The UpStream

FTC to look into legality of videogame loot boxes

posted Friday Nov 30, 2018 by Scott Ertz

FTC to look into legality of videogame loot boxes

Over the last year or so, the topic of loot boxes has become a focal point of countries around the world. This controversial practice involves a game either giving or selling players a box which represents a number of unknown items. Loot boxes have never been particularly popular with gamers, as most people want to know what they are buying unless there is an incentive for not knowing (grab bags in retail, for example).

Last year, EA took the concept up a notch with Star Wars: Battlefront II, which was met with anger from gamers. In time, the company admitted defeat, but left the door open to return the process in the future. The problem with the game was that purchasing loot boxes was almost required to advance through the game. In fact, the game would require 4,500 hours of gameplay (roughly 6 months) or $2,100 to complete. Neither of these options was particularly likely.

The US Federal Trade Commission has decided to look into the legality of loot boxes. In particular, they are worried about the relationship between loot boxes and gambling. Senator Maggie Hassan said in a hearing,

So given the seriousness of this issue, I think it is in fact time for the FTC to investigate these mechanisms to ensure that children are being adequately protected and to educate parents about potential addiction or other negative impacts of these games.

Loot boxes definitely have a lot of similarities to gambling, especially when they are purchased versus rewarded. You spend money and receive an unknown collection of items with an unpredictable combined value. For example, look at Overwatch. A loot box could potentially contain 4 sprays (stencils), icons, or voice lines: all of which are low value. It could also contain a costume or costume piece, or potentially all costumes and costume pieces, all of which are worth far more than the previous collection. The rush that comes with the potential of what you could get is very similar to the rush you get when pulling the handle on a slot machine.

The investigation process is in the very early stages, as the US Senate Commerce, Science, and Transportation subcommittee has only just asked the FTC to look into the process. If their findings are anywhere similar to those of other countries, regulations over the process are likely to follow.

Apple is hoping to prevent customers from suing using old ruling

posted Friday Nov 30, 2018 by Scott Ertz

Apple is hoping to prevent customers from suing using old ruling

What do Apple and concrete blocks have in common? The Supreme Court has been asked to answer that exact question. In the 1970s, a group of concrete block manufacturers got together to regulate the price they all charged for their product. This guaranteed that the price of the product would be higher than if they competed against one another. The State of Illinois sued, claiming that the inflated costs of blocks would increase the price of construction projects for the state.

The case made it to the US Supreme Court, who ruled that the state could not sue for damages because damages could not be proven. The Court said that it would be impossible for any court to unravel the cost distribution from supplier to sub-contractor, sub-contractor to general contractor, general contractor to state with any meaningful way. As such, they ruled that only the direct customer of the company could sue for damages from anti-trust.

Now, how does this apply to Apple? The company is trying to use this ruling to prevent consumers from suing over anti-trust issues. Specifically, a class-action lawsuit filed in 2011, claims that Apple is using its monopoly position as the exclusive app store provider for iOS to gouge consumers on price. Apple has argued that they do not set the price for the products and provide distribution as a service to app developers, so the app developers are their customer, not the consumer.

While Apple claims that their App Store is a service for developers, and is more like being the owner of a mall rather than a store (despite its name), the Justices did not seem to buy into the argument. Justice Sonia Sotomayor said,

The first sale is from Apple to the customer. It's the customer who pays the 30 percent.

This ruling has the potential to have major repercussions throughout the industry, as legally defining who the customer of an app distribution platform is, could change the way Apple, Google, Microsoft, Amazon, and more, treat their consumers. If consumers are not customers, these companies could increase their fee to developers because they can retain a monopoly. If consumers are customers, and the lawsuit can continue, we might see alternate distribution methods appear on Apple devices.

Logitech planning to expand their product line again with Plantronics

posted Saturday Nov 24, 2018 by Scott Ertz

Logitech planning to expand their product line again with Plantronics

It was only a few months ago that popular computer accessory manufacturer Logitech announced the purchase of Blue Microphones. This once beloved brand lost some of its brand loyalty after designed Skipper Wise left the company, but has remained popular among YouTubers and game streamers. When paired with Logitech's keyboards, mice, and webcams, the company now has everything it needs to produce a full streaming package.

According to a report from Reuters, Logitech may be looking to expand its offerings with the purchase of Plantronics. Plantronics is best known for their headsets, including wired, Bluetooth, and even gaming. While Logitech makes gaming headsets, it is not really the proc=ducts that they are best known for. They purchased gaming headset manufacturer Astro to help augment their internal offerings. Adding the expertise of Plantronics, in both microphone quality and in noise cancelation, Logitech is poised to make a big play for the growing streaming market against current leader Razer.

If this report is accurate, the purchase will be the largest ever for Logitech, coming in at $2.2 billion. While that price may sound like a lot, it is actually a bit of a steal. Earlier this year, Plantronics purchased commercial phone and teleconferencing manufacturer Polycom for $2 billion. That means that the indirect price of the Plantronics purchase is only $200 million, just about the price they paid for Blue Microphones ($117 million) and Astro ($85 million) together.

Depending on what their intentions truly are with Plantronics, there is the possibility that there are divisions that will need to be spun off, or made to function independently. While it seems that the majority of their purchases have been to strengthen their gaming and streaming prowess, the purchase of Plantronics brings with it a number of commercial products. In addition to Polycom, Plantronics is still the largest manufacturer of phone headsets for call centers and offices. However, when combined with Logitech's own c920 webcams, there could be a strong play for the office, as well.

China unveils first AI reporter and, while creepy, it is not AI

posted Saturday Nov 17, 2018 by Scott Ertz

China unveils first AI reporter and, while creepy, it is not AI

Last week, China unveiled what is, on the surface, a pretty impressive achievement: an AI reporter for their state-run television news. This virtual anchorman was developed by Xinhua and the Chinese search engine, Sogou, as a way to create a 24/7 face for the news, that never gets tired and is always there. According to Qiu Hao, the name of the digital host who is a representation of a real anchor for the network,

Not only can I accompany you 24 hours a day, 365 days a year. I can be endlessly copied and present at different scenes to bring you the news.

To prove that this is true, the company showed off a second virtual representation of a real network anchor, who presents in English. He added,

The development of the media industry calls for continuous innovation and deep integration with the international advanced technologies... I look forward to bringing you brand new news experiences.

The biggest problem with this pitch is the claim the company is making: the world's first AI anchor. The anchor, as stated in his own voice, is not AI. In fact, he reads from a script written by humans no different from any other tv news anchor on any network. In fact, the only place that AI played any role in the software is using a machine learning algorithm to analyze video of the two humans in question to build a model of behaviors, mannerisms, and speech patterns.

While machine learning is a branch of AI, the anchor himself is not an AI. Instead, it is built on top of an AI-powered rendering engine. Not quite the same thing. Now, if the anchor is eventually able to scan the internet, pick topics and write a script, then I'll be impressed. Until then, I think it's probably cheaper and less creepy to have a real person host your television news program. Unless you're trying to present false information with a straight face, but that's a different topic (hopefully).

Facebook hired firm to silence its critics, Zuckerberg says he did not know

posted Saturday Nov 17, 2018 by Scott Ertz

Facebook hired firm to silence its critics, Zuckerberg says he did not know

The past couple of years have been difficult for Facebook. With controversy after controversy, the largest being Cambridge Analytica, it sure seems that the company cannot seem to do anything right. As such, trust in their brand is at an all-time low, both with consumers and with legislators.

In an attempt to raise its public perception, the company hired a PR firm called Definers Public Affairs. While the relationship started out innocent enough, it grew into something less than acceptable. The firm is known for political counterintelligence, and they brought that expertise to Facebook. In the days leading up to Sheryl Sandberg testifying before Congress, Definers researched all of the financial and technological ties that the Senators had to the topic at hand. In particular, they found campaign donations from Facebook and its employees, as well as any technology used to track visitors to their own websites. This was passed out to reporters in an attempt to undermine the proceedings and establish them as hypocrites. This was while, publicly, the company was promising transparency and cooperation with the committee. Responding to the behavior, Senator Mark Warner of Virginia, said,

At the same time that Facebook was publicly professing their desire to work with the committee to address these issues, they were paying a political opposition research firm to privately attempt to undermine that same committee's credibility. It's very concerning.

The company also set up false websites with the intention to bring attention to non-governmental critics. In particular, they went after George Soros, the founder and often secret funder of various ultra-left organizations. They tried to get anti-Soros people, conservatives in particular, to go against Facebook protests by claiming he was funding them, though his organization seems to have little to nothing to do with it.

After The New York Times detailed the relationship, CEO Mark Zuckerberg cut ties with the company claiming,

I understand that a lot of D.C.-type firms might do this kind of work. When I learned about it I decided that we don't want to be doing it.

Obviously, a company this integral to Facebook's existence and intimately tied up with both Zuckerberg's and Sandberg's appearances before Congress is unlikely to go unnoticed by the CEO himself. However, it is good practice to claim no knowledge when the legal ramifications come to light.

A collection of Senators has begun an investigation into the relationship, in particular looking at the campaign finance issues it raises. A letter from Senators Amy Klobuchar, Mark Warner, Chris Coons, and Richard Blumenthal, says in part,

We are gravely concerned by recent reports indicating that your company used contractors to retaliate against or spread intentionally inflammatory information about your critics. In addition, the staggering amount of data that Facebook has collected on both its users and people who have not subscribed to or consented to use of the platform, raises concern that the company could improperly or illegally use its vast financial and data resources against government officials and critics seeking to protect the public and our democracy.

Being in the crosshairs of Congress for more than privacy concerns, but instead for potentially illegal activity, does not serve Facebook well. It could, however, serve the US public well, as any illegal campaign activities could reveal that Facebook themselves were involved in election tampering, suggesting that their knowledge in 2016 could have been higher than previously believed.

PlayStation is the first of the Big Three to abandon E3

posted Saturday Nov 17, 2018 by Scott Ertz

PlayStation is the first of the Big Three to abandon E3

It has long been known that E3 is collapsing in on itself. Despite the fact the conference was only known because of its rather inclusive badging system, the hosts decided to close the rules up, allowing only those with a high profile in the industry to attend. This meant that fans could no longer go, beginning the downward decline of the show. This, combined with their complete lack of understanding around new media, led to the big companies within the industry to get scared.

Activision took a year off from the official show but rented a church nearby to hold an unofficial press conference. Nintendo took some time off from having on-site press conferences but didn't exclude themselves from the show floor. In 2016, the disinterest in the show gained some steam, with both EA and Activision deciding to skip the event. EA hosted an open event next door, while Activision showed some gameplay with PlayStation, but had no official floor presence. Disney Interactive and Wargaming followed behind, announcing they were exiting the show entirely.

While Activision, EA, Disney, and Wargaming being absent left a hole in the floor, 2019 is going to leave an even larger hole. Sony has announced that they will have absolutely no presence at or during E3 2019. This means no presence on the floor, no PlayStation press conference, and no PlayStation Experience event. Sony explained their reasoning in a statement,

As the industry evolves, Sony Interactive Entertainment continues to look for inventive opportunities to engage the community. PlayStation fans mean the world to us and we always want to innovate, think differently and experiment with new ways to delight gamers. As a result, we have decided not to participate in E3 in 2019. We are exploring new and familiar ways to engage our community in 2019 and can't wait to share our plans with you.

This feels completely different from Microsoft pulling out of CES, where they said that the timing of the event didn't line up with their product development cycle. In this case, Sony is saying that they aren't nearly as interested in the gaming press seeing their stuff as they are about engaging directly with the gaming community as a whole. This means that we can expect a bigger, more relevant PlayStation Experience, or something with a new name, to happen in more places, at a time unrelated to the former industry-leading event.

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