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A trove of imported console games vanish from Chinese online stores
In the world’s largest gaming market, China, console games play a relatively small part as their revenue has been meager compared to mobile and PC games for years — at least by the official numbers (more on this later). There remains a community of hardcore console lovers, but they are finding it harder to get hold of devices and cartridges recently.
A handful of grey market videogame console vendors on Taobao stopped selling and shipping this week, according to checks by TechCrunch and online posts by gamers. Before we examine what might be happening here, a bit of industry history is needed.
In 2000, China banned the sale and import of videogame consoles as concerns over addiction in teenagers grew. Even with the ban, imported consoles still existed in the grey market targeting a group of loyal players. Meanwhile, the online PC and mobile gaming industry flourished, in part thanks to their affordability and the social experience built into their mechanics.
When China finally lifted its restriction on consoles in 2015, giants like Sony and Microsoft quickly responded by releasing Chinese editions of their products through local partners. Nintendo Switch hit the Chinese shelves in 2019 via a much-anticipated partnership with Tencent, which itself is the world’s largest gaming firm. But the grey market largely persisted because mainland Chinese versions of the consoles are subject to strict regulatory oversight, which limits users’ choice to a small friendly range approved by censors.
Many Chinese players thus resort to brick-and-mortar electronics bazaars and online marketplaces to find imported editions of PlayStation, Xbox, and Nintendo Switch, along with their games. These products normally enter China through parallel trading, the import of legitimate goods through unauthorized channels. The games that are brought in normally lack a Chinese gaming license, which is hard to obtain even by local publishers.
Several major videogame console importers on Taobao have suspended business. Screenshot: TechCrunch
It’s unclear how many imported consoles and console games were taken down from Taobao and what triggered the purge. Tgbus, one of the largest console game sellers on Taobao with 462,000 followers, currently has zero product listing. When asked by TechCrunch, a customer service staff said the store has temporarily halted shipping due to “a water leak in the warehouse.” When we pressed further, the person said it was due to “an electrical-equipment failure.”
Other vendors keep their responses vague, citing “special reasons” for the suspended services. One seller named the “Shanghai Gaming Console Store” said it suspended its business at the request of Taobao, without elaborating further.
Alibaba could not be immediately reached for comment.
The incident appears to inflict mostly console sellers with a sizable business at this moment. Imported cartridges and console devices can still be found on smaller Taobao stores and alternative platforms like Pinduoduo by searching the right keyword.
Some users see the move as China further tightening its grip on what gamers get to play. Over the past year, Apple’s China App Store removed thousands of games to wipe out games without China’s official greenlight. Other motives are politcal. Animal Crossing was pulled from grey market stores on Taobao and Pinduoduo after one of Hong Kong’s most well-known pro-democracy activists used the game as his protest ground.
Other users point out that customs officers regularly clamp down on parallel trading, which is designed to evade import tax because goods are carried by traders who appear as regular travelers. This isn’t the first time the console grey market has been hit, either. Some grey goods manage to fly under the radar before they attract critical sales. There are signs that the new Monster Hunter Rise, a Nintendo-Switch exclusive which isn’t available on the Chinese console edition, is stoking much interest among local players in recent weeks and may have driven some imports.
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Valoreo closes on $50M to roll up LatAm e-commerce brands
A new breed of startups is acquiring and growing small but promising third-party merchants, and building out their own economies of scale.
And while there are a number of such startups based in the U.S. and Europe, none had emerged in the Latin American market. Until now.
Valoreo, a Mexico City-based acquirer of e-commerce businesses, announced Tuesday that it has raised $50 million of equity and debt financing in a seed funding round.
The dollar amount is large for a seed round by any standards, but most certainly ranks among the highest ever raised by a Latin American startup — further evidence of increased investor interest in the region’s burgeoning venture scene.
Upper90, FJ Labs, Angel Ventures, Presight Capital and a slew of angel investors participated in the round. Those angels included David Geisen, head of Mercado Libre Mexico; BEA Systems’ co-founder Alfred Chuang; and Tushar Ahluwalia, founder of Razor Group, a European marketplace aggregator, among others.
Founded in late 2020, Valoreo aims to invest in, operate and scale e-commerce brands as part of its self-described mission “to bring better products at more affordable prices” to the Latin American consumer.
“We were substantially oversubscribed and were therefore able to select investors that not only provide capital, but also additional know-how in key areas,” said co-founder Alex Gruell.
Valoreo joins the growing number of startups focused on rolling up e-commerce brands.
The company’s model is similar to that of Thrasio — which just raised another $750 million –– and Perch in the U.S. But Valoreo says its approach has been tailored to “the specific needs of the Latin American market and is specifically focused on the Latin American end customer.”
Another new company in the space called Branded recently launched its own roll-up business on $150 million in funding. Others in the space include Berlin Brands Group, SellerX, Heyday and Heroes.
But as my colleague Ingrid Lunden points out, “the feverish pace of fundraising in the area of FBA roll-ups feels very much like a bubble in the market — not least because none of these still-young companies have yet to prove that the strategy to buy up and consolidate these sellers is a useful and profitable one.”
How it works
Valoreo (which the company says is an extension of the Spanish word “valor,” meaning to add value), acquires merchants that operate their own brands and primarily sell on online marketplaces such as Mercado Libre, Amazon and Linio. The company targets brands that offer “category-leading products” and which it believes have “significant growth potential.” It also develops brands in-house to offer a broader selection of products to the end customer.
Like Thrasio, Valoreo says it’s able to help entrepreneurs who may lack the resources and access to capital to take their businesses to the next level.
Co-founder and co-CEO Stefan Florea says the company takes less than five weeks typically from its initial contact with a seller to a final payout.
Then, the acquired and developed brands are integrated into the company’s consolidated holding. By tapping its team of “specialists” in areas such as digital marketing and supply chain management, it claims to be able to help these brands “reach new heights” while giving the entrepreneurs behind the companies “an attractive exit,” or partial exit in some cases.
“We have different structures, always taking into account the personal objectives of the seller,” Stefan Florea added.
Generally Valoreo acquires the majority of the business, with the purchase price typically being a combination of an upfront cash payment and a profit share component so sellers can still earn money.
Looking ahead, Valoreo plans to use its new capital mostly to acquire and develop “interesting” brands, as well as build out its current team of 10 while expanding its infrastructure and operations.
The company is currently focused on the Mexican and Brazilian markets, but is planning its expansion into other Latin American countries where it has strong local support systems, such as Colombia, according to co-founder Martin Florea.
“Our mission is to be a pan-Latin American player providing value to the entire region,” Martin Florea said. “Latin America in general and Mexico in particular are in a distinct situation which provides phenomenal opportunities for e-commerce merchants on the one hand but also presents particular challenges on the other hand.”
Those challenges, according to Martin Florea, include limited access to growth capital, a lack of specialized expertise in certain areas (such as supply chain management), limited opportunities to sell their business and pursue new ventures, as well as operational burdens and the lack of capacities to expand into new countries and marketplaces.
Valoreo emphasizes it is not out to compete with Mercado Libre, Amazon and other regional marketplaces but instead wants to partner with them.
“Without these platforms, this opportunity would not exist,” Martin Florea said.
Hernán Fernández, founder and managing partner of Angel Ventures, believes Valoreo “will add a lot of value” to the Latin American e-commerce landscape, which is experiencing both market growth and the fragmentation of the seller space.
Jüsto co-founder and CEO (and Valoreo investor) Ricardo Weder notes that the e-commerce market is at an inflection point in Latin America. According to eMarketer, the region was the fastest-growing e-commerce market in the world in 2020, with 37% year over year growth. However, it is a much more fragmented and crowded market compared to other regions, such as the United States.
This, Valoreo believes, provides an opportunity for consolidation.
“There are still many consumers that are not aware of the great variety of outstanding local brands that sell innovative products on marketplaces online,” Stefan Florea said. “In the U.S. or Europe e-commerce is the new way of shopping, offering an even greater range of products and brands than offline shopping. We firmly believe it will not take long until end-customers in Mexico and across Latin America discover all the benefits that e-commerce offers.”
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Etsy’s 2-year migration to the cloud brought flexibility to the online marketplace
Founded in 2005, Etsy was born before cloud infrastructure was even a thing.
As the company expanded, it managed all of its operations in the same way startups did in those days — using private data centers. But a couple of years ago, the online marketplace for crafts and vintage items decided to modernize and began its journey to the cloud.
That decision coincided with the arrival of CTO Mike Fisher in July 2017. He was originally brought in as a consultant to look at the impact of running data centers on Etsy’s ability to innovate. As you might expect, he concluded that it was having an adverse impact and began a process that would lead to him being hired to lead a long-term migration to the cloud.
That process concluded last month. This is the story of how a company born in data centers made the switch to the cloud, and the lessons it offers.
Stuck in a hardware refresh loop
When Fisher walked through the door, Etsy operated out of private data centers. It was not even taking advantage of a virtualization layer to maximize the capacity of each machine. The approach meant IT spent an inordinate amount of time on resource planning.
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Apple tweaks its App Store algorithm as antitrust investigations loom
That Apple has used its App Store to offer itself a competitive advantage is nothing new. TechCrunch and others have been reporting on this problem for years, including those times when Apple chose to display its apps in the No. 1 position on the Top Charts, for example, or when it stole some of the App Store’s best ideas for its own, banned apps that competed with iOS features or positioned its apps higher than competitors in search. Now, in the wake of antitrust investigations in the U.S. and abroad, as well as various anti-competitive lawsuits, Apple has adjusted the App Store’s algorithm so fewer of its own apps would appear at the top of the search results.
The change was reported by The New York Times on Monday, which presented Apple with a lengthy analysis of app rankings.
It even found that some searches for various terms would display as many as 14 Apple-owned apps before showing any results from rivals. Competitors could only rank higher if they paid for an App Store search ad, the report noted.
That’s a bad look for Apple, which has recently been trying to distance itself and its App Store from any anti-competitive accusations.
In May, for example, Apple launched a new App Store website designed to demonstrate how it welcomes competition from third-party apps. The site showed that for every Apple built-in app, there were competitors available throughout the App Store.
But availability in the store and discoverability by consumers are two different things.
Apple admitted to the NYT that for over a year many common searches on the App Store would return Apple’s own apps, even when the Apple apps were less popular or relevant at times. The company explained the algorithm wasn’t manipulated to do so. For the most part, Apple said its own apps ranked higher because they’re more popular and because they come up in search results for many common terms. The company additionally said that one feature of the app’s algorithm would sometimes group apps by their maker, which gave Apple’s own apps better rankings than expected.
Above: via the NYT, the average number of Apple apps that returned at the top of the search results by month
Apple said it adjusted the algorithm in July to make it seem like Apple’s own apps weren’t receiving special treatment. According to the NYT, both Apple VP Philip Schiller, who oversees the App Store, and SVP Eddy Cue, who oversees many of Apple’s apps, confirmed that these changes have not fully fixed the problem.
The issue, as Apple explains it, is that its own apps are so popular that it had to tweak its algorithm to pretend they are not. Whether or not this is true can’t be independently verified, however, as Apple doesn’t allow any visibility into metrics like searches, downloads or active users.
Maybe it’s time for Apple’s apps to exit the App Store?
The report, along with the supposed ineffectiveness of the algorithm’s changes, begs the question as to whether Apple’s apps should show up in the App Store’s charts and search results at all, and if so, how.
To be fair, this is a question that’s not limited to Apple. Google today is facing the same problem. Recently, the CEO of a popular software program, Basecamp, called Google’s paid search ads a “shakedown,” arguing that the only way his otherwise No. 1 search result can rank at the top of the search results page is to buy an ad. Meanwhile, his competitors can do so — even using his brand name as the keyword to bid against.
The same holds true for the App Store, but on a smaller scale than the entirety of the web. That also makes Apple’s problem easier to solve.
For example, Apple could simply choose to offer a dedicated section for its own software downloads, and leave the App Store as the home for third-party software alone.
This sort of change could help to eliminate concerns over Apple’s anti-competitive behavior in the search results and chart rankings. Apple might balk against this solution, saying that users should have an easy way to locate and download its own apps, and the App Store is the place to do that. But the actual marketplace itself could be left to the third-party software while the larger App Store app — which today includes a variety of app-related content, including app reviews, interviews with developers, app tips and a subscription gaming service, Apple Arcade — could still be used to showcase Apple-produced software.
It could just do so outside the actual marketplace.
Here’s how this could work. If users wanted to re-install an Apple app they had deleted or download one that didn’t come pre-installed on their device, they could be directed to a special Apple software download page. Pointers to this page could be in the App Store app itself as well as in the iOS Settings.
An ideal spot for this section could even be on the existing Search page of the App Store.
With a redesign, Apple could offer a modified search screen where users could optionally check a box to return a list of apps results that would come only from Apple. This would indicate intentional behavior on the consumer’s part. That is, they are directly seeking an Apple software download — as opposed to the current situation where a user searches for “Music” and sees Apple’s own music app appear above all the others from rivals like Spotify and Pandora.
Alternately, Apple could just list its own apps on this page or offer a link to this dedicated page from the search screen.
And these are just a few variations on a single idea. There are plenty of other ways the App Store could be adjusted to be less anti-competitive, too.
As another example, Apple could also include the “You Might Also Like” section in its own apps’ App Store listings, as it does for all third-party apps.
Above: Apple Music’s App Store Listing
This section directs users to other apps that match the same search query right within the app’s detail page. Apple’s own apps, however, only include a “More by Apple” section. That means it’s keeping all the search traffic and consumer interest for itself.
Above: Spotify’s App Store Listing
Or it could reduce the screen space dedicated to its own apps in the search results — even if they rank higher — in order to give more attention to apps from competitors while still being able to cater to users who were truly in search of Apple’s software.
But ultimately, how Apple will have to behave with regard to its App Store may be left to the regulators to decide, given Apple’s failure to bake this sort of anti-competitive thinking into its App Store design.
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Downloads needed to rank No. 1 on App Store is down 30+% since 2016 for apps, up 47% for games
With the App Store’s big makeover in fall 2017, Apple attempted to shift consumers’ attention away from the Top Charts and more toward editorial content. But app developers still want to make it to the No. 1 position. According to new research from app store intelligence firm Sensor Tower, it’s become easier for non-game apps over the past few years to achieve the top ranking.
Specifically, the firm found that the median number of daily downloads required for non-game applications on the U.S. iPhone App Store to reach No. 1 decreased around 34%, from 136,000 to 90,000 in 2018, then increased a little more than 4% to 94,000 this year.
At the same time, the number of non-game installs on the U.S. App Store had increased by 33% between Q1 2016 and Q1 2019.
These findings, Sensor Tower suggests, indicate that the U.S. market for the top social and messaging apps has become saturated, with downloads for top apps like Facebook and Messenger decreasing over time. In addition, no other apps have found the same level of success that Snapchat and Bitmoji did back in 2016 and 2017, the report adds.
For example, Messenger saw 5 million U.S. App Store installs in November 2016 while Bitmoji and Snapchat passed 5 million installs in August 2016 and March 2017, respectively. And no other non-game app has topped 3.5 million installs in a single month since March 2017.
Meanwhile, the decline in downloads needed to reach the No. 1 spot on Google Play was even more significant.
The median daily downloads for the top non-game app decreased by 65%, from 209,000 in 2016 to 74,000 so far in 2019.
Similarly, the store saw a decrease in installs among top apps, including Messenger, Facebook, Snapchat, Pandora and Instagram. Messenger, for example, saw its yearly installs fall by 68% from nearly 80 million in 2016 to 26 million in 2018.
Games
With mobile games, however, it’s a different story across both app stores.
On the Apple App Store, it has taken 174,000 downloads for a game to reach the top of the rankings on any given day in 2019 — 85% more the 94,000 installs required for non-game app to reach the top of the charts.
This figure also represents an increase of 47% compared to the 118,000 median daily downloads required to top the charts back in 2016, Sensor Tower said.
In part, this trend is due to the rise of hyper-casual gaming. So far in 2019, 28 games have reached the No. 1 position on the U.S. App Store, with hyper-casual games making up all but four of those. And of those four, only Harry Potter: Wizards Unite spent more than one day at the top of the charts. Meanwhile, hyper-casual games like aquapark.io and Colorbump 3D have spent 25 and 30 days at No. 1, respectively.
On Google Play, the median daily installs to reach the No. 1 position increased from 70,000 in 2017 to 116,000 so far in 2019, or 66% growth. Overall game downloads, however, decreased 16% from 646 million in Q1 2017 to 544 million in Q1 2019.
Similarly, 21 out of the 23 games that reached the top spot this year have been hyper-casual titles, like Words Story or Traffic Run.
Breaking the top 10
While topping the charts has gotten easier for non-game apps over the years, breaking into the top 10 has gotten more difficult. Median U.S. daily installs for the No. 10 free non-game app increased 11%, from 44,000 in 2016 to 49,000 in 2019.
On Google Play, median daily installs for non-game apps fell nearly 50%, from 55,000 median daily installs in 2016 to 31,000 in 2019.
For games, the No. 10 game’s spot on the App Store increased from 25,000 median daily installs in 2016 to 43,000 so far in 2019, and Google Play saw 26% growth, from 27,000 to 34,000 during the same period.
Categories making the Top 10
In terms of breaking into the top 10 by category, Photo & Video apps on the App Store present the most challenge. The category where YouTube, Instagram, TikTok and Snapchat reside saw a median daily amount of more than 16,000 downloads for the No. 10 app.
This was followed by Shopping (15,300 daily downloads for the No. 10 app), Social Networking (14,500), Entertainment (12,600) and Productivity (12,400).
On Google Play, Entertainment apps — like Hulu, Netflix and Bitmoji — need around 17,100 U.S. installs in a day to reach the top 10. This is followed by Shopping (10,800), Social (9,100), Music (8,200) and Finance (8,000).
Beyond the U.S.
Outside the U.S., a non-game app needs approximately 91,000 downloads to reach the top 10 on the App Store in China — higher than the 49,000 installs needed in the U.S. For games, the U.S. is the most difficult to crack the top 10, with a median of 43,000 daily downloads for the No. 10 game.
On Google Play, India required the most downloads to reach the top 10, with apps needing 256,000 downloads in a day and games needing 117,000 downloads.
Of course, the App Store’s ranking algorithms — nor Google Play’s algorithms — don’t rely on downloads alone to determine an app’s ranking. Apple takes into consideration downloads and velocity, among other undocumented factors. Google Play does something similar.
But these days, developers are more concerned with showing up highly ranked in app store searches than they are on top charts, where they’ll need to consider numerous other factors beyond downloads — like keywords, description, user engagement and even app quality, among other things.
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App revenue tops $39 billion in first half of 2019, up 15% from first half of last year
App store spending is continuing to grow, although not as quickly as in years past. According to a new report from Sensor Tower, the iOS App Store and Google Play combined brought in $39.7 billion in worldwide app revenue in the first half of 2019 — that’s up 15.4% over the $34.4 billion seen during the first half of last year. However, at that time, the $34.4 billion was a 27.8% increase from 2017’s numbers, then a combined $26.9 billion across both stores.
Apple’s App Store continues to massively outpace Google Play on consumer spending, the report also found.
In the first half of 2019, global consumers spent $25.5 billion on the iOS App Store, up 13.2% year-over-year from the $22.6 billion spent in the first half of 2018. Last year, the growth in consumer spending was 26.8%, for comparison’s sake.
Still, Apple’s estimated $25.5 billion in the first half of 2019 is 80% higher than Google Play’s estimated gross revenue of $14.2 billion — the latter a 19.6% increase from the first half of 2018.
The major factor in the slowing growth is iOS in China, which contributed to the slowdown in total growth. However, Sensor Tower expects to see China returning to positive growth over the next 12 months, we’re told.
To a smaller extent, the downturn could be attributed to changes with one of the top-earning apps across both app stores: Netflix.
Last year, Netflix dropped in-app subscription sign-ups for Android users. Then, at the end of December 2018, it did so for iOS users, too. That doesn’t immediately drop its revenue to zero, of course — it will continue to generate revenue from existing subscribers. But the number will decline, especially as Netflix expands globally without an in-app purchase option, and as lapsed subscribers return to renew online with Netflix directly.
In the first half of 2019, Netflix was the second highest earning non-game app with consumer spending of $339 million, Sensor Tower estimates, down from $459 million in the first half of 2018. (We should point out the firm bases its estimates on a 70/30 split between Netflix and Apple’s App Store that drops to 85/15 after the first year. To account for the mix of old and new subscribers, Sensor Tower factors in a 25% cut. But Daring Fireball’s John Gruber claims Netflix had a special relationship with Apple where it had an 85/15 cut from year one.)
In any event, Netflix’s contribution to the app stores’ revenue is on the decline.
In the first half of last year, Netflix had been the No. 1 non-game app for revenue. This year, that spot went to Tinder, which pulled in an estimated $497 million across the iOS App Store and Google Play, combined. That’s up 32% over the first half of 2018.
But Tinder’s dominance could be a trend that doesn’t last.
According to recent data from eMarketer, dating app audiences have been growing slower than expected, causing the analyst firm to revise its user estimates downward. It now expects that 25.1 million U.S. adults will use a dating app monthly this year, down from its previous forecast of 25.4 million. It also expects that only 21% of U.S. single adults will use a dating app at all in 2019, and that will only grow to 23% by 2023.
That means Tinder’s time at the top could be overrun by newcomers in later months, especially as new streaming services get off the ground (assuming they offer in-app subscriptions); if TikTok starts taking monetization seriously; or if any other large apps from China find global audiences outside of China’s third-party app stores.
For example, Tencent Video grossed $278 million globally in the first half of 2019, outside of the third-party Chinese Android app stores. That made it the third-largest non-game app by revenue. And Chinese video platform iQIYI and YouTube were the No. 4 and No. 5 top-grossing apps, respectively.
Meanwhile, iOS app installs actually declined in the first half of the year, following the first quarter that saw a decline in downloads, Q1 2019, attributed to the downturn in China.
The App Store in the first half of 2019 accounted for 14.8 billion of the total 56.7 billion app installs.
Google Play installs in the first half of the year grew 16.4% to 41.9 billion, or about 2.8 times greater than the iOS volume.
The most downloaded apps in the first half of 2019 were the same as before: WhatsApp, Messenger and Facebook led the top charts. But TikTok inched ahead of Instagram for the No. 4 spot, and it saw its installs grow around 28% to nearly 344 million worldwide.
In terms of mobile gaming specifically, spending was up 11.3% year-over-year in the first half of 2019, reaching $29.6 billion across the iOS App Store and Google Play. Thanks to the fallout of the game licensing freeze in China, App Store revenue growth for games was at $17.6 billion, or 7.8% year-over-year growth. Google Play game spending grew by 16.8% to $12 billion.
The top-grossing games, in order, were Tencent’s Honor of Kings, Fate/Grand Order, Monster Strike, Candy Crush Saga and PUBG Mobile.
Meanwhile, the most downloaded games were Color Bump 3D, Garena Free Fire and PUBG Mobile.
Image credits: Sensor Tower
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Why identity startup Auth0’s founder still codes: It makes him a better boss
If you ask Eugenio Pace to describe himself, “engineer” would be fairly high on the list.
“Being a CEO is pretty busy,” he told TechCrunch in a call last week. “But I’m an engineer in my heart — I am a problem solver,” he said.
Pace, an Argentinan immigrant to the U.S., founded identity management company Auth0 in 2013 after more than a decade at Microsoft. Auth0, pronounced “auth-zero,” has been described as like Stripe for payments or Twilio for messaging. App developers can add a few lines of code and it immediately gives their users access to the company’s identity management service.
That means the user can securely log in to the app without building a homebrew username and password system that’s invariably going to break. Any enterprise paying for Auth0 can also use its service to securely logon to the company’s internal network.
“Nobody cares about authentication, but everybody needs it,” he said.
Pace said Auth0 works to answer two simple questions. “Who are you, and what can you do?” he said.
“Those two questions are the same regardless of the device, the app, or whether if I’m an employee of somebody or if I am an individual using an app, or if I am using a device where there’s no human attached to it,” he said.
Whoever the users are, the app needs to know if the person using the app or service is allowed to, and what level of access or functionality they can get. “Can you transfer these funds?,” he said. “Can you approve these expense reports? Can you open the door of my house?” he explained.
Pace left Microsoft in 2012 and founded Auth0 during the emergence of Azure, which transformed Microsoft from a software giant into a cloud company. It was at Microsoft where he found identity management was one of the biggest headaches for developers moving their apps to the cloud. He wrote book after book, and edition after edition. “I felt like I could keep writing books about the problem — or I can just solve the problem,” he said.
So he did.
Instead of teaching developers how to become experts in identity management, he wanted to give them the tools to employ a sign-on solution without ever having to read a book.
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A cryptocurrency stealing app found on Google Play was downloaded over a thousand times
Researchers have found two apps masquerading as cryptocurrency apps on Android’s app store, Google Play.
One of them was largely a dud. The second was designed to steal cryptocurrency, the researchers said.
Security firm ESET said one of the two fake Android apps impersonated Trezor, a hardware cryptocurrency wallet. The good news is that the app couldn’t be used to steal cryptocurrency stored by Trezor. But the researchers found the app was connected to a second Android app that could have been used to scam funds out of unsuspecting victims.
Lukas Stefanko, a security researcher at ESET — who has a long history of finding dodgy Android apps — said the fake Trezor app “appeared trustworthy at first glance” but was using a fake developer name to impersonate the company.
The fake app was designed to trick users into turning over a victim’s login credentials. Uploaded to Google Play on May 1, the app quickly ranked as the second-most popular search result when searching for “Trezor” behind the legitimate app, said Stefanko. Users on Reddit also found the fake app and reported it as recently as two weeks ago.
According to Stefanko, the server where user credentials were sent was linked to a website linked to another fake wallet, purportedly to store cryptocurrency, and also listed on Google Play since February 25.
“The app claims it lets its users create wallets for various cryptocurrencies,” said Stefanko. “However, its actual purpose is to trick users into transferring cryptocurrency into the attackers’ wallets – a classic case of what we’ve named wallet address scams in our previous research into cryptocurrency-targeting malware.”
Both apps were collectively downloaded more than a thousand times. After ESET contacted Google, the apps were pulled offline the next day.
Read more:
- Half a million Android users tricked into downloading malware from Google Play
- Security researchers find over a dozen iPhone apps linked to Golduck malware
- A powerful spyware app now targets iPhone owners
- Google warns app developers of three malicious SDKs being used for ad fraud
- Apple tells app developers to disclose or remove screen recording code
- Apple restores Google’s internal iOS apps after certificate misuse punishment
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GoTrendier raises $3.5 million to take on Spanish-language fashion marketplaces
Thanks to environmentally conscious young buyers, throwaway culture is dying not only in the U.S., but also in Latin America — and startups are poised to jump in with services to help people recycle used clothing.
GoTrendier, a peer-to-peer fashion marketplace operative in Mexico and Colombia, has raised $3.5 million USD to do just that. And investors are eyeing the startup as the digital fashion marketplace growth leader in Spanish-speaking countries.
GoTrendier, founded by Belén Cabido, is a platform that lets users buy and sell secondhand clothing. Cabido tells me that the new capital will enable GoTrendier to expand deeper into Mexico and Colombia, and launch in a new country: Chile.
GoTrendier enables users to buy and sell used items through the GoTrendier site and app. The platform categorizes users as either salespeople or buyers. Salespeople create their own stores by uploading photos of garments along with a description and sale price. Buyers browse the platform for deals and once a buyer bites, the seller is given a prepaid shipping label.
Sound familiar? Businesses like Poshmark and GoTrendier have no actual inventory, which allows the companies to take on less of a risk by having smaller overhead costs. In turn, the company acts as more of a social community for fashion exchanges.
In order to make money, Poshmark takes a flat commission of $2.95 for sales under $15. For anything more than that, the seller keeps 80 percent of their sale and Poshmark takes a 20 percent commission. Poshmark also owes its success to the socially connected shopping experience it created and the audience building features available to sellers — as detailed in this Harvard Business School study. GoTrendier has a similar commission pricing strategy, taking 20 percent off plus an additional nine pesos (about 48 cents in U.S. currency) for all purchases. The service also takes advantage of social media and sharing features to help connect and engage its fashion-loving community.
But these companies are also largely venture-backed. In the case of GoTrendier, the round gave shareholder entry to Ataria, a Peruvian fund that invests in early-stage tech companies with high earning potential. Existing investors Banco Sabadell and IGNIA reinforced their position, along with Barcelona-based investors Antai Venture Builder, Bonsai Venture Capital and Pedralbes Partners.
GoTrendier amassed a user base of 1.3 million buyers and sellers throughout its four years of existence. The service operates in Mexico and Colombia, and will use its newest capital to launch in Chile — another market Cabido says is experiencing high demand for a secondhand fashion buying and selling service.
Online marketplace companies are growing in Latin America as smartphone adoption and digital banking services multiply in the region. But international expansion has proven to be an issue. Enjoei, a similar fashion marketplace that owns the market share in Brazil, had a botched attempt at expanding to Argentina due to Portugese-Spanish language barriers and eventually determined that Brazil was a large enough market in which to build its business — thus carving out an opportunity for companies like GoTrendier that offer the same services to dominate the surrounding Spanish-speaking markets in Latin America.
Many have remarked that Latin America’s tech scene is filled with copycats — or companies that emulate the business models of American or European startups and bring the same service to their home market. In order to secure bigger foreign investment checks, founders from growing tech regions like Latin America certainly must invent proprietary technologies. Yet there’s still value — and capital — in so-called copycat businesses. Why? Because the users are there and in some cases it’s just easier to start up.
According to investor Sergio Pérez of Sabadell Venture Capital, “The volume of the market for buying and selling second-hand clothes in the world was 360 million transactions in 2017 and is expected to reach 400 million in 2022.” A 2018 report from ThredUp also claimed that the size of the global secondhand market is set to hit $41 billion by 2022. The “throwaway” culture is disappearing thanks to environmentally conscious millennial buyers. As designer Stella McCartney famously said, “The future of fashion is circular – it will be restorative and regenerative by design and the clothes we love never end up as waste.” By buying on GoTrendier, the company claims its users have been able to save USD $12 million and have avoided more than 1,000 tons of CO2 emissions.
Founders building companies in Latin America aren’t necessarily as capital-hungry as Silicon Valley-based founders, (where a Series A can now equate to $68 million, apparently). Cabido tells me her company is able to fulfill operations and marketing needs with a lean staff of 30, noting that there’s a lot of natural demand for buying and selling used clothing in these regions, thus creating organic growth for her business. She wasn’t looking to raise capital, but investors had their eye on her. “[Investors] saw the tension of the marketplace, and we demonstrated that GoTrendier’s user base could be bigger and bigger,” she says. With sights set on new markets like Chile and Peru, Cabido decided to move forward and close the round.
Poshmark, which benefits from indirect and same-side network effects, has raised $153 million to date from investors like Temasek Holdings, GGV and Menlo Ventures. Just like GoTrendier, Poshmark’s Series A was also a $3.5 million round.
Who’s to say that that amount of capital can’t boost a network effects growth model in Latin America too? The users are certainly waiting.
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Mobile gaming is having a moment, and Apple has the reins
It’s moved beyond tradition and into the realm of meme that Apple manages to dominate the news cycle around major industry events, all while not actually participating in said events. CES rolls around and every story is about HomeKit or its competitors; another tech giant has a conference and the news is that Apple updated some random subsystem of its ever-larger ecosystem of devices and software .
This is, undoubtedly, planned by Apple in many instances. And why not? Why shouldn’t it own the cycle when it can — it’s only strategically sound.
This week, the 2018 Game Developers Conference is going on and there’s a bunch of news coverage about various aspects of the show. There are all of the pre-written embargo bits about big titles and high-profile indies, there are the trend pieces and, of course, there’s the traditional ennui-laden “who is this event even for” post that accompanies any industry event that achieves critical mass.
But the absolute biggest story of the event wasn’t even at the event. It was the launch of Fortnite and, shortly thereafter, PlayerUnknown’s Battlegrounds on mobile devices. Specifically, both were launched on iOS, and PUBG hit Android simultaneously.
The launch of Fortnite, especially, resonates across the larger gaming spectrum in several unique ways. It’s the full and complete game as present on consoles, it’s iOS-first and it supports cross-platform play with console and PC players.
This has, essentially, never happened before. There have been stabs at one or more of those conditions on experimental levels, but it really marks a watershed in the games industry that could serve to change the psychology around the platform discussion in major ways. 
For one, though the shape of GDC has changed over the years as it relates to mobile gaming, it’s only recently that the conference has become dominated by indie titles that are mobile centric. The big players and triple-A console titles still take up a lot of air, but the long tail is very long and mobile is not synonymous with “casual gamers” as it once was.
“I remember the GDC before we launched Monument Valley,” says Dan Gray of Monument Valley 2 studio ustwo. “We were fortunate enough that Unity offered us a place on their stand. Nobody had heard of us or our game and we were begging journalists to come say hello, it’s crazy how things have changed in four years. We’ve now got three speakers at the conference this year, people stop you in the street (within a two-block radius) and we’re asked to be part of interviews like this about the future of mobile.”
Zach Gage, the creator of SpellTower, and my wife’s favorite game of all time, Flipflop Solitaire, says that things feel like they have calmed down a bit. “It seems like that might be boring, but actually I think it’s quite exciting, because a consequence of it is that playing games has become just a normal thing that everyone does… which frankly, is wild. Games have never had the cultural reach that they do now, and it’s largely because of the App Store and these magical devices that are in everyone’s pockets.”
Alto’s Odyssey is the followup to Snowman’s 2015 endless boarder Alto’s Adventure. If you look at these two titles, three years apart, you can see the encapsulation of the growth and maturity of gaming on iOS. The original game was fun, but the newer title is beyond fun and into a realm where you can see the form being elevated into art. And it’s happening blazingly fast.
“There’s a real and continually growing sense that mobile is a platform to launch compelling, artful experiences,” says Snowman’s Ryan Cash. “This has always been the sentiment among the really amazing community of developers we’ve been lucky enough to meet. What’s most exciting to me, now, though, is hearing this acknowledged by representatives of major console platforms. Having conversations with people about their favorite games from the past year, and seeing that many of them are titles tailor-made for mobile platforms, is really gratifying. I definitely don’t want to paint the picture that mobile gaming has ever been some sort of pariah, but there’s a definite sense that more people are realizing how unique an experience it is to play games on these deeply personal devices.”
Mobile gaming as a whole has fought since the beginning against the depiction that it was for wasting time only, not making “true art,” which was reserved for consoles or dedicated gaming platforms. Aside from the “casual” versus “hardcore” debate, which is more about mechanics, there was a general stigma that mobile gaming was a sidecar bet to the main functions of these devices, and that their depth would always reflect that. But the narratives and themes being tackled on the platform beyond just clever mechanics are really incredible.
Playing Monument Valley 2 together with my daughter really just blew my doors off, and I think it changed a lot of people’s minds in this regard. The interplay between the characters and environment and a surprisingly emotional undercurrent for a puzzle game made it a breakout that was also a breakthrough of sorts.
“There’s so many things about games that are so awesome that the average person on the street doesn’t even know about,” says Gray. “As small developers right now we have the chance to make somebody feel a range of emotions about a video game for the first time, it’s not often you’re in the right place at the right time for this and to do it with the most personal device that sits in your pocket is the perfect opportunity.”
The fact that so many of the highest-profile titles are launching on iOS first is a constant source of consternation for Android users, but it’s largely a function of addressable audience.
I spoke to Apple VP Greg Joswiak about Apple’s place in the industry. “Gaming has always been one of the most popular categories on the App Store,” he says. A recent relaunch of the App Store put gaming into its own section and introduced a Today tab that tells stories about the games and about their developers.
That redesign, he says, has been effective. “Traffic to the App Store is up significantly, and with higher traffic, of course, comes higher sales.”
“One thing I think smaller developers appreciate from this is the ability to show the people behind the games,” says ustwo’s Gray about the new gaming and Today sections in the App Store. “Previously customers would just see an icon and assume a corporation of 200 made the game, but now it’s great we can show this really is a labor of love for a small group of people who’re trying to make something special. Hopefully this leads to players seeing the value in paying up front for games in the future once they can see the craft that goes into something.”
Snowman’s Cash agrees. “It’s often hard to communicate the why behind the games you’re making — not just what your game is and does, but how much went into making it, and what it could mean to your players. The stories that now sit on the Today tab are a really exciting way to do this; as an example, when Alto’s Odyssey released for pre-order, we saw a really positive player response to the discussion of the game’s development. I think the variety that the new App Store encourages as well, through rotational stories and regularly refreshed sections, infuses a sense of variety that’s great for both players and developers. There’s a real sense I’m hearing that this setup is equipped to help apps and games surface, and stayed surfaced, in a longer term and more sustainable way.”
In addition, there are some technical advantages that keep Apple ahead of Android in this arena. Plenty of Android devices are very performant and capable in individual ways, but Apple has a deep holistic grasp of its hardware that allows it to push platform advantages in introducing new frameworks like ARKit. Google’s efforts in the area with ARCore are just getting started with the first batch of 1.0 apps coming online now, but Google will always be hamstrung by the platform fragmentation that forces developers to target a huge array of possible software and hardware limitations that their apps and games will run up against.
This makes shipping technically ambitious projects like Fortnite on Android as well as iOS a daunting task. “There’s a very wide range of Android devices that we want to support,” Epic Games’ Nick Chester told Forbes. “We want to make sure Android players have a great experience, so we’re taking more time to get it right.“
That wide range of devices includes an insane differential in GPU capability, processing power, Android version and update status.
“We bring a very homogenous customer base to developers where 90 percent of [devices] are on the current versions of iOS,” says Joswiak. Apple’s customers embrace those changes and updates quickly, he says, and this allows developers to target new features and the full capabilities of the devices more quickly.
Ryan Cash sees these launches on iOS of “full games” as they exist elsewhere as a touchstone of sorts that could legitimize the idea of mobile as a parity platform.
“We have a few die-hard Fortnite players on the team, and the mobile version has them extremely excited,” says Cash. “I think more than the completeness of these games (which is in and of itself a technical feat worth celebrating!), things like Epic’s dedication to cross-platform play are massive. Creating these linked ecosystems where players who prefer gaming on their iPhones can enjoy huge cultural touchstone titles like Fortnite alongside console players is massive. That brings us one step closer to an industry attitude which focuses more on accessibility, and less on siloing off experiences and separating them into tiers of perceived quality.”
“I think what is happening is people are starting to recognize that iOS devices are everywhere, and they are the primary computers of many people,” says Zach Gage. “When people watch a game on Twitch, they take their iPhone out of their pocket and download it. Not because they want to know if there’s a mobile version, but because they just want the game. It’s natural to assume that these games available for a computer or a PlayStation, and it’s now natural to assume that it would be available for your phone.”
Ustwo’s Gray says that it’s great that the big games are transitioning, but also cautions that there needs to be a sustainable environment for mid-priced games on iOS that specifically use the new capabilities of these devices.
“It’s great that such huge games are transitioning this way, but for me I’d really like to see more $30+ titles designed and developed specifically for iPhone and iPad as new IP, really taking advantage of how these devices are used,” he says. “It’s definitely going to benefit the App Store as a whole, but It does need to be acknowledged, however, that the way players interact with console/PC platforms and mobile are inherently different and should be designed accordingly. Session lengths and the interaction vocabulary of players are two of the main things to consider, but if a game manages to somehow satisfy the benefits of all those platforms then great, but I think it’s hard.”
Apple may not be an official sponsor of GDC, but it is hosting two sessions at the show, including an introduction to Metal 2, its rendering pipeline, and ARKit, its hope for the future of gaming on mobile. This presence is exciting for a number of reasons, as it shows a greater willingness by Apple to engage the community that has grown around its platforms, but also that the industry is becoming truly integrated, with mobile taking its rightful place alongside console and portable gaming as a viable target for the industry’s most capable and interesting talent.
“They’re bringing the current generation of console games to iOS,” Joswiak says, of launches like Fortnite and PUBG, and notes that he believes we’re at a tipping point when it comes to mobile gaming, because mobile platforms like the iPhone and iOS offer completely unique combinations of hardware and software features that are iterated on quickly.
“Every year we are able to amp up the tech that we bring to developers,” he says, comparing it to the 4-5 year cycle in console gaming hardware. “Before the industry knew it, we were blowing people away [with the tech]. The full gameplay of these titles has woken a lot of people up.”
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