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Activision Blizzard wanted to sell, so it approached Microsoft

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Activision Blizzard leadership and key ownership wanted to sell and was shopping itself around. In early November, the company brought that proposition to Microsoft. Xbox began working on the deal immediately, and the details came together over the holidays. Now, the two companies have agreed to terms on an acquisition that will close by the end of Microsoft’s fiscal 2023 in June of next year. But how did the industry get to this point? The answer to that lies within the volatility of making triple-A, big-budget games.

Activision Blizzard’s future was more uncertain than ever and not only because of the investigations into the alleged civil rights violations at its studios. Making massive blockbuster games was reaching an unsustainable level. While the publisher continues to have some of the biggest hits in the world, it has found it more challenging to commit resources to games outside of the Call of Duty brand. And in an industry where talent is in high demand, Activision struggled to attract the people that actually make the games. The company needed a reset, and that led its leadership to consider the possibility of selling to a larger corporation.

This might seem counterintuitive because Activision is responsible for the biggest franchise in the console space. Just yesterday, industry-tracking firm The NPD Group confirmed that Call of Duty: Vanguard was the No. 1 selling game in the United States in 2021 — No. 2, by the way, was 2020’s Call of Duty: Black Ops Cold War.

How could a company with the best-selling games possibly find itself struggling to find a path forward?

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Activision tapped out Call of Duty, and didn’t know what to do next

Activision’s biggest problem is that it had no obvious vector for growth. Over the course of the pandemic, Activision’s revenue grew, and the publisher responded by reinvesting into Call of Duty. That continued a trend where instead of a single, annual Call of Duty product launch, the publisher peeled out parts of that product into a free-to-play battle royale shooter and a mobile version.

All of these parts are successful, but they are also all likely encountering an upward climb in terms of growth. The pandemic is seeing occasional stutters, and gaming can no longer rely on people stuck at home to turn to their consoles and phones. So the only way to truly ensure bigger returns for Call of Duty is to put a lot of development effort into improving the games.

This is the biggest problem for Activision. The industry is flush with cash for senior developers that want to leave to join other studios or start their own. That talent is often choosing to skip over Activision and its headline-attracting toxic work environment.

It is difficult to make bigger and better games every year with fewer and less experienced developers.

This is where Activision traditionally would have turned to Blizzard to fill in the gap, but it is facing a potentially grimmer future. World of Warcraft, the once dominant massively multiplayer online game, is bleeding subscribers with no end in sight. A similar exodus of talent — due to an equally hostile work environment (reportedly) — has forced Blizzard to delay the release of Diablo Immortal, Diablo 4, and Overwatch 2.

Activision Blizzard is in a deep hole, and the current leadership did not want to dig its way out. But don’t feel bad for them, this was all too predictable. Activision’s creative model was only ever possible in an industry where talent was so abundant and willing to sacrifice that they would put up with low pay and frat-boy leadership. It is not coincidence that the company’s disintegration accelerated the moment the pandemic caused the labor market to tighten up.

Consolidation is better than the alternative

The concern now is the specter of market consolidation. Does Microsoft have too much power by taking over one of the biggest publishers in the world? Maybe, but the alternative wasn’t working either. Activision was independent, and it was known for treating employees poorly and its women and minority employees even worse. The glimmer of hope here is that Microsoft’s alternative incentive structure of Game Pass, with its subscription fee, will unlock some of the creativity of the devs that Activision smothered with annual Call of Duty releases.

This consolidation is probably more frightening for independent studios looking in from the outside, though. If Game Pass grows into the dominant gatekeeper of what succeeds and what doesn’t, that could lead to a lot of people getting left out while Xbox hoovers up more and more of the industry’s revenue.

Again, however, it’s not like the system we have now is great either. Independent studios struggle because the industry is producing more games than ever, and we have a stark system of haves and have nots where a few games break out and everyone else struggles to earn a living wage.

These problems are literally more deadly than they should be in the United States because we do not have universal, single-payer health care.

But even as Microsoft takes over Activision, that is not the end of the story. Talent that is currently at Blizzard, Infinity Ward, and Toys for Bob will almost certainly depart in the next few years to start their own studios. And investors, with the hope of an eventual Xbox-acquisition payday, will fund those new ventures. And this broken system will continue, and hopefully we get plenty of good games and developers are able to feed their families.

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Down rounds are still rare by historical standards • TechCrunch

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If you thought that the recent venture capital market was tough, let me tell you about 2016, 2017, 2018, 2019 and 2020.

With the first week of December under our belts, we’re not too far away from the end of the year. And that means that 2022’s venture capital story has largely been written. It’s not a single narrative; instead, this year started on a high, with momentum from the monstrous 2021 funding period persisting into the new year. From that point, we’ve seen a slowdown accelerate into what some consider a downturn.


The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.


Startups raised lots of capital this year. Less, yes, than last year, but more than in nearly any year in recent memory. It’s still a good time to build a tech upstart.

Does that perspective feel too sunny when we hear so much doom and gloom on Twitter regarding startup prospects in a more conservative investing climate?

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Howie Mandel gets a digital twin from DeepBrain AI

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Howie Mandel is stepping into the metaverse. DeepBrain AI has created a pretty realistic AI version of comedian and actor Mandel.

Deepbrain AI, based in South Korea and Palo Alto, California, calls its creation “AI Howie,” and it’s an interactive virtual human and digital twin for immersive and personalized fan experiences. AI Howie mentions VentureBeat and talks to me in the attached videos.

Unlike the “deepfakes” of Tom Cruise and other actors, the real Howie Mandel cooperated with DeepBrain AI to create the virtual human AI replica of the famous comedian, actor, host, and technology enthusiast. We used “virtual Paris” AI character at our recent MetaBeat event in San Francisco.

“I am equally thrilled, excited, and terrified to finally have the ability of showing up and doing things without going anywhere or doing anything,” said Mandel, in a statement. “Thank you, DeepBrain.”

DeepBrain AI applies deep learning technology to create hyper-realistic virtual humans through its AI Studios and the AI Human platforms. These virtual humans are digital twins of the real person, with the same appearance, voice, gestures, and subtle mannerisms. The AI Studios platform enables script-to-video software that synthesizes dynamic video content in seconds, producing the quickest and most
realistic AI-generated videos. The script-to-video editor makes it easy for customers to select a model and then make it say something based on a script. Within a minute or so the video is made.

This is a powerful communication and marketing tool for celebrities, professional athletes, news anchors, and even politicians. Before working with Howie Mandel, the DeepBrain AI team created digital twins of Premier League soccer superstar Son Heung-Min, multiple news anchors across Asia, and South Korean president Yoon Suk-yeol.

Joe Murphy, business development manager for DeepBrain AI, said in an interview with VentureBeat that the virtual Howie is a conversational model that you pepper with questions. DeepBrain AI designs and develops these virtual humans for the purpose of creating digital twins (like Howie Mandel), digital people, and avatars.

It takes about four weeks of machine learning work to create a Howie Mandel digital twin.

“We create models of real people,” Murphy said. “We also have completely synthetic virtual humans. That is what we’ll call digital people. And then avatars are just the basic Roblox type of avatars. But where our technology comes in with the digital twins is we go through a deep learning process to clone the person’s voice, their mannerisms, their face, the way their eyes move, the way their lips move.”

He added, “So we create what we call the digital twin of the real person with all the uniqueness of that person. Our mission is to use this technology that we’ve developed throughout Asia and bring it to America.”

In addition to the script-to-video capabilities, the company provides fully conversational experiences with its AI Human software. The AI Human solution enables fans to interact and engage with AI Howie by simply asking questions. For example, when asked, “What was your favorite act on AGT this season?” the AI Howie model responds in real-time to support interactive, fun, and engaging fan experiences.

AI Humans are available within mobile apps, web browsers, or voice-activated kiosks.

“Our vision is to humanize digital experiences and empower creative teams to generate immersive content at scale,” said Eric Jang, DeepBrain AI CEO. “Working with Howie Mandel was a fun experience, and we are excited to see how the AI Howie collaboration will connect with his fans worldwide.”

DeepBrain AI, (formerly Moneybrain), a conversational AI startup based in Seoul, South Korea, has raised $44 million in a series B round led by Korea Development Bank at a post-money valuation of $180 million. The company started in 2016 and it has raised $54 million to date. The company has 130 employees.

The AI is being used for AI news anchors in South Korea and China at four different television networks. The networks flag that the anchor is an AI avatar so that no one gets confused.

The real Howie Mandel spent about a day shooting video with DeepBrain AI.

While multiple companies are working on virtual humans, DeepBrain AI’s avatars are hyperrealistic. One of Asia’s largest insurance companies is also using it, as is a “brand ambassador” for a soccer team.

“When we worked with Howie Mandel, we went down to his studio in Los Angeles, we provided a script, and fed our training data into our neural network,” Murphy said.

It took about a day to do a video shoot with Mandel and about three to four weeks of machine learning time on the computers to generate the first AI model.

Back in January, DeepBrain AI opened its office in Palo Alto, California, and it is talking to partners in Silicon Valley and the rest of the U.S. Over time, Murphy said that the hope is to create AI avatars in realistic 3D for the metaverse. In South Korea, kiosks are appearing in places like banks with both 2D avatars and 3D avatars.

Over time, Murphy said the avatars have gotten better at mannerisms, lip sync, and subtle gestures. The speed of real-time responses in conversations has also gotten faster. The company is talking about doing more with game companies and major brands.

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This Doggy DNA Test Ships Free for the Holidays

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Opinions expressed by Entrepreneur contributors are their own.

Every pet owner wants the best for their animal sidekick. They want to spend as much time as possible with them, even at the office. But being the best dog owner you can be isn’t all about just being present. It helps to understand your dog on a genotypic as well as phenotypic level. That’s one reason why doggy DNA tests have become so popular.



DNA My Dog

If you’re wondering what to get for your pooch this holiday season, look no further than the DNA My Dog Breed Identification Test. If you order by December 8, you’ll get free shipping, but that date is coming up fast so don’t delay.

This simple, painless kit requires just a swab of your dog’s cheek to get a detailed report delivered in two weeks or less. That report includes a custom photo certificate of the breed breakdown found in your dog’s genetic breed composition, a percentage breakdown of the levels found in your dog’s DNA, and a report on the dominant breeds, personality traits, and health concerns that your dog may be genetically predisposed to. All of that information will help you be a better friend to your dog, making smarter decisions about food, training, and healthcare.

The DNA My Dog Kit was awarded at the 2020 GHO Biotechnology Awards and user Bonnie H. writes, “I loved this experience!!! The kit came immediately with great instructions. The results came exactly when promised. When I couldn’t open the attachment with the results, I emailed my concern and got instant help! To find out his DNA has been the coolest experience!”

Lock in free shipping on a unique gift for your dog by December 8. Grab the DNA My Dog Breed Identification Test on sale for 24% off $79 at just $59.99 now.

Prices subject to change.

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