August 16, 2022
Illustration: Christopher T. Fong/Protocol
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Tuesday, we’re taking a look at mobile ad giant AppLovin’s failed acquisition of game engine maker Unity, EA’s latest response to loot box backlash and the furor over a last-minute health and safety change to TwitchCon.
For game engine maker Unity, this summer has been a roller coaster. Coming off an acquisition and growth-heavy 2021 in which the company shelled out roughly $2 billion to buy Parsec and VFX studio Weta Digital, among others, the pandemic-era gaming boom was starting to fade and Unity’s business began to look shakier in the face of external pressures.
Then in the span of two months, Unity announced layoffs, revealed its biggest ever acquisition of mobile ad firm ironSource for $4.4 billion, landed in hot water over its CEO calling indie game developers “fucking idiots” and then faced down a $17.5 billion acquisition offer from AppLovin, an ironSource competitor that thought it had a more attractive deal.
Unity rejected the offer yesterday morning, putting a quiet end to a tumultuous news cycle for the software maker. The AppLovin deal, it seems, was too bitter a pill to swallow for Unity’s board of directors.
AppLovin is now in a tough spot. The company is one of a handful of mobile app growth platforms that sprung up in Apple’s App Store and Google Play during the rise of smartphones over the last decade.
Unity’s future is increasingly focused on mobile. Though the company is often pitted against Fortnite maker Epic Games because of the latter’s Unreal Engine platform, Unity’s business — and a future toward profitability — depends on mobile.
Ultimately, Unity wanted more control over its destiny than AppLovin was willing to give. With ironSource, Unity gets to stay in the driver's seat, while AppLovin is left with an unrequited offer and two fewer allies in the mobile industry it can turn to during an uncertain moment for mobile.
— Nick Statt
How cybercrime is going small time: Cybercrime is often thought of on a relatively large scale. Massive breaches lead to painful financial losses, bankrupting companies and causing untold embarrassment, splashed across the front pages of news websites worldwide.
“The worst part is that people are buying real estate in these places [metaverse]. That’s just the dumbest shit ever. The dumbest, dumbest. Did I say it was dumb? No that’s not strong enough — super, meta, immaculately dumb.” — Investor Mark Cuban didn’t mince words when discussing virtual real estate speculation on an episode of Altcoin Daily, though Cuban is now dabbling in NFTs and invested in BAYC parent company Yuga Labs."We wholeheartedly believe that Ultimate Team and FUT Packs, which have been part of the game for more than a decade, are a part of FIFA that players love — fans love that the game reflects the real-world excitement and strategy of building and managing a squad. Giving players the choice to spend if they want to is fair.” — Electronic Arts responded to Eurogamer over its continued use of loot boxes in the latest version of FIFA, due out next month. The U.K. government recently concluded it would not regulate the practice.
Digital media turns to mobile gaming for marketing. A report last week from Marketing Brew shed light on a new form of paid promotion for media publications: in-game currency ads nested inside the hugely popular endless runner mobile game Subway Surfers.
HBO Max lays off 70. The streaming service is restructuring following the merger with Discovery. 14% of staffers are affected, and apparently HBO Max is giving up on kids content.
Bungie’s war on cheaters is getting messier. The Destiny developer was named alongside Steam owner Valve in subpoenas from cheat distributor AimJunkies, which is trying to counter Bungie’s recent legal offensive on the grounds its software is in fact legal.
Google’s cloud gaming experiences continue. Despite a rather quiet year from Stadia, Google is still continuing to tinker with new features, including the option to launch some cloud games right from Google Search. The feature, apparently still in the test phase, works even with competing service providers.
The streaming wars are over. Or at least the days of spending just to grow one’s subscriber base at all costs, if recent news from Disney, Netflix and Warner Bros. Discovery are any indication.
Weta Workshop returns to Middle-earth. The New Zealand company famous for its work on “The Lord of the Rings” trilogy (not to be confused with the similar but separate Weta Digital now owned by Unity) is working with Take-Two Interactive’s Private Division label to make a new Middle-earth game.
Hogwarts Legacy says sayonara to 2022. This year has been full of game delays, and Warner Bros.’ Hogwarts Legacy was added to the list last week. The open-world Harry Potter title will now launch in February.Snapchat tops 1 million paying subscribers. Talk about dedication: More than a million people pay Snapchat $3.99 a month for the privilege to beta-test its features.
Twitch had high hopes for the return of TwitchCon, the company’s gathering of streamers and industry professionals who work in and orbit the largely gaming-dominated platform. But a last-minute change to the event’s health and safety guidelines has divided the Twitch community along lines familiar to anyone who’s been trying to navigate live events or travel throughout the pandemic.
Twitch originally said it would not require masks or proof of vaccination, leading to criticism that organizers weren’t taking the ongoing threat of COVID-19 seriously enough.
That didn’t sit well with some creators, most prominently Nicholas “Nickmercs” Kolcheff, a popular streamer signed to gaming lifestyle and esports company Faze Clan.
As is the case in so many other parts of pandemic life, where one falls in this debate largely depends on personal risk tolerance and your outlook on civic responsibility. But Twitch isn’t budging. With TwitchCon less than two months away, the masks are staying on.
— Nick Statt
How cybercrime is going small time: People have been swindled since before man created monetary systems. These aren’t new crimes; just new ways to commit them. But as cybercrime increasingly goes small-time, those on the front lines will need new and more effective ways to fight it.
Thoughts, questions, tips? Send them to email@example.com. Enjoy your day, see you Thursday.