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When publishers are searching for the next big video game hit to replace a fading franchise, the easy short-cut is to acquire an already successful game and studio, a tactic Activision has successfully employed over and over again.
It doesn’t work for everyone though. Zynga tried to duplicate its success with FarmVille on Facebook by buying OMGPop and Draw Something, which proved to be a passing fad, while as Tim Bradshaw reports, Epic is taking an entirely different route as its Fortnite game passes its peak in popularity.
A spate of acquisitions in 2019 has seen the Tencent and KKR-backed company reinvest the huge profits generated by Fortnite into building out its own gaming platform, Unreal Engine. Purchases such as 3Lateral, Twinmotion and Quixel are helping Epic assemble a suite of low-cost tools for creating ultra-realistic digital characters and virtual worlds.
Unreal Engine was first released 20 years ago and is initially free to use but takes a 5 per cent royalty on revenues from any game built using its tools. Game engines such as Unreal and its main rival, San Francisco-based Unity Technologies, promise to bring the capabilities of Hollywood studios and big-budget games publishers to a much larger pool of creatives.
Epic’s approach is similar to another creative toolmaker Adobe, which has switched successfully to a subscription model in recent years for programs such as Photoshop. That means regular, recurring revenues and Epic will hope for a similar reliable income if its bets and royalties can be spread wider across the gaming community.
The Internet of (Six) Things
1. Hard cheese for France’s digital tax
The Trump administration is threatening 100 per cent tariffs on French goods including cheese, champagne and handbags after the US Trade Representative concluded that France’s Digital Services Tax discriminated against companies such as Amazon, Apple, Facebook and Google. French finance minister Bruno Le Maire called the Trump administration’s latest threat “unacceptable” and said the EU would retaliate with “a strong riposte”.
2. From Russia with leaks
As the UK election campaign enters its final 10 days, there has been fresh scrutiny of classified documents detailing UK-US trade talks that were used by the Labour party to claim the prime minister was putting the NHS “up for sale”. They were first leaked online in a way that mirrored a recent Russian disinformation campaign, according to analysis by US researchers. Meanwhile, the Conservative party has stepped up advertising on Facebook, launching 2,600 new ads in the space of just 24 hours.
3. Trump blocks Bloomberg
Donald Trump will not grant Bloomberg News reporters access to his campaign, accusing the media company of bias after its billionaire owner Michael Bloomberg entered the presidential race. Mr Bloomberg’s political aspirations have raised speculation about a possible buyout of his eponymous financial data giant. Elsewhere, Italy’s leading media group GEDI, which owns the left-leaning La Repubblica and centrist La Stampa national daily newspapers, has been bought out by John Elkann, scion of the Agnelli industrial dynasty and chairman of Fiat Chrysler.
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4. Sky to create new European production hub
The content arms race in the streaming wars also means building more studios. Comcast-owned Sky is to build a new studio complex in Elstree, north London, creating 2,000 jobs, as it battles to defend itself against the likes of Netflix and Amazon Prime. Expected to open in 2022, it will help Sky achieve its previous commitment to double spending on original programmes to more than £1bn a year by 2024. Lex looks today at how cinema chains like Cineworld are also being threatened by streaming.
5. Is the fintech bubble bursting?
Fintech is booming, right? Alphaville has a chart that suggests otherwise. It shows a rapid decline in the founding of fintech start-ups from 390 in 2015 to just 71 in 2018 and only 12 so far this year. It could be a sign of a maturing market, but a big problem for start-ups is that anything they can do, traditional banks can copy and throw more resources at.
6. Researchers build bionic neuron chip
The first silicon chip that claims to accurately reproduce the electrical properties of real brain cells has been unveiled by a UK research team. The first application will be an implant to treat heart failure, with the chip expected to stimulate the heart more efficiently than a conventional electronic pacemaker.
Tech tools — Minut smart home alarm
If you’re daunted by the prospect and cost of setting up a home alarm system with multiple sensors on doors and windows, along with cameras and cabling, the Minut could be a far easier solution. Launched in the UK today at £129, it has a Nest-like simplicity and, just as with that thermostat’s designer, there is an Apple connection here as well.
Nils Mattisson, Minut’s CEO and co-founder, worked in the Exploratory Design Group at Apple before starting Minut in 2014. It’s just one small battery-powered device that can be stuck on a ceiling with its sensors able to detect motion, noise, temperature and humidity. As well as sounding an alarm, it can send an alert to an app, while additional features include a night light and mould risk analysis.
