if the streaming video service went down, some people would probably be happy to play a video game or get a few hours of shut-eye instead.
    But others would be frustrated that they couldn’t watch a movie, which is why it’s good that Hulu, HBO, and Amazon Prime Video also exist.
    The FTC’s argument isn’t that Meta owns the only social apps on the internet, it’s that the company faces little competition for a service many people specifically want — so the fact that you probably don’t know anyone using MeWe is sort of the point.How will the judge decide?Ultimately, Boasberg’s market definition — whether it’s Meta’s, the FTC’s, or his own — will come down to a few things: how Meta views itself, how competitors see it, and his own intuition, says Kovacic.
    ”Notice how much the FTC has been questioning Meta witnesses on the basis of its own internal documents,” he says.
    “Does the story in the courtroom match the story of your own internal documents?” So far, the documents have shown that Meta has clocked that at least some portion of users come to its products to connect with family and friends, but also that the rise of TikTok has had it looking over its shoulder.
    In September 2020, Meta told its board that Instagram revenue would be “meaningfully lower” than planned in the second half of the fiscal year because TikTok was drawing users’ attention.
    But other internal documents have shown Meta’s well aware that at different points in time, users have come to its apps to connect with family and friends, and worriedly took note of other apps entering that space.
    In a 2018 presentation, Meta found that the highest percentage of surveyed users said they come to Facebook, Instagram, and Snap to “see daily casual moments” and “see special moments.” By contrast, users came to Twitter’s feed for news and YouTube’s for entertainment.
    And even as Instagram expands into entertainment, the FTC notes that it still advertises its sign-up page as a place to “see photos and videos from your friends.”“Instagram will always need to focus on friends”In a 2018 email, Zuckerberg told Mosseri that “Instagram will always need to focus on friends.” And even though a lot has changed in the social media landscape since then, Mosseri testified that to this day on the app, “friends are an important part of the experience.” Even though users may share fewer of their own updates on Facebook and Instagram, Mosseri admitted that two friends talking in the comments of a public figure’s post counts as an interaction between friends — and one that Instagram actively tries to facilitate.Meta has argued that this special focus on friends and family sharing makes up a shrinking portion of its offerings as it works to compete with fierce rivals like TikTok.
    But the FTC says it’s still significant enough to monopolize.
    It’s a scenario that came up in another major tech monopolization case, Kovacic says: the late-1990s lawsuit US v.
    Microsoft.
    In that case, Microsoft argued the Justice Department was ignoring how computing would soon move beyond the personal computer to the Internet of Things, meaning it couldn’t truly lock up the computing ecosystem as much as the government alleged.“Judge Jackson in the Microsoft case said, yeah, those things are happening, but not happening fast enough to deny you real market power in this PC and laptop-based market that the Justice Department is emphasizing,” Kovacic says.Still, he adds, a market niche can at some point become so small that it’s no longer significant in the eyes of antitrust law.
    “You can have a process of change that ultimately renders the market segment unimportant,” he says.
    “And the hard task of analysis for the judge is to say, has it already happened?”See More:
    #666;">المصدر: https://www.theverge.com/antitrust/665308/meta-ftc-antitrust-trial-market-definition-tiktok-mewe-snap" style="color: #0066cc; text-decoration: none;">www.theverge.com
    #0066cc;">#why #one #obscure #app #could #help #crumble #metas #empire #the #question #who #biggest #rival #were #family #feud #survey #tiktok #would #likely #winning #answerin #federal #trade #commissions #antitrust #case #against #facebook #and #instagram #owner #governments #response #probably #wouldnt #even #make #top #small #blockchainbased #platform #called #mewemewe #looks #fair #amount #like #first #glance #except #that #you #account #using #frequency #blockchain #which #company #explains #decentralized #protocol #lets #move #your #social #connections #other #mostly #hypothetical #this #point #apps #support #frequencythe #says #million #users #have #joined #but #when #mewe #log #scroll #through #autopopulated #feed #think #are #these #people #search #for #few #verge #colleagues #figuring #anyone #has #tried #might #them #come #shorti #try #some #public #figures #tim #cook #jeff #bezos #mark #zuckerberg #there #accounts #with #names #seems #unlikely #theyre #ones #mindthe 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#caution #everything #writes #down #necessarily #decisive #establishing #boundary #kovacic #saidcompanies #arethere #ramifications #heregoing #netflixs #streaming #video #happy #play #game #hours #shuteye #insteadbut #frustrated #couldnt #movie #good #hulu #hbo #amazon #prime #existthe #isnt #owns #faces #little #specifically #fact #dont #sort #pointhow #decideultimately #boasbergs #intuition #kovacicnotice #been #basis #saysdoes #story #courtroom #match #far #shown #clocked #had #looking #over #shoulderin #september #told #board #revenue #meaningfully #lower #planned #second #half #fiscal #year #drawing #attentionbut #aware #worriedly #took #note #entering #spacein #presentation #found #highest #percentage #surveyed #snap #daily #casual #moments #special #contrast #came #twitters #youtubes #entertainmentand #expands #entertainment #notes #advertises #signup #page #place #friendsinstagram #always #focus #friendsin #email #changed #landscape #since #experience #may #fewer #admitted #two #talking #comments #counts #interaction #between #actively #tries #facilitatemeta #makes #shrinking #offerings #fierce #rivals #tiktokbut #enough #monopolizeits #scenario #another #major #monopolization #late1990s #lawsuit #vmicrosoftin #microsoft #justice #department #ignoring #computing #soon #beyond #computer #meaning #truly #lock #ecosystem #government #allegedjudge #jackson #yeah #happening #fast #deny #power #laptopbased #emphasizing #saysstill #adds #niche #become #longer #eyes #lawyou #process #change #ultimately #renders #segment #unimportant #saysand #hard #task #analysis #happenedsee
    Why one obscure app could help crumble Meta’s empire
    If the question, “Who is Meta’s biggest rival?” were on a Family Feud survey, TikTok would likely be the winning answer. In the Federal Trade Commission’s antitrust case against the Facebook and Instagram owner, the government’s response probably wouldn’t even make the top 10: a small blockchain-based platform called MeWe. MeWe looks a fair amount like Facebook at first glance, except that you make an account using the Frequency blockchain — which the company explains is a decentralized protocol that lets you move your social connections to other (mostly hypothetical at this point) apps that support Frequency. The company says 20 million users have joined, but when I make a MeWe account and log in, I scroll through my autopopulated feed and think, “Who are these people?” I search for a few of my Verge colleagues, figuring if anyone has tried this obscure app, it might be one of them, but I come up short. I try some public figures: Tim Cook? Jeff Bezos? Mark Zuckerberg? There are some accounts with these names, but it seems unlikely they’re the ones I have in mind.The claim that MeWe is a closer competitor to Facebook and Instagram than TikTok might be baffling if you’re not steeped in antitrust law or the specifics of the FTC’s complaint. Meta CEO Zuckerberg testified he hadn’t even heard of the app before this case was filed. But the FTC has spent the past three weeks laying out its logic. Using Meta’s own internal discussions about how it views itself and its competition, it says that Meta has historically, and to this day, competed in a market for connecting with friends and family online — and when it saw its dominance in that space threatened by the rise of Instagram and WhatsApp, it bought them to squash the competition.Whether Judge James Boasberg buys this could determine who wins the case — if the FTC can also show that Meta acted illegally through its acquisitions of Instagram and WhatsApp to solidify its alleged monopoly power.Antitrust law is supposed to ensure fair competition, which usually means that people have options for a useful class of goods and services — what’s known as a relevant market. The FTC says that here, that market is “personal social networking services,” or PSNs: spaces where a core purpose is helping people connect with friends and family. While there are many online platforms that overlap with Meta’s services, the FTC argues that virtually none of them serve that market. If internet users want to find and hang out with people they know — as opposed to, say, watching influencers or making work connections — then it’s Mark Zuckerberg’s way or… in the government’s telling, Snapchat, BeReal, and MeWe. Beyond that core definition, PSNs have some other unique features and norms: The apps feature a social graph of users’ friends and family connections, as opposed to mapping users primarily based on their interests. Users can look up and find people they know in real life. And they come to the app to share personal updates with those people.Facebook and Instagram increasingly display videos and photos from influencers and celebrities, but the FTC argues personal social networking remains a core service. It used Instagram chief Adam Mosseri’s testimony to most clearly make this point. In that testimony as well as posts to his own Instagram account, Mosseri said that it’s still important for the app to connect users with their friends. The FTC argues that even if that use case is a smaller portion of what Meta’s apps do these days, it’s still a significant need users have that can virtually only be fulfilled by Facebook and Instagram. While someone might connect with people they know in real life on LinkedIn, they likely won’t primarily share personal updates there. And while they also could follow and interact with people they know on TikTok or YouTube, they’re more likely to passively watch videos from people they don’t.Meta says this is an entirely wrong way to think about it. Social media platforms compete for users’ time and attention, so whether a particular app is squarely aimed at so-called friends and family sharing is beside the point. Facebook and Instagram have evolved to show more content from people like influencers, shifting further from the use case the FTC says Meta has illegally dominated. The company has already landed some important points that could help its case, and it will get more time to push back on the agency’s framing when it calls its own witnesses in the coming weeks.But as the FTC’s case-in-chief continues into its fifth week, its argument for Meta’s dominance is becoming a lot clearer.Why do people use Facebook?When defining a market, each side is trying to answer a key question: why are people choosing one particular company’s product? A lot of goods and services compete with each other in some sense, but this doesn’t mean they serve the same niche. In the case of sodas, for example, “you could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi,” says George Washington Law professor and former FTC Chair Bill Kovacic. In the tech world, Netflix has claimed its biggest competitors are Fortnite and sleep — but those comparisons probably wouldn’t stand up in court.The FTC says that outside of Facebook and Instagram, only apps like Snapchat and MeWe can fulfill a users’ desire to broadcast personal updates with friends and family online. To make its case, it brought in a string of executives from other social media companies to explain why their apps can’t quite scratch the same itch for users. Strava’s former VP of connected partnerships Mateo Ortega testified that sure, users of the fitness-tracking social media app could share baby photos on the platform, but they probably wouldn’t unless it was in a running stroller. “It’s all about fitness, and while you can post other stuff, it just doesn’t seem as relevant,” he said. “You could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi”Pinterest’s former head of user growth Julia Roberts testified that users who come to Pinterest “expecting it to be like other social media apps … tend to be confused about how to use the product.” That’s because the app is so much not about connecting with other people that it works much differently from other social media platforms. Pinterest is more about finding things users are interested in, she said, so “following is not a big part of the Pinterest experience.”TikTok has a tab where users can watch videos from their friends — identified as people who mutually follow each other. But head of operations Adam Presser testified only about 1 percent of videos watched on the platform are there. The company doesn’t think of itself as competing with Meta’s apps for personal social networking, he testified. And even though side-by-side screenshots of TikTok, Instagram Reels, and YouTube Shorts look identical, Presser said, “when you click out of this view for these other platforms, you would get to essentially what I think of as their core business,” which for Instagram, includes a feed and stories that often contain at least some content from family and friends.At times, Meta’s cross-examination of rival company executives showed the limits of apps’ similarities. When questioning Apple director of product marketing Ronak Shah, Meta sought to show that group chats in Apple’s messaging feature could serve as a social media feed for friends and family sharing. But Shah testified that feed would be limited to 32 people at most, and users can’t just look up each others’ profiles like they would on social platforms. Still, Meta pointed out, Apple’s messages app is listed under social media on its own app store.However, Meta also made important arguments about why the judge should question the FTC’s framing. It pointed out that some documents from TikTok and YouTube owner Google claiming their products are very different from Meta’s were submitted to foreign officials to try to avoid getting drafted into potentially frustrating regulations. It also pointed out when TikTok briefly went dark in the US ahead of a (now-aborted) ban, users flocked to Meta apps, showing consumers see it as a substitute on at least some level. That’s because, Meta argued, competition for users is really about winning their time and attention.Companies can “sometimes make mistakes. They misjudge who their users are”But X VP of product Keith Coleman testified it’s not that useful to think about competition this way. Instead, “it’s much more helpful to understand what people are trying to accomplish in their lives and to try to help them accomplish that.” Under former CEO Jack Dorsey, then-Twitter leaned into focusing on news and users’ interests, Coleman testified, because that’s why people were coming to the platform. Coleman was later surprised at how his own website characterized the product in its help center as a “service for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages.” “I can’t believe that’s on the website,” he said. “That’s pretty wacky.”This point was “a caution that not everything a company writes down or says is necessarily decisive in establishing what the boundary of a market is,” Kovacic said. Companies can “sometimes make mistakes. They misjudge who their users are.”There are real ramifications for internet users here. Going back to Netflix’s comparisons, if the streaming video service went down, some people would probably be happy to play a video game or get a few hours of shut-eye instead. But others would be frustrated that they couldn’t watch a movie, which is why it’s good that Hulu, HBO, and Amazon Prime Video also exist. The FTC’s argument isn’t that Meta owns the only social apps on the internet, it’s that the company faces little competition for a service many people specifically want — so the fact that you probably don’t know anyone using MeWe is sort of the point.How will the judge decide?Ultimately, Boasberg’s market definition — whether it’s Meta’s, the FTC’s, or his own — will come down to a few things: how Meta views itself, how competitors see it, and his own intuition, says Kovacic. ”Notice how much the FTC has been questioning Meta witnesses on the basis of its own internal documents,” he says. “Does the story in the courtroom match the story of your own internal documents?” So far, the documents have shown that Meta has clocked that at least some portion of users come to its products to connect with family and friends, but also that the rise of TikTok has had it looking over its shoulder. In September 2020, Meta told its board that Instagram revenue would be “meaningfully lower” than planned in the second half of the fiscal year because TikTok was drawing users’ attention. But other internal documents have shown Meta’s well aware that at different points in time, users have come to its apps to connect with family and friends, and worriedly took note of other apps entering that space. In a 2018 presentation, Meta found that the highest percentage of surveyed users said they come to Facebook, Instagram, and Snap to “see daily casual moments” and “see special moments.” By contrast, users came to Twitter’s feed for news and YouTube’s for entertainment. And even as Instagram expands into entertainment, the FTC notes that it still advertises its sign-up page as a place to “see photos and videos from your friends.”“Instagram will always need to focus on friends”In a 2018 email, Zuckerberg told Mosseri that “Instagram will always need to focus on friends.” And even though a lot has changed in the social media landscape since then, Mosseri testified that to this day on the app, “friends are an important part of the experience.” Even though users may share fewer of their own updates on Facebook and Instagram, Mosseri admitted that two friends talking in the comments of a public figure’s post counts as an interaction between friends — and one that Instagram actively tries to facilitate.Meta has argued that this special focus on friends and family sharing makes up a shrinking portion of its offerings as it works to compete with fierce rivals like TikTok. But the FTC says it’s still significant enough to monopolize. It’s a scenario that came up in another major tech monopolization case, Kovacic says: the late-1990s lawsuit US v. Microsoft. In that case, Microsoft argued the Justice Department was ignoring how computing would soon move beyond the personal computer to the Internet of Things, meaning it couldn’t truly lock up the computing ecosystem as much as the government alleged.“Judge Jackson in the Microsoft case said, yeah, those things are happening, but not happening fast enough to deny you real market power in this PC and laptop-based market that the Justice Department is emphasizing,” Kovacic says.Still, he adds, a market niche can at some point become so small that it’s no longer significant in the eyes of antitrust law. “You can have a process of change that ultimately renders the market segment unimportant,” he says. “And the hard task of analysis for the judge is to say, has it already happened?”See More:
    المصدر: www.theverge.com
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    WWW.THEVERGE.COM
    Why one obscure app could help crumble Meta’s empire
    If the question, “Who is Meta’s biggest rival?” were on a Family Feud survey, TikTok would likely be the winning answer. In the Federal Trade Commission’s antitrust case against the Facebook and Instagram owner, the government’s response probably wouldn’t even make the top 10: a small blockchain-based platform called MeWe. MeWe looks a fair amount like Facebook at first glance, except that you make an account using the Frequency blockchain — which the company explains is a decentralized protocol that lets you move your social connections to other (mostly hypothetical at this point) apps that support Frequency. The company says 20 million users have joined, but when I make a MeWe account and log in, I scroll through my autopopulated feed and think, “Who are these people?” I search for a few of my Verge colleagues, figuring if anyone has tried this obscure app, it might be one of them, but I come up short. I try some public figures: Tim Cook? Jeff Bezos? Mark Zuckerberg? There are some accounts with these names, but it seems unlikely they’re the ones I have in mind.The claim that MeWe is a closer competitor to Facebook and Instagram than TikTok might be baffling if you’re not steeped in antitrust law or the specifics of the FTC’s complaint. Meta CEO Zuckerberg testified he hadn’t even heard of the app before this case was filed. But the FTC has spent the past three weeks laying out its logic. Using Meta’s own internal discussions about how it views itself and its competition, it says that Meta has historically, and to this day, competed in a market for connecting with friends and family online — and when it saw its dominance in that space threatened by the rise of Instagram and WhatsApp, it bought them to squash the competition.Whether Judge James Boasberg buys this could determine who wins the case — if the FTC can also show that Meta acted illegally through its acquisitions of Instagram and WhatsApp to solidify its alleged monopoly power.Antitrust law is supposed to ensure fair competition, which usually means that people have options for a useful class of goods and services — what’s known as a relevant market. The FTC says that here, that market is “personal social networking services,” or PSNs: spaces where a core purpose is helping people connect with friends and family. While there are many online platforms that overlap with Meta’s services, the FTC argues that virtually none of them serve that market. If internet users want to find and hang out with people they know — as opposed to, say, watching influencers or making work connections — then it’s Mark Zuckerberg’s way or… in the government’s telling, Snapchat, BeReal, and MeWe. Beyond that core definition, PSNs have some other unique features and norms: The apps feature a social graph of users’ friends and family connections, as opposed to mapping users primarily based on their interests. Users can look up and find people they know in real life. And they come to the app to share personal updates with those people.Facebook and Instagram increasingly display videos and photos from influencers and celebrities, but the FTC argues personal social networking remains a core service. It used Instagram chief Adam Mosseri’s testimony to most clearly make this point. In that testimony as well as posts to his own Instagram account, Mosseri said that it’s still important for the app to connect users with their friends. The FTC argues that even if that use case is a smaller portion of what Meta’s apps do these days, it’s still a significant need users have that can virtually only be fulfilled by Facebook and Instagram. While someone might connect with people they know in real life on LinkedIn, they likely won’t primarily share personal updates there. And while they also could follow and interact with people they know on TikTok or YouTube, they’re more likely to passively watch videos from people they don’t.Meta says this is an entirely wrong way to think about it. Social media platforms compete for users’ time and attention, so whether a particular app is squarely aimed at so-called friends and family sharing is beside the point. Facebook and Instagram have evolved to show more content from people like influencers, shifting further from the use case the FTC says Meta has illegally dominated. The company has already landed some important points that could help its case, and it will get more time to push back on the agency’s framing when it calls its own witnesses in the coming weeks.But as the FTC’s case-in-chief continues into its fifth week, its argument for Meta’s dominance is becoming a lot clearer.Why do people use Facebook?When defining a market, each side is trying to answer a key question: why are people choosing one particular company’s product? A lot of goods and services compete with each other in some sense, but this doesn’t mean they serve the same niche. In the case of sodas, for example, “you could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi,” says George Washington Law professor and former FTC Chair Bill Kovacic. In the tech world, Netflix has claimed its biggest competitors are Fortnite and sleep — but those comparisons probably wouldn’t stand up in court.The FTC says that outside of Facebook and Instagram, only apps like Snapchat and MeWe can fulfill a users’ desire to broadcast personal updates with friends and family online. To make its case, it brought in a string of executives from other social media companies to explain why their apps can’t quite scratch the same itch for users. Strava’s former VP of connected partnerships Mateo Ortega testified that sure, users of the fitness-tracking social media app could share baby photos on the platform, but they probably wouldn’t unless it was in a running stroller. “It’s all about fitness, and while you can post other stuff, it just doesn’t seem as relevant,” he said. “You could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi”Pinterest’s former head of user growth Julia Roberts testified that users who come to Pinterest “expecting it to be like other social media apps … tend to be confused about how to use the product.” That’s because the app is so much not about connecting with other people that it works much differently from other social media platforms. Pinterest is more about finding things users are interested in, she said, so “following is not a big part of the Pinterest experience.”TikTok has a tab where users can watch videos from their friends — identified as people who mutually follow each other. But head of operations Adam Presser testified only about 1 percent of videos watched on the platform are there. The company doesn’t think of itself as competing with Meta’s apps for personal social networking, he testified. And even though side-by-side screenshots of TikTok, Instagram Reels, and YouTube Shorts look identical, Presser said, “when you click out of this view for these other platforms, you would get to essentially what I think of as their core business,” which for Instagram, includes a feed and stories that often contain at least some content from family and friends.At times, Meta’s cross-examination of rival company executives showed the limits of apps’ similarities. When questioning Apple director of product marketing Ronak Shah, Meta sought to show that group chats in Apple’s messaging feature could serve as a social media feed for friends and family sharing. But Shah testified that feed would be limited to 32 people at most, and users can’t just look up each others’ profiles like they would on social platforms. Still, Meta pointed out, Apple’s messages app is listed under social media on its own app store.However, Meta also made important arguments about why the judge should question the FTC’s framing. It pointed out that some documents from TikTok and YouTube owner Google claiming their products are very different from Meta’s were submitted to foreign officials to try to avoid getting drafted into potentially frustrating regulations. It also pointed out when TikTok briefly went dark in the US ahead of a (now-aborted) ban, users flocked to Meta apps, showing consumers see it as a substitute on at least some level. That’s because, Meta argued, competition for users is really about winning their time and attention.Companies can “sometimes make mistakes. They misjudge who their users are”But X VP of product Keith Coleman testified it’s not that useful to think about competition this way. Instead, “it’s much more helpful to understand what people are trying to accomplish in their lives and to try to help them accomplish that.” Under former CEO Jack Dorsey, then-Twitter leaned into focusing on news and users’ interests, Coleman testified, because that’s why people were coming to the platform. Coleman was later surprised at how his own website characterized the product in its help center as a “service for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages.” “I can’t believe that’s on the website,” he said. “That’s pretty wacky.”This point was “a caution that not everything a company writes down or says is necessarily decisive in establishing what the boundary of a market is,” Kovacic said. Companies can “sometimes make mistakes. They misjudge who their users are.”There are real ramifications for internet users here. Going back to Netflix’s comparisons, if the streaming video service went down, some people would probably be happy to play a video game or get a few hours of shut-eye instead. But others would be frustrated that they couldn’t watch a movie, which is why it’s good that Hulu, HBO, and Amazon Prime Video also exist. The FTC’s argument isn’t that Meta owns the only social apps on the internet, it’s that the company faces little competition for a service many people specifically want — so the fact that you probably don’t know anyone using MeWe is sort of the point.How will the judge decide?Ultimately, Boasberg’s market definition — whether it’s Meta’s, the FTC’s, or his own — will come down to a few things: how Meta views itself, how competitors see it, and his own intuition, says Kovacic. ”Notice how much the FTC has been questioning Meta witnesses on the basis of its own internal documents,” he says. “Does the story in the courtroom match the story of your own internal documents?” So far, the documents have shown that Meta has clocked that at least some portion of users come to its products to connect with family and friends, but also that the rise of TikTok has had it looking over its shoulder. In September 2020, Meta told its board that Instagram revenue would be “meaningfully lower” than planned in the second half of the fiscal year because TikTok was drawing users’ attention. But other internal documents have shown Meta’s well aware that at different points in time, users have come to its apps to connect with family and friends, and worriedly took note of other apps entering that space. In a 2018 presentation, Meta found that the highest percentage of surveyed users said they come to Facebook, Instagram, and Snap to “see daily casual moments” and “see special moments.” By contrast, users came to Twitter’s feed for news and YouTube’s for entertainment. And even as Instagram expands into entertainment, the FTC notes that it still advertises its sign-up page as a place to “see photos and videos from your friends.”“Instagram will always need to focus on friends”In a 2018 email, Zuckerberg told Mosseri that “Instagram will always need to focus on friends.” And even though a lot has changed in the social media landscape since then, Mosseri testified that to this day on the app, “friends are an important part of the experience.” Even though users may share fewer of their own updates on Facebook and Instagram, Mosseri admitted that two friends talking in the comments of a public figure’s post counts as an interaction between friends — and one that Instagram actively tries to facilitate.Meta has argued that this special focus on friends and family sharing makes up a shrinking portion of its offerings as it works to compete with fierce rivals like TikTok. But the FTC says it’s still significant enough to monopolize. It’s a scenario that came up in another major tech monopolization case, Kovacic says: the late-1990s lawsuit US v. Microsoft. In that case, Microsoft argued the Justice Department was ignoring how computing would soon move beyond the personal computer to the Internet of Things, meaning it couldn’t truly lock up the computing ecosystem as much as the government alleged.“Judge Jackson in the Microsoft case said, yeah, those things are happening, but not happening fast enough to deny you real market power in this PC and laptop-based market that the Justice Department is emphasizing,” Kovacic says.Still, he adds, a market niche can at some point become so small that it’s no longer significant in the eyes of antitrust law. “You can have a process of change that ultimately renders the market segment unimportant,” he says. “And the hard task of analysis for the judge is to say, has it already happened?”See More:
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