fortnite
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Fortnite’s free to play model has no doubt been a big driver in the battle royale title’s stratospheric success. Epic clearly hasn’t had much issue monetizing the game. While revenue slipped last year, it still managed to pull in a massive windfall of $1.8 billion (down from an even more staggering $2.4 billion).
The company has had no shortage of investments, though it could always use some extra cash for…reasons.
Today, the publisher announced a new model designed to deliver reoccurring payments, in addition to its standard micro transactions — offering up a discount on some of its virtual wares in the process.
The $11.99 monthly Fortnite Crew fee entitles players to a full season battle pass, 1,000 monthly bucks and a Crew Pack featuring an exclusive outfit bundle. The monthly fee adds up — as monthly fees do. It’s certainly significantly pricier than just going in for the standard battle pass, which runs a couple of bucks less and generally lasts a few months or so. Ditto for a 1,000 V-Bucks, which run around $8.
The plan will launch December 2, along Chapter 2, Season 5 of the game. The first pack includes a Galaxia outfit. It’s a space-themed suit that also includes a unicorn-head pickaxe. Content from popular properties like the Star Wars series “The Mandalorian” may also be on the horizon, as well. Certainly exclusive access to well-known IP would go a ways toward sweetening the appeal of yet another monthly subscription.
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South Korea-based PUBG Corporation, which runs sleeper hit gaming title PUBG Mobile, announced last week that it plans to return to India, its largest market by users. But its announcement did not address a key question: Is India, which banned the app in September, on the same page?
The company says it will locally store Indian users’ data, open a local office and release a new game created especially for the world’s second-largest internet market. To sweeten the deal, PUBG Corporation also plans to invest $100 million in India’s gaming, esports and IT ecosystems.
But PUBG’s announcement, which TechCrunch reported as imminent last week, is treading in uncharted territory and it remains unclear if its efforts allay the concerns raised by the government.
Since late June, the Indian government has banned more than 200 apps — including PUBG Mobile, TikTok and UC Browser, all of which identified India as their biggest market by users — with links to China.
New Delhi says it enforced the ban over cybersecurity concerns. The government had received complaints about the apps stealing user data and transmitting it to servers abroad, the nation’s Ministry of Electronics and Information Technology said at the time. The banned apps are “prejudicial to sovereignty and integrity of India,” it added.
KRAFTON, the parent firm of PUBG Corporation, inked a deal with Microsoft to store users’ data of PUBG Mobile and its other properties on Azure servers. Microsoft has three cloud regions in India. Prior to the move, PUBG Mobile data concerning Indian users was stored on Tencent Cloud. In addition, PUBG said it is committed to conducting periodic audits of its Indian users’ data.
In India, PUBG has also cut publishing ties with Chinese giant Tencent, its publisher and distributor in many markets. This has allowed PUBG Corporation to regain the publishing rights of its game in India.
At face value, it appears that PUBG Corporation has resolved the issues that the Indian government had raised. But industry executives say that meeting those concerns is perhaps not all it would take to return to the country.
Here’s where things get complicated.
Not a single app India has blocked in the country has made its comeback yet. Some firms such as TikTok have been engaging with the Indian government for more than four months and have promised to make investments in the country, but they are still not out of the woods.
PUBG Corporation, too, has not revealed when it plans to release the new game in India. “More information about the launch of PUBG Mobile India will be shared at a later day,” it said in a statement last Thursday. According to a popular YouTuber who publishes gameplay videos on PUBG Mobile, the company has privately released the installation file of the new game and has hinted that it plans to release the game in India as soon as Friday. (There’s also a big marketing campaign in the works, which could begin on Friday, people familiar with the matter told TechCrunch.)
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Earlier today, Apple announced it will reduce the App Store commissions for smaller businesses so that developers earning less than $1 million per year pay a 15% commission on in-app purchases, rather than the standard 30% commission.
Tim Sweeney, founder of Epic Games, says the move — an apparent reaction to current investigations into Apple by Congress, the European Union, the Justice Department and the Federal Trade Commission on antitrust grounds — doesn’t go nearly far enough. He told the Wall Street Journal that Apple is merely “hoping to remove enough critics that they can get away with their blockade on competition and 30% tax on most in-app purchases. But consumers will still pay inflated prices marked up by the Apple tax.”
Sweeney — whose company has been embroiled in a battle since launched a direct-payment system in its popular “Fortnite” game to bypass Apple’s fees — went even further today in conversation with Dealbook during a two-day event.
Asked about Epic’s fight with the tech giant — which began in August with its payment system, which led to Apple kicking Fortnite off the App Store, which led to Epic filing a civil lawsuit against Apple in the U.S. and more newly to begin legal proceedings against Apple in Australia using the same argument that Apple is acting monopolistically — Sweeney didn’t mince words. He even likened Epic’s ongoing campaign to the fight for civil rights in the U.S.
Said Sweeney: “It’s everybody’s duty to fight. It’s not just an option that somebody’s lawyers might decide, but it’s actually our duty to fight that. If we had adhered to all of Apple’s terms and, you know, taken their 30% payment processing fees and passed the cost along to our customers, then that would be Epic colluding with Apple to restrain competition on iOS and to inflate prices for consumers. So going along with Apple’s agreement is what is wrong. And that’s why Epic mounted a challenge to this, and you know you can hear of any, and [inaudible] to civil rights fights, where there were actual laws on the books, and the laws were wrong. And people disobeyed them, and it was not wrong to disobey them because to go along with them would be collusion to make them status quo.”
While the analogy undoubtedly prompted some eye rolls by attendees, Apple’s announcement today suggests that Epic, which has itself evolving into a powerful and lucrative platform — one valued at $17.3 billion during in August following a $1.78 billion funding deal — is moving the needle, if slightly.
Consider that per a New York TImes report citing Sensor Tower data, Apple’s fee change will affect roughly 98% of the companies that pay Apple a commission — but those same developers account for less than 5% of App Store revenue. Apple reportedly derives the vast majority of its revenue from 2% of developers who will continue to pay it a 30% take.
The question is where it all ends. Interviewer Andrew Ross Sorkin noted that Epic has a price in its own app store, asking if there is any “fair price” in Sweeney’s mind that Apple could charge.
Sweeney noted that Epic itself pays 2% to 3% in transaction costs in developing countries, another 1% for payments support and “maybe 1%” of revenue to cover its bandwidth costs and suggested that an 8% Apple tax, as it has come to be called, might be acceptable in exchange for the service it provides to developers.
In fairness to Apple, Sorkin also observed that similar to Apple, Sweeney talks about “Fortnite” as a platform, one that is “right now not open; there’s not a competitive marketplace where others can effectively develop on top of [the] platform [to] create their own in-app purchases right now.” Sorkin asked if that might be changing.
Sweeney said the company is “moving in that direction.” Pointing to Fortnite Creative, a mode in Fortnite allows users to freely create content, he said that “tens of millions of creators are sharing their content with their friends and with the general public, and there’s a little bit of a business model there. But it’s in the very early stages of development.”
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Epic acquired Houseparty way back in June of last year, following an absolutely massive $1.25 billion raise. It was clear why the Fortnite publisher would be interested in the social video app. After all, Fortnite is one of the most social games around.
Now, after several months of global quarantining, the deal is finally bearing some fruit. Today Epic announced that the title is getting video chat via Houseparty integration. Starting today, the feature is available on a handful of platforms: PC and PlayStation 4 and 5.
Image Credits: Epic
Users will need to install Houseparty on an Android or iOS device and connect the app with their Epic Games account. From there, the video chat will be integrated into the game. Images are cropped tight on the player’s face and a virtual background is added, à la Zoom. Given the all-ages nature of the game, there are some additional safety features on board, including the ability for parents to toggle off the feature in Fortnite’s settings.
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our weekly kickoff that tracks the latest big news, chats about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here — and don’t forget to check out last Friday’s episode that we wound up titling “Fortnite is actually a SaaS company.”
It makes sense in context, I promise.
Anyway, here’s what’s on today’s show:
This has been a wild day to start the week, but with good news.
I suppose a vaccine was always going to eventually make it to this step, but, that said, the United States is seeing record COVID-19 cases today. So mask up and let’s get as many of us across the line as we can.
Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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The British news service is reporting that Nvidia has developed a version of its GeForce cloud gaming service that runs on Safari.
The development means that Fortnite gamers can play the Epic Games title off of servers run by Nvidia. What’s not clear is whether the cloud gaming service will mean significant lag times for players that could effect their gameplay.
Apple customers have been unable to download new versions of Epic Games’ marquee title after the North Carolina-based company circumvented Apple’s rules around in-game payments.
Revenues and rules are at the center of the conflict between Epic and Apple. Epic had developed an in-game marketplace where transactions were not subject to the 30% charges that Apple places on transactions conducted through its platform.
The maneuver was a clear violation of Apple’s terms of service, but Epic is arguing that the rules themselves are unfair and an example of Apple’s monopolistic hold over distribution of applications on its platform.
That’s going to create a lot of hassles for the nearly 116 million iOS Fortnite players, especially for the 73 million players that only use Apple products to access the game, according to the BBC report.
Unlike Android, Apple does not allow games or other apps to be loaded on to its phones or tablets via app stores other than its own.
Nvidia already offers its GeForce gaming service for Mac, Windows, Android and Chromebook computers, but the new version will be available on Apple mobile devices as well, according to the BBC report.
If it moves ahead, Nvidia’s cloud gaming service would be the only one on the market to support iOS users. Neither Amazon’s Luna cloud-gaming platform nor Google’s Stadia service carry Fortnite.
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As ever, launch title choices are likely to be a concern for gamers plunking down cash on a next-gen console. They can, however, take solace in the fact that the immensely popular battle royale title Fortnite will be available for both the PlayStation 5 and Xbox Series X/S when those systems arrive a couple of days apart next week.
Publisher Epic Games has detailed what the titles will look like for the new systems. It notes in a release that, “the Fortnite builds on Xbox Series X/S and PS5 aren’t simply tweaked last-gen builds but new native ones to harness the power of the new consoles.” Existing players will be able to pick up where they left off on the new systems, while taking advantage of some of that shiny new hardware.
The improvements look pretty similar, whether you’re a Sony or Microsoft enthusiast. Both the Xbox Series X and PS5 versions sport 4K resolution at 60 frames a second, faster match loading, split screens with a 60 FPS rate and improved physics and visuals that include features like trees that respond to explosions and better-looking weather effects. The Xbox series S also supports most of these things, but downgrades 4K video for 1080p.
The new Xbox and PlayStation arrive on November 10 and 12, respectively.
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Epic Games, the game engine developer and creator of the wildly popular Fortnite game, is keeping the focus squarely on antitrust issues in its lawsuit against Apple as pressures mount to rein in anti-competitive practices of the world’s largest tech companies.
Antitrust arguments are gaining ground on both sides of the political spectrum, which could present a more favorable environment for Epic to make its case.
Earlier this month the Trump Justice Department filed its antitrust case against Google even as Congress laid out its roadmap for how to limit the monopoly power of a quartet of trillion-dollar companies: Facebook, Amazon, Apple and Alphabet (the parent company behind Google).
Epic’s lawyers acknowledged in the filing that the company breached its contract with Apple, but said that it only took that step because Apple’s contract restrictions are illegal, according to the company.
“When Epic took steps to allow consumers on iOS devices to make those payments directly, it breached some of the contractual restrictions that Apple imposes on iOS developers,” the lawyers wrote. “Epic did so because those contractual restrictions are unlawful. Epic chose to take a stand against Apple’s monopoly to illustrate that competition could exist on iOS, and that consumers would welcome and benefit from it. Epic did so without advance notice to Apple because Apple would otherwise have used its monopoly control to prevent that competition from happening.”
Ultimately, the argument comes down to whether Apple can claim ownership of commerce occurring on the phones they make and through the marketplace that companies are forced to use to access the users of those phones.
“It’s a crazy, misguided view,” according to a tweet from Epic Games founder and chief executive, Tim Sweeney.
What’s most disturbing about Apple’s position is that they seem to truly believe they “own” all commerce involving phones they make, characterizing direct payment as theft, smuggling, and even shoplifting. It’s a crazy, misguided view.https://t.co/dAOkE8fW4S
— Tim Sweeney (@TimSweeneyEpic) October 25, 2020
The argument that Epic is making to the court is that Apple’s contractual restrictions are anticompetitive and deny choice to developers and consumers.
From Epic’s perspective, it took the steps it did in creating an in-game marketplace that its players could access directly, to prove that the App Store is not a necessary part of the iOS ecosystem; “they are just the tools Apple uses to maintain its monopoly,” the company’s lawyers wrote.
“Apple has no right to the fruits of Epic’s labor, other than the rights arising under a contract. Consumers who choose to make in-app purchases in Fortnite pay for Epic’s creativity, innovation and effort—to enjoy an experience that Epic has designed,” the company claimed in its filing.
The legal confrontation between one of the world’s most valuable tech company and one of the tech industry’s rising (and incredibly popular) stars began in August when Epic Games introduced a new payment mechanism to its Fortnite app allowing gamers to purchase its in-game currency directly and bypass Apple’s in-app purchase framework.
The company pushed the same update to its Android game, as well. Both Apple and Alphabet responded by taking down the company’s Fortnite game from its app stores.
Earlier this month, Judge Yvonne Gonzales Rogers, kept a temporary restraining order issued in September in place which simultaneously protected Epic’s Unreal Engine from retaliation by Apple, while allowing Apple to keep Epic’s Fortnite game off of its App Store.
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Fortnite may not be available in VR (or on iOS), but Oculus Quest users will soon be getting their own Fortnite clone for virtual reality.
Nearly two years after its funding and initial launch announcement, BigBox VR is finally ready to roll out its battle royale game, “POPULATION: ONE” to players on the Quest (and the sunsetting Rift hardware).
Co-founders Chia Chin Lee and Gabe Brown started their game development for virtual reality with a shooter called Smashbox Arena, but “POPULATION: ONE” is the big gambit for the game studio.
The COVID-19 pandemic has managed to boost the sales of the Quest, turning it into more of a genuine consumer device instead of just something for the technorati and digital power users. If this new audience for virtual reality can take to the battle royale game in the same way that they’ve taken to Epic Games’ Fortnite title, it could go a long way toward giving Facebook’s platform a wedge to gain market share in what’s become the newest social network.
A lot has been written about how Fortnite has become the social forum for Gen Z and the cohort that’s coming up after them. As these users gravitate to TikTok and Fortnite, Facebook is becoming an afterthought for a new consumer demographic that the social network needs.
And as we wrote earlier, BigBox VR’s title shares more than a passing similarity to Fortnite.
To say the game shares some similarities with Fortnite is an understatement. Not only is it a battle royale title with a shrinking environment, but certain mechanics like gliding in at the beginning to scrounge for weapons and even Fortnite’s building feature are central to the gameplay. That being said, battle royale titles have exploded in the wake of PUBG and they seem to all share a lot among each other. For BigBox, VR is the distinguishing feature, with motion controls and the general feeling that everything is life-sized and in your control.
If the game can replicate Fortnite’s popularity in virtual reality, that could be a coup for Facebook and BigBox VR in a space where the social networking giant has traditionally been pwned.
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Epic Games wins a victory against Apple, Fitbit announces a new smartwatch and Microsoft Word adds a transcription feature. This is your Daily Crunch for August 25, 2020.
The big story: Judge says Apple can’t block Unreal Engine
U.S. District Court Judge Yvonne Gonzalez Rogers weighed in on the legal battle between Epic Games and Apple with a mixed verdict. She denied Epic’s motion to restore the popular game Fortnite to Apple’s App Store, but also ordered Apple not to block Epic’s developer accounts or to restrict developers on Apple platforms from accessing Epic’s Unreal Engine tools.
“Apple has chosen to act severely, and by doing so, has impacted non-parties, and a third-party developer ecosystem,” Rogers said.
A full hearing on the dispute is scheduled for September 28.
The tech giants
Fitbit launches a $330 Apple Watch competitor — The Sense is designed to be a premium alternative to the Versa line, described by the company as its most advanced health smartwatch.
Facebook is bringing a Shop section to its app, while Instagram expands Live Shopping — Facebook Shop doesn’t sound too different from the similarly named Instagram Shop, where users can browse products from their favorite brands and businesses.
Microsoft brings transcriptions to Word — This new feature lets you transcribe conversations, both live and pre-recorded, and then edit those transcripts right inside of Word.
Startups, funding and venture capital
YC’s most anticipated startup raised $16M from a16z before Demo Day — Trove sells a suite of internal compensation tools to other startups.
Self-charging, thousand-year battery startup NDB aces key tests and lands first beta customers — NDB has created a new, proprietary nano diamond treatment that allows for more efficient extraction of electric charge from the diamond used in the creation of the battery.
Instacart workers are demanding disaster relief amid CA wildfires — Gig Workers Collective, a gig worker-activist group led by Instacart shoppers, is asking Instacart to provide disaster relief to workers impacted by natural disasters.
Advice and analysis from Extra Crunch
How to establish a startup and draw up your first contract — We invited James Alonso from Magnolia Law and Adam Zagaris from Moonshot Legal to join us at TechCrunch Early Stage to give us a 360 overview of the legal side of running a startup.
Unity, JFrog, Asana, Snowflake and Sumo Logic file for IPOs in rapid-fire fashion — Alex Wilhelm does a big roundup of new IPO filings.
As DevOps takes off, site reliability engineers are flying high — The emergence of site reliability engineers is not a new trend, but one closely coupled with the theme of DevOps over the last decade.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
Netflix’s ‘Emily’s Wonder Lab’ is smart, interactive science TV for kids — TV science host (and former TechCrunch contributor) Emily Calandrelli told us that “Wonder Lab” is the realization of a concept that she’s been pitching for years.
Porsche experiments with subscription pricing, expands to Los Angeles — Porsche now has three tiers under its newly rebranded Porsche Drive vehicle subscription program.
Meet the Disrupt 2020 ‘TC10’ — The TC10 is a group of entrepreneurs, investors, etc. who have been a staple of our Disrupt conference over the past decade. And they’re all coming back!
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
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