Do we need AR neutrality regulation?

I wrote a story this week on the strange phenomenon of startups selling virtual properties tied to real-world addresses. I was inspired by playing Upland, a blockchain-powered game that’s a bit like Monopoly, but with maps of real cities used in lieu of the traditional game board. Turns out that one of the land parcels sold to Upland players shared an address with my own home.

While reporting the story, I learned that Upland eventually wants to expand into AR and also offer third-party developers a way to leverage its geospatial data. And it’s not alone: Spotland is already selling AR landmarkers to its users, promising them a share of the revenue it may one day make by placing AR ads in those locations, and the Geo Web is looking to become a geospatial data provider as well.

But just like net neutrality was supposed to guarantee an equal playing field on the internet by preventing companies from blocking competing services on their networks, AR may need some regulation to make sure that future glasses aren’t dominated by one company’s AR layers, wrote designer and near-futurist Sanjiv Sirpal. He argues that there’s a need for what he calls “reality neutrality.”

• “If net neutrality was fought in the browser, then the reality neutrality wars will be fought over the lens,” Sirpal wrote.
• Reality neutrality may sound like a far-out concept, but it may become a real issue sooner than you might think.
• Apple, Google and Meta are all building their own AR glasses, and it’s easy to imagine that these devices will primarily rely on each company’s geospatial data to decide what kind of information to show you when you look at a house or storefront.

One solution: equal access. Guaranteeing that startups can distribute their own apps and AR layers on these devices could help level the playing field. But that might not be enough on its own.

• Sirpal told me that regulation should come at what he called “layer 0”: the AR layer your device defaults to out of the box.
• Without that, choice might merely be a theoretical exercise, as past examples have shown. Sure, we all could use alternative search engines. But who really changes the default engine of their browser — especially if that browser is made by the same company as the search engine?
• It would even be in the public interest to make sure that some information is persistently shared across all layers. Think of it as the AR equivalent to an emergency broadcast system.
• “There are many 911 types of situations that could be published to that system,” Sirpal told me.

But what about property ownership? Beyond guaranteeing broad access to public service announcements and other information from official sources, regulating who gets to place landmarkers on privately owned land would be important.

• Finding that someone else owns a virtual version of your property is weird enough. Now imagine putting on AR glasses, and realizing that your neighbor placed a virtual billboard in your backyard, telling the world that you don’t mow your lawn?
• I asked Stanford Law School professor Mark Lemley whether regulators should step in to control AR landmarker sales, and he was hesitant. “My strong instinct in general in these areas is to say: It's not doing you any harm, [so] you ought to leave it alone.”
• There are some good arguments for a hands-off approach, especially when it comes to commercial properties. Today, anyone can write a bad Yelp review about a restaurant, or even set up a website to tell the world how much a company or brand sucks. Why not extend that same freedom of speech to AR?
• Still, people trading geospatial data for your property does feel pretty weird — and that alone could be enough for people to call for regulation.

“I share some of that kind of instinctual reaction of: Wait a minute, why is there someone living in my house? Even though I understand it's not true,” Lemley told me.

— Janko Roettgers

On the calendar

Crypto regulation: From buyer beware to federal oversight

Join Fintech reporter Benjamin Pimentel and an expert panel of speakers at 10 a.m. PT Feb. 9 as they explore the future of crypto regulation. RSVP here.

Nintendo is still in a league of its own

The Switch is officially Nintendo's bestselling home console ever, surpassing the original Wii with 103.5 million units sold over the last five years. The Switch reached this milestone faster than both the PlayStation 4 and the Wii. Not only that, but Nintendo's most recent financial quarter was its second-best on record.

This is yet more evidence that Nintendo exists in a world of its own creation, not restricted by the traditional console gaming business and capable of record-breaking milestones, thanks largely to its dedicated fan base and its unique approach to game development and distribution.

• While Microsoft and Sony are currently locked in a heated content war to try to grow their respective businesses, Nintendo is arguably at its most comfortable and secure position in a decade.
• It achieved this through its investments in first-party games, strong hardware sales and its refusal to compete in areas where it has known weaknesses, like cutting-edge graphics and big-budget game development.

Nintendo’s approach to gaming has turned its console into its biggest revenue driver and allowed it to reap more profits from its software library. This is at a time when competitors are either losing money on hardware or relying overwhelmingly on third-party software sales amid an ongoing chip shortage that continues to constrain supply.

• Over the past three months, Nintendo was able to ship roughly 10.7 million Switch consoles, while Sony shipped just under 4 million PlayStation 5 units.
• Like Sony, Nintendo is also lowering its forecast for Switch sales going forward, citing the chip shortage.
• Nintendo has also earned more than double Sony's PlayStation profits in the 2021 calendar year.

Nintendo is uninterested in competing as aggressively for third-party content, even after Microsoft announced its nearly $70 billion purchase of Activision Blizzard and Sony its $3.6 billion purchase of Destiny developer Bungie.

"Our brand was built upon products crafted with dedication by our employees, and having a large number of people who don’t possess Nintendo DNA in our group would not be a plus to the company,” President Shuntaro Furukawa said on an earnings call yesterday.

— Nick Statt

A MESSAGE FROM SAMBA TV

Samba TV operates the world’s largest independent source of first party connected TV data helping brands, agencies and content owners to plan, buy and measure all in one place. The State of Viewership report offers the industry’s most accurate insights into television viewing and advertising engagement. Download the report at www.samba.tv

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TGIF: How to spend your weekend

The NFT Ecosystem Is a Complete Disaster — Vice. There’s been plenty written about the current state of Web3. But none quite captures the sheer level of absurdity around the NFT market quite like Edward Ongweso Jr.’s new piece that chronicles the scams, security breaches and just outright fraud that’s running rampant in the digital art space.

How one company took over the NFT trade — The Verge. Russell Brandom published a deep dive this week on OpenSea, the leading NFT marketplace. It’s a great read to understand how one company found itself at the center of an apparent gold mine, and all the side effects of trafficking in unregulated online goods with ballooning price tags.

“Yellowjackets” — Showtime. I spent most of my TV watching this past week binging “Yellowjackets," the one-part-survival-horror and one-part-dark-comedy series from "Narcos" veterans Ashley Lyle and Bart Nickerson. It is of course an all-girl "Lord of the Flies," but with multiple timelines showing the events before, during and after a plane crash that strands a high school soccer team in the Canadian wilderness. It’s an uncanny blend of horrifying, absurd and funny all at once. You can watch Yellowjackets on Showtime.

“Ozark — Netflix. When I wasn’t watching "Yellowjackets," I was consuming the seven-episode part one of Ozark’s final season on Netflix. We’re back with the Byrd family’s attempts to extricate themselves from a deadly drug cartel’s clutches, all while they inevitably undermine each other’s best efforts in new and more ludicrous fashion. It doesn't feel like there’s a happy ending anywhere in sight here, but it’s still hard to not look on with excitement and horror as Jason Bateman and Laura Linney’s characters fall completely into the deep end.

Death’s Door: The gorgeous indie action-adventure game from developer Acid Nerve is a nice blend of The Legend of Zelda with some more modern artistic and gameplay influences, like the dioramic art of Ustwo’s Monument Valley and the challenging combat of roguelikes like Hades. The game was just added to Xbox Game Pass last month, making it the perfect opportunity to give it a try.

— Nick Statt

A MESSAGE FROM SAMBA TV

Samba TV operates the world’s largest independent source of first party connected TV data helping brands, agencies and content owners to plan, buy and measure all in one place. The State of Viewership report offers the industry’s most accurate insights into television viewing and advertising engagement. Download the report at www.samba.tv

Learn more