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Mobile Publisher NetEase Moves West – PAX Aus 2015

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Beautiful Dream NetEase PAX Aus

With the popularity of mobile games, it’s often surprising how some of the biggest players in the mobile space remain largely anonymous to consumers. Of course, those that fall into the spotlight are usually there for bad reasons – take King, for example. But today, I’d like to shine that spotlight on NetEase, the world’s fifth largest mobile publisher. NetEease has spent the last decade or so working as a games publisher in China, most notably as the Chinese publisher of all of Blizzard’s games. They’ve traditionally been an MMO-based company, but over the last couple of years they’ve moved into the mobile space. Now, they’re one of the heavyweights of the mobile world. I spoke with Jasmine Mayo, NetEase’s senior communications manager, and Jim Reilly, associate communications manager, at PAX Australia.

“About two years ago we started transitioning into mobile games,” Mayo says. “Within the last two years, we’ve become the fifth largest mobile publisher in the world… What’s really interesting about that is we’ve actually become the number five publisher by only publishing our games in China.”

The only games that NetEase had out in the west prior to 2015 were in simplified Chinese. But then the company started moving into the west and set up their first studio in the US. They released their first game in the west back in August – Speedy Ninja, an endless runner. A couple of weeks later, they had their next two games released. But these two games were made completely free, with no monetisation whatsoever, and are available now for iOS devices.

“We released Lunar Flowers and Beautiful Dream completely for free. So there’s no IP, no ads, no nothing,” Mayo says. “They were actually created by interns. We have a very robust intern program in China. They were interesting to put out.”

Lunar Flowers NetEease PAX Aus

Reilly walked me through both of these games. Lunar Flowers is a puzzle game about matching the patterns found in clues.

Beautiful Dream NetEease PAX Aus

Beautiful Dream is a colour matching game. Players need to colour the level correctly in order to proceed.

Mayo says that NetEase invests heavily in smaller studios and indie developers. “The NetEase Success Fund makes investments in companies that really want to retain the rights to and ownership of their games. We actually don’t publish those games, we don’t have any creative control over them, but what we do is really just like a short-term loan. It’s for things like marketing budgets. It’s for games that have already done all the creative parts and everything on their own, and they just need that little extra bump to get noticed.” The fund is focused entirely on start-up mobile developers.

As for the rest of NetEase’s games, they follow the free-to-play “freemium” model that so many gamers love to hate. “We know freemium gets a bad rap with gamers,” Mayo says. “I think there’s a way to do it, to be honest. I think when people see the types of game’s we’re releasing, that they’re not the typical freemium games, they’ll see that these are actually games for gamers. That’s actually the tag-line that we use in China… But the way that we approach our games is you don’t have to spend if you don’t want to. We’re definitely not pay-to-win. With these more core experiences, you can’t really set up the structure that way.”

Mayo says NetEase’s transition to western audiences involves far more than just localising games. She uses Eternal Arena, NetEase’s most recent game to launch in Australia, as an example. It’s a combination of a JRPG and MOBA game. “It’s based on one of our most successful games in China, called Battle To The West. We actually looked at the gameplay elements and took the engine and thought this could work for a western audience. We redid the user interface, the monetisation system, and the opening levels. We redid all the art and the storyline as well. It’s kind of like a bite-sized League Of Legends.

Eternal Arena NetEase PAX Aus 2015

Eternal Arena is a mobile MOBA with short, 2-3 minute matches

March Of Heroes was another game that NetEase had intended to release for western audiences. “We launched it in closed beta about a month ago, and it didn’t do well. So we pulled it, and the game team reworked it. They changed some elements and we’re going to put it into closed beta in another month or so.” March Of Heroes was one of the games NetEase decided to showcase at PAX Aus in order to try and gage people’s experiences on the show floor.

Mayo says that March Of Heroes, having been in development for at least a year, it may still never launch. “If people aren’t interested in it, it may not ever go to the next step.”

Mayo and Reilly acknowledge that there are those ‘hardcore’ gamers who have a strong disdain for mobile and freemium games. I asked them what they would say to try to turn those people around. “I see it as, it’s free, download it. If you don’t like it, delete it,” Mayo says. “It’s not like you’re buying a $60 box product where if you don’t like it, you can’t return it. It’s easy to just test them out and see.”

“Every game is different,” Reilly says. “The mobile industry is still very young. There’s still a lot of fine-tuning that’s going on. People are trying to figure out what works and doesn’t work. The idea of being a gamer has grown beyond the idea of console gaming. The sweet-spot will eventually be found.”

March Of Heroes NetEaae PAX Aus 2015

March Of Heroes is a strategy game. It’s still in beta testing.

“There’s thousands of games available,” Mayo says. “There’s so many options. If you hate one, that doesn’t mean you’ll hate them all. It’s like saying, I don’t like mobile games because I don’t like change. You see a lot of mobile games coming out that have PC-quality graphics and look really beautiful or have a more robust play system. I think people should just check it out. They might like it.”

Rhiannon likes video games and she likes writing, so she decided to combine them. As well as writing about video games, she also belts out the occasional science fiction or fantasy story, edits videos, and eats strawberry oreos. In that order.

Android

Pixel 8 Pro runs Google’s generative AI models

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Rick Osterloh, Google’s SVP of devices and services, says the Pixel 8 Pro will be the first hardware to run Google’s generative AI models.

At an event today, Osterloh said the Pixel 8 Pro’s custom-built Tensor G3 chip, which accelerates AI workloads, can run “distilled” versions of Google’s text- and image-generating models to power image editing and other apps.

Osterloh said, “We’ve worked closely with our research teams across Google to take advantage of their most advanced foundation models and distill them into a version efficient enough to run on our flagship Pixel.”

Google improved Magic Eraser, its photo-editing tool, to remove larger objects and people smudge-free using on-device models. Osterloh claims that this improved Magic Eraser creates new pixels to fill in shot gaps, producing a higher-quality image.

Osterloh says a new on-device model will “intelligently” sharpen and enhance photo details, improving zoom.

On-device processing benefits audio recording. The Pixel 8 Pro’s recording app will soon summarize meeting highlights.

Gboard will use a large language model on the Pixel 8 Pro to power smart replies. Osterloh claims that the upgraded Gboard will provide “higher-quality” reply suggestions and better conversational awareness.

Osterloh said an update in December will add on-device generative AI features except for Magic Eraser, which appears on the Pixel 8 Pro at launch.

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Telegram launches a global self-custodial crypto wallet, excluding the US

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Telegram, with 800 million monthly users, is launching a self-custodial crypto wallet. The move will solidify its presence in the vibrant crypto community that has grown from its chat platform and may attract more people to crypto.

Telegram and TON Foundation announced TON Space, a self-custodial wallet, on Wednesday at Singapore’s Token2049 crypto conference, which draws over 10,000 attendees.

Telegram has a complicated blockchain relationship. After the SEC sued Telegram over a massive initial coin offering, the chat app abandoned its Telegram Open Network (TON) blockchain project in 2020. The Open Network Foundation (TON Foundation), founded by open-source developers and blockchain enthusiasts, supports the development of The Open Network (TON), the blockchain powering a growing number of Telegram applications, including the wallet.

The Open Platform (TOP) and TOP Labs, a venture-building division, created the TON-based wallet.

TON Space will be available to Telegram users worldwide without wallet registration in November. The U.S., which has cracked down on the crypto industry and promoted many crypto apps to geofence users, is currently excluded from the feature.

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Google’s massive antitrust trial begins, with bigger implications

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The Justice Department’s landmark antitrust case against Google began in court today, setting off a months-long trial that could upend the tech world.

At issue is Google’s search business. The Justice Department claims that Google has violated antitrust laws to maintain its search title, but the company claims that it does so by providing a superior product.

The Justice Department sued Google for civil antitrust in late 2020 after a year-long investigation.

“If the government does not enforce the antitrust laws to enable competition, we will lose the next wave of innovation,” said then-Deputy Attorney General Jeffrey A. Rosen. “If that happens, Americans may never see the ‘next Google.’”

A large coalition of state attorneys general filed their own parallel suit against Google, but Judge Amit Mehta ruled that the states did not meet the bar to go to trial with their search ranking complaints.

The search business case against Google is separate from a federal antitrust lawsuit filed earlier this year. The Justice Department claims Google used “anticompetitive, exclusionary, and unlawful means” to neutralize threats to its digital advertising empire in that lawsuit.

Justice Department attorney Kenneth Dintzer set the stakes for the first major tech antitrust trial since Microsoft’s late 1990s reckoning on Tuesday. “This case is about the future of the internet, and whether Google’s search engine will ever face meaningful competition,” Dintzer said.

Beginning the trial, the government focused on Google’s deals with phone makers, most notably Apple, that give its search product top billing on new devices. Dintzer claimed that Google maintains and grows its search engine dominance by paying $10 billion annually for those arrangements.

“This feedback loop, this wheel, has been turning for more than 12 years,” he said. “And it always benefits Google.”

Google lawyer John Schmidtlein refuted that claim, hinting at the company’s legal defense in the coming weeks.

“Users today have more search options and more ways to access information online than ever before,” Schmidtlein said. Google will argue that it competes with Amazon, Expedia, and DoorDash, as well as Microsoft’s Bing search engine.

Google planted the seeds for this defense. According to internal research, Google Senior Vice President Prabhakar Raghavan said last year that more young people are using TikTok to search for information than Google Search.

In our studies, almost 40% of young people don’t use Google Maps or Search to find lunch, Raghavan said. “They use TikTok or Instagram.”

Google will be decided by U.S. District Judge Amit Mehta in the coming months. We’re far from that decision, but the company could be fined heavily or ordered to sell parts of its business.

The trial could change Google’s digital empire if the Justice Department wins. Other tech companies that dominated online markets in the last decade are also watching. If the government fails to hold an iconic Silicon Valley giant accountable, big tech will likely continue its aggressive growth trajectory.

If the Justice Department succeeds, the next decade could be different. The industry-wide reckoning could cripple incumbents and allow upstarts to define the next era of the internet, wresting the future from tech titans.

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