Nex's Active Arcade
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Three Apple veterans want to bring motion games to smart TVs

Protocol Entertainment

Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Thursday, we’ve got an exclusive first look at Nex and its plans to bring motion games to the TV screen. Also: New data suggests Netflix isn’t the only video subscription service struggling with slowing growth, and AI art is getting better by the day.

Nex wants to turn smart TVs into motion game consoles

Four years after being featured during an Apple keynote, Nex is looking to take motion games mainstream: The Bay Area-based startup is getting ready to unveil a number of games that use computer vision to let people control gameplay with their bodies at the Tokyo Game Show later this month. Think Kinect-like play, but with smartphones, iPads and laptop cameras.

Nex also plans to bring those games to smart TVs and streaming devices, and will show its own reference design hardware at IBC in Amsterdam this month. The goal of those efforts is to “transform the living room into a playground,” Nex co-founder and CEO David Lee told me during an exclusive conversation last week.

  • Nex was founded by three Apple engineers in 2017.
  • “The mission of the company is to reconnect humanity with the joy of movement by turning screen time into active play time,” Lee told me.
  • When Apple introduced the iPhone XS in 2018, the startup got invited on stage to demonstrate its HomeCourt app, which was designed to help basketball players improve their game.
  • During the pandemic, Nex saw HomeCourt downloads spike, with people using the app off the court for fun. That made the company realize there was a much broader market for motion games.

Nex soft-launched two more games in recent months, and it’s now getting ready to unveil additional titles in Tokyo. Lee demonstrated a few of them to me on a Zoom call — and even though I didn’t compete against him in person, I got the sense that these types of games can be a lot of fun.

  • Among the titles premiering at Tokyo Game Show is Starri, a rhythm motion game that’s kind of like Nex’s take on Beat Saber.
  • There’s also the already-available Party Fowl, a collection of motion minigames, including one where players control a helicopter by moving their hips like they’re using a hula hoop.
  • “You cannot play this game without a smile on your face,” Lee said after handily beating one of his co-workers during the Zoom demo.
  • Other titles to be shown in Tokyo include a cart racing game, a flight simulator and Active Arcade.
  • In addition to these games, Nex will also introduce an SDK for motion games, aptly called Motion Developer Kit, which is supposed to help outside developers build similar games.

Nex’s next big bet is the TV screen. The startup wants to help operators, TV-makers and others bring its games to the biggest screen in the house.

  • To do this, Nex has partnered with Arm and device-maker SEI Robotics to build its own reference design hardware — a small Android TV-based set-top box with integrated webcam that can be used to both stream videos and play Nex’s games.
  • Lee told me he’s had conversations with multiple manufacturers of smart TVs and set-top boxes about bringing its technology directly to their devices.
  • He wouldn’t go into detail about those conversations, but it’s worth noting that Nex’s funders include Samsung.
  • One of the companies that Lee could disclose is Comcast’s U.K. subsidiary Sky, which is looking to bring the games to its Sky Glass smart TV platform in the near future.

Lee also hinted at the possibility that Nex could sell its own hardware by comparing its reference design kit to Google’s Pixel phones, which are both a North Star for the Android hardware industry and an actual product. However, he acknowledged that the startup would never be able to compete with consumer electronics giants like Samsung, and painted the reference hardware more as a way to drive adoption of the technology.

“It’s the chicken-egg problem,” Lee said. On the one hand, people will want to play motion games on TV together, as opposed to crowding around a phone screen. On the other hand, TV-makers won’t support motion games, and the cameras and chips needed to run them, if there’s not enough to play. That’s why Nex is looking to push both hardware and software development simultaneously.

The good news: The tech is ready. When Nex started, its computer vision model alone was 500MB, and it only ran on top-of-the-line phones. Now, that technology is much more broadly available, and chips capable of running motion games could show up in smart TVs within the next two years. “We see the tipping point coming pretty soon,” Lee said.

— Janko Roettgers

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Tough times for subscription services

It’s not just Netflix: Sign-ups for video subscription services are slowing across the board, according to new data from subscriber-measurement company Antenna. “We have never before seen a slowdown like this one,” wrote Antenna co-founder Jonathan Carson in a blog post this week.

  • In Q2, Antenna observed a quarterly growth rate of just 1.2% across premium video subscription services monitored by the company.
  • That’s the slowest growth Antenna has observed over the past 22 quarters. Two quarters ago, the same services still grew 7.4%.
  • There’s some seasonality in those numbers, with people signing up for the fall TV season, and dropping services when they’re done with their favorite shows.
  • However, Q2 of 2021 was still a lot stronger, with services netting 9.1 million new subscribers; in Q2 of 2022, the same services saw net additions decline to just 2.5 million.
  • Worth noting: Antenna’s data is U.S.-only. Netflix in particular appears to have hit a ceiling in the U.S., which could explain at least part of the slow-down.
  • However, other services have seen a significant growth deceleration in the U.S. as well: Paramount+, Apple TV+ and Discovery+, which all still have a lot of room to grow, saw collective net additions of 7% in Q2, compared to 13% in the prior quarter.

All of this could signal a new era of slower streaming growth, which would come with new challenges for an industry still investing billions of dollars into programming. Or maybe it’s a blip, with Carson musing that it could be about “consumers taking a streaming breather after several years of torrid growth — and maybe tightening their household budgets in a world of financial uncertainty.” Either way, it will be interesting to see where those numbers move in the coming months.

— Janko Roettgers

Disclosure: Protocol is owned by Axel Springer, whose chairman and chief executive officer, Mathias Döpfner, is on the board of Netflix.

In other news

Netflix poaches Snap execs to lead its ad business. Snap’s chief business officer Jeremi Gorman and VP of ad sales Peter Naylor are heading to Netflix to launch the streaming service’s ad-supported plan next year.

The creator of Elden Ring gets a cash infusion. Tencent and Sony have become new minority investors in Elden Ring studio FromSoftware, with Tencent acquiring 16.3% and Sony acquiring 14% for a total of $262 million.

Snap is laying off 20%, pulling plug on key initiatives. The social media company is cutting more than 1,200 jobs, and ending minigames as well as original shows.

Facebook Gaming to shut down in October. The dedicated mobile app for Facebook’s Twitch competitor will close on Oct. 28, The company still intends to keep game streaming features available in the main Facebook app.

Sony Music has sued Triller for copyright infringement and breach of contract. The label alleges that Triller hasn’t paid any royalties since March.

NetEase acquires its first European studio. Chinese gaming giant NetEase has acquired Quantic Dream, the French studio behind Detroit: Become Human and Heavy Rain. Quantic Dream is currently developing a new Star Wars game.

Vestel plans to launch TiVo-powered smart TVs next year. The Turkish TV manufacturer will be the first to run Xperi’s new TiVo OS.

Samsung streams nearly 3 billion hours via TV Plus. The TV-maker’s free, ad-supported streaming channels saw viewership grow 100% over the past 12 months.

Get ready to binge on AI movies

One of my favorite pastimes on Twitter has been seeing the new and fun ways people are generating art with AI. First, everyone just fed Dall-E with random keywords. Then, folks came up with ways to turn ‘90s grunge lyrics into AI-generated album covers. Now, DALL-E can complete paintings beyond the canvas.

But my favorite experiment this week came from Fabian Stelzer, who had GTP-3 write summaries for nonexistent movies, and then fed those into Midjourney to create concept art. I for one would totally watch Elves of Manhattan, and at this pace, I expect it will be generated end-to-end by AI any day now.

— Janko Roettgers

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