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Netflix confirms move into video games as its growth slows

Netflix confirms move into video games as its growth slows

Netflix reported its worst slowdown in subscriber growth in eight years as people emerge from their pandemic cocoonsBy MICHAEL LIEDTKE AP Technology WriterJuly 20, 2021, 9:21 PM• 3 min readShare to FacebookShare to TwitterEmail this articleSAN RAMON, Calif. — Netflix reported its worst slowdown in subscriber growth in eight years as people emerged from their pandemic cocoons. But it has an answer to that: Video games.On Tuesday, the streaming giant announced plans to begin adding video games to its existing subscription plans at no extra cost. It didn’t release details except to note that it will initially focus on mobile games.The confirmation of the long-anticipated gaming expansion came in conjunction with the release of the latest Netflix earnings report.That financial breakdown showed the video service added 1.5 million subscribers during the April-June period. That’s slightly better than the modest increase that management forecast after the service stumbled to a sluggish start during the winter months, but still far below its growth rate in recent years.The 5.5 million subscribers that Netflix gained through the first six months of this year marks its weakest first-half performance since 2013 — a time when the company was still rolling out more original programming instead of licensing old TV series and movies.Now Netflix is taking another leap by offering video games. The Los Gatos, California, company telegraphed the move last week when it disclosed the hiring of a veteran video game executive, Mike Verdu, to explore potential opportunities in another field of entertainment.“We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV,” Netflix wrote in a Tuesday letter to shareholders.Despite this year’s growth slowdown, Netflix remains by far the world’s biggest streaming service in an increasingly competitive field that includes Walt Disney Co., HBO, Amazon and Apple. Netflix finished June with 209 million worldwide subscribers.Netflix’s heft also has produced steady profits. The company earned $1.35 billion, or $2.97 per share, nearly doubling from the same time last year. Revenue rose by 19% from last year to 47.3 billion.But the lackluster first-half numbers are a dramatic reversal from last year, when government-imposed lockdowns across the world thrust people into binge-watching frenzies while corralled at home. Already the world’s largest video streaming service when the pandemic began in March 2020, Netflix picked up 26 million subscribers during the first half of last year. .While no one expected Netflix to sustain that breakneck pace, the drop off in subscriber growth this year has been more severe than anticipated. Netflix shares have fallen by about 10% from their peak of $593.29 six months ago. The shares edged up slightly in extended trading after Tuesday’s news came out.

Video games coming to Netflix? Latest hiring offers a clue

Video games coming to Netflix? Latest hiring offers a clue

Netflix has hired veteran video game executive Mike Verdu, signaling the video streaming service is poised to expand into another fertile field of entertainmentBy MICHAEL LIEDTKE AP Technology WriterJuly 15, 2021, 8:52 PM• 3 min readShare to FacebookShare to TwitterEmail this articleSAN RAMON, Calif. — Netflix has hired veteran video game executive Mike Verdu, signaling the video streaming service is poised to expand into another fertile field of entertainment.Verdu’s addition as Netflix’s vice president of game development, confirmed Thursday, comes as the company seeks to sustain the momentum it gathered last year when people turned to the video streaming service to get through lockdowns imposed during the pandemic.Netflix wound up adding 37 million worldwide subscribers last year, by far the largest annual gain in its history. But the landscape has changed dramatically now that the easing pandemic has allowed people to return to a semblance of their normal lives.The video service stumbled out of the gate during the first three months of this year, posting its smallest first-quarter subscriber increase in four years, and it predicted its springtime gains would also be meager. The Los Gatos, California, company is scheduled to report its results for the April-June period on Tuesday.Adding video games would give Netflix another way to build upon the nearly 208 million subscribers that it boasted at the end of March. It wouldn’t come as a surprise either, given that Netflix co-CEO Reed Hastings has long said the company competes as much against video games for a piece of people’s leisure time as it does against other video streaming services offered by the likes of Amazon, Hulu, Walt Disney Co. and Apple.Netflix didn’t directly comment on its potential entry into video gaming, but left little doubt about its intent by announcing Verdu’s title at the company. Verdu is joining Netflix from Facebook’s Oculus, where he oversaw the virtual reality headset maker’s games. He previously worked at video game makers Electronic Arts and Zynga.Now the biggest questions are when Netflix might start to offer video games and whether it intends to charge a separate fee to play them or include them as part of its video streaming services.In a research note, CFRA analyst Tuna Amobi called video games a logical complement to Netflix’s vast library of TV series and films, helping to set the stage for eventual price increases that most subscribers will accept.Greg Peters, Netflix’s chief operating officer, told investors in April that video games could be another way to engage subscribers already immersed in the stories unfolding in the service’s TV series and movies.“We’re trying to figure out what are all these different ways that we can increase those points of connection, we can deepen that fandom,” Peters said at the time. Verdu will be reporting to Peters in his new job.Investors seemed to be taking a wait-and-see attitude on Netflix’s potential foray into video games. The company’s stock price dipped by 1% to close Thursday at $542.95. While much of the stock market has been notching record highs recently, Netflix’s shares are down by 8% from their peak of $593.29 reached in January.

Video games coming to Netflix? Latest hiring offers a clue

Video games coming to Netflix? Latest hiring offers a clue

Netflix has hired veteran video game executive Mike Verdu, signaling the video streaming service is poised to expand into another fertile field of entertainmentBy MICHAEL LIEDTKE AP Technology WriterJuly 15, 2021, 6:50 PM• 3 min readShare to FacebookShare to TwitterEmail this articleSAN RAMON, Calif. — Netflix has hired veteran video game executive Mike Verdu, signaling the video streaming service is poised to expand into another fertile field of entertainment.Verdu’s addition as Netflix’s vice president of game development, confirmed Thursday, comes as the company seeks to sustain the momentum it gathered last year when people turned to the video streaming service to get through lockdowns imposed during the pandemic.Netflix wound up adding 37 million worldwide subscribers last year, by far the largest annual gain in its history. But the landscape has changed dramatically now that the easing pandemic has allowed people to return to a semblance of their normal lives.The video service stumbled out of the gate during the first three months of this year, posting its smallest first-quarter subscriber increase in four years, and it predicted its springtime gains would also be meager. The Los Gatos, California, company is scheduled to report its results for the April-June period on Tuesday.Adding video games would give Netflix another way to build upon the nearly 208 million subscribers that it boasted at the end of March. It wouldn’t come as a surprise either, given that Netflix co-CEO Reed Hastings has long said the company competes as much against video games for a piece of people’s leisure time as it does against other video streaming services offered by the likes of Amazon, Hulu, Walt Disney Co. and Apple.Netflix didn’t directly comment on its potential entry into video gaming, but left little doubt about its intent by announcing Verdu’s title at the company. Verdu is joining Netflix from Facebook’s Oculus, where he oversaw the virtual reality headset maker’s games. He previously worked at video game makers Electronic Arts and Zynga.Now the biggest questions are when Netflix might start to offer video games and whether it intends to charge a separate fee to play them or include them as part of its video streaming services.In a research note, CFRA analyst Tuna Amobi called video games a logical complement to Netflix’s vast library of TV series and films, helping to set the stage for eventual price increases that most subscribers will accept.Greg Peters, Netflix’s chief operating officer, told investors in April that video games could be another way to engage subscribers already immersed in the stories unfolding in the service’s TV series and movies.“We’re trying to figure out what are all these different ways that we can increase those points of connection, we can deepen that fandom,” Peters said at the time. Verdu will be reporting to Peters in his new job.Investors seemed to be taking a wait-and-see attitude on Netflix’s potential foray into video games. The company’s stock price fell by more than 1% to around $540 in afternoon trading. While much of the stock market has been notching record highs recently, Netflix’s shares are down by about 9% from their peak reached in January.

Dozens of states target Google's app store in antitrust suit

Dozens of states target Google's app store in antitrust suit

Dozens of states are taking aim at Google in an escalating legal offensive on Big Tech. A lawsuit filed late Wednesday targets Google’s Play store, where consumers download apps designed for the Android software that powers most of the world’s smartphonesBy MICHAEL LIEDTKE AP Technology WriterJuly 8, 2021, 1:22 AM• 4 min readShare to FacebookShare to TwitterEmail this articleSAN RAMON, Calif. — Dozens of states are taking aim at Google in an escalating legal offensive on Big Tech.This time, attorneys general for 36 states and the District of Columbia have filed a lawsuit targeting Google’s Play store, where consumers download apps designed for the Android software that powers most of the world’s smartphones.The 144-page complaint filed late Wednesday in a Northern California federal court represents the fourth major antitrust lawsuit filed against Google by government agencies across the U.S. since last October.The lawsuit also comes against a backdrop of proposed laws in Congress tailored to either break up or undermine the power amassed by Google, Apple, Facebook and Amazon. The four have built trillion-dollar empires fueled by the immense popularity of services that people have become increasingly dependent upon.Much of the latest lawsuit echoes similar allegations that mobile game maker Epic Games made against both Google and Apple, which runs a separate app store exclusively for iPhones, in cases brought last August.Just as Epic did, the states’ lawsuit focuses primarily on the control Google exerts on its app store so it can collect commissions of up to 30% on digital transactions within apps installed on smartphones running on Android. Those devices represent more than 80% of the worldwide smartphone market.A high-profile trial pitting Epic — the maker of the widely played Fortnite video game — against Apple concluded in late May. A decision from the federal judge who presided over the month-long proceedings is expected later this summer. Epic’s lawsuit against Google is still awaiting trial.Although its app commissions are similar to Apple’s, Google has tried to distinguish itself by allowing consumers to download apps from other places than its Play store. Apple, in contrast, doesn’t allow iPhone users to install apps from any other outlet than its store.But the lawsuit filed Wednesday alleges Google’s claims that its Android software is an open operating system that allows consumers more choices is a sham.The complaint contends Google has deployed various tactics and set up anticompetitive barriers to ensure it distributes more than 90% of the apps on Android devices — a market share that the attorneys general argue represents an illegal monopoly. What’s more, the lawsuit alleges Google has been abusing that power to reap billions of dollars in profit at the expense of consumers who wind up paying higher prices to subsidize the commissions, and the makers of apps who have less money and incentive to innovate.“Google’s monopoly is a menace to the marketplace,” said Utah Attorney General Sean Reyes, who is leading the lawsuit along with his peers in New York, Tennessee and North Carolina. “Google Play is not fair play. Google must be held accountable for harming small businesses and consumers.”Google didn’t immediately respond to a request for a lawsuit, but it has adamantly defended the way it runs its Play store in its response to the Epic lawsuit and in other instances.The Mountain View, California, company also is fighting the three other lawsuits that were filed against it last year, including a landmark case brought by the U.S. Justice Department. Those cases are focused on alleged abuses of Google’s dominant search engine and its digital ad network that generates more than $100 billion in annual revenue for its corporate parent, Alphabet Inc.As the scrutiny on their app stores has intensified, both Apple and Google have been taking conciliatory steps. Most notably, both have lowered their commissions to 15% on the first $1 million in revenue collected by app makers — a reduction that covers most apps in their respective stores.But those measures haven’t lessened the heat on any of the major tech companies, nor should they, said Sen. Amy Klobuchar, a Democrat from Minnesota, who chairs a subcommittee that oversees antitrust issues.“This is exactly the type of aggressive antitrust enforcement that we need to rein in the power of big tech and address America’s monopoly problem,” she said in a statement.But fighting Big Tech won’t be easy. Besides being able to spend heavily to lobby for their positions, the companies also contend they have the law on their side. Facebook, for instance, scored a major victory last week when a federal judge dismissed an antitrust lawsuit against the social media company by the Federal Trade Commission and a coalition of states on the grounds that they hadn’t submitted enough evidence to back their monopoly allegations.

Dozens of states target Google's app store in antitrust suit

Dozens of states target Google's app store in antitrust suit

Dozens of states are taking aim at Google in an escalating legal offensive on Big Tech. A lawsuit filed late Wednesday targets Google’s Play store, where consumers download apps designed for the Android software that powers most of the world’s smartphonesBy MICHAEL LIEDTKE AP Technology WriterJuly 8, 2021, 1:22 AM• 4 min readShare to FacebookShare to TwitterEmail this articleSAN RAMON, Calif. — Dozens of states are taking aim at Google in an escalating legal offensive on Big Tech.This time, attorneys general for 36 states and the District of Columbia have filed a lawsuit targeting Google’s Play store, where consumers download apps designed for the Android software that powers most of the world’s smartphones.The 144-page complaint filed late Wednesday in a Northern California federal court represents the fourth major antitrust lawsuit filed against Google by government agencies across the U.S. since last October.The lawsuit also comes against a backdrop of proposed laws in Congress tailored to either break up or undermine the power amassed by Google, Apple, Facebook and Amazon. The four have built trillion-dollar empires fueled by the immense popularity of services that people have become increasingly dependent upon.Much of the latest lawsuit echoes similar allegations that mobile game maker Epic Games made against both Google and Apple, which runs a separate app store exclusively for iPhones, in cases brought last August.Just as Epic did, the states’ lawsuit focuses primarily on the control Google exerts on its app store so it can collect commissions of up to 30% on digital transactions within apps installed on smartphones running on Android. Those devices represent more than 80% of the worldwide smartphone market.A high-profile trial pitting Epic — the maker of the widely played Fortnite video game — against Apple concluded in late May. A decision from the federal judge who presided over the month-long proceedings is expected later this summer. Epic’s lawsuit against Google is still awaiting trial.Although its app commissions are similar to Apple’s, Google has tried to distinguish itself by allowing consumers to download apps from other places than its Play store. Apple, in contrast, doesn’t allow iPhone users to install apps from any other outlet than its store.But the lawsuit filed Wednesday alleges Google’s claims that its Android software is an open operating system that allows consumers more choices is a sham.The complaint contends Google has deployed various tactics and set up anticompetitive barriers to ensure it distributes more than 90% of the apps on Android devices — a market share that the attorneys general argue represents an illegal monopoly. What’s more, the lawsuit alleges Google has been abusing that power to reap billions of dollars in profit at the expense of consumers who wind up paying higher prices to subsidize the commissions, and the makers of apps who have less money and incentive to innovate.“Google’s monopoly is a menace to the marketplace,” said Utah Attorney General Sean Reyes, who is leading the lawsuit along with his peers in New York, Tennessee and North Carolina. “Google Play is not fair play. Google must be held accountable for harming small businesses and consumers.”Google didn’t immediately respond to a request for a lawsuit, but it has adamantly defended the way it runs its Play store in its response to the Epic lawsuit and in other instances.The Mountain View, California, company also is fighting the three other lawsuits that were filed against it last year, including a landmark case brought by the U.S. Justice Department. Those cases are focused on alleged abuses of Google’s dominant search engine and its digital ad network that generates more than $100 billion in annual revenue for its corporate parent, Alphabet Inc.As the scrutiny on their app stores has intensified, both Apple and Google have been taking conciliatory steps. Most notably, both have lowered their commissions to 15% on the first $1 million in revenue collected by app makers — a reduction that covers most apps in their respective stores.But those measures haven’t lessened the heat on any of the major tech companies, nor should they, said Sen. Amy Klobuchar, a Democrat from Minnesota, who chairs a subcommittee that oversees antitrust issues.“This is exactly the type of aggressive antitrust enforcement that we need to rein in the power of big tech and address America’s monopoly problem,” she said in a statement.But fighting Big Tech won’t be easy. Besides being able to spend heavily to lobby for their positions, the companies also contend they have the law on their side. Facebook, for instance, scored a major victory last week when a federal judge dismissed an antitrust lawsuit against the social media company by the Federal Trade Commission and a coalition of states on the grounds that they hadn’t submitted enough evidence to back their monopoly allegations.

Salesforce exec discusses post-pandemic playbook for work

Salesforce exec discusses post-pandemic playbook for work

Companies reshaped their businesses to deal with threats posed by the pandemicBy MICHAEL LIEDTKE AP Technology WriterJuly 6, 2021, 5:38 PM• 4 min readShare to FacebookShare to TwitterEmail this articleAfter reshaping their businesses to deal with threats posed by the pandemic, many companies are facing another daunting challenge: how to bring remote workers back to the office when people are still debating face masks and not everyone has received the COVID-19 vaccine.With roughly 60,000 workers, business software maker Salesforce.com has already navigated that in roughly one-third of its more than 100 offices around the world. Just last month, it began to bring back some of its 10,000 workers in San Francisco, where its 61-story headquarters is the tallest building in northern California.Brent Hyder, Salesforce’s chief people officer, discussed the company’s approach with The Associated Press.Q: How is the return to the office going so far?A: Quite honestly, in the U.S., I am not sure people are super ready to get back into office spaces, even though they are all working like crazy. Thursdays are by far the busiest day. Up to 80% of our collaboration spaces are full on those days. We have moved exclusively to really open seating. We call it neighborhood seating where we have no dedicated offices any more.Q: Why did you decide to have a flexible policy that allows employees to keep working remotely?A: This need to get on the train or get on the bus or get in your car to go into the office for no particular reason has gone away. The pandemic has taught us that. If you don’t need to commute, why? But there are times when it’s worth the commute. The need to be together is still critical to our culture and probably to everyone’s culture. So for us the office does that.Q: Are you finding when employees do come into the office, they are more collaborative?A: Without a doubt. Maybe the most exciting thing about this is the opportunity to be intentional about your collaboration. People will say, ’OK, why am I going to the office? Who am I meeting with? What’s it for? I have a choice and so if I make this choice, it’s going to be better and more productive.′Q: Is there any consideration to requiring employees to be vaccinated?A: We are not saying you have to be vaccinated. What we are saying in the United States (where Salesforce employs about 35,000 people) is if you are vaccinated, you can choose your own journey (…) What we do want to make as a statement is we believe in vaccines.Q: What percentage of your employees have indicated they want to work remotely on a permanent basis?A: Before the pandemic, 18% of our population was fully remote. And today we believe about 25% of our team will be fully remote.Q: How has the pandemic changed Salesforce’s approach to free food and snacks in the office?A: We will still have snacks and drinks. We will just follow our safety protocols, so instead of me going in and grabbing a whole handful of gummy bears from a bowl, which unfortunately, I used to do several times a day, we have individually wrapped packages where I am only able to have 10 or 15 at a time! So it is probably healthier.Q: What are some of the biggest lessons you have learned from all this?A: We have to keep remembering this was a very traumatic experience, and while we see some positive momentum for businesses and culture, what we went through is going to take some time to get over. Being intentional about things is critical for a flexible environment. If we just go back to what we did before, I believe we will fail. And not only that, our business won’t grow as fast.

Salesforce exec draws up post-pandemic playbook for work

Salesforce exec draws up post-pandemic playbook for work

Companies reshaped their businesses to deal with threats posed by the pandemicBy MICHAEL LIEDTKE AP Technology WriterJuly 5, 2021, 4:34 PM• 4 min readShare to FacebookShare to TwitterEmail this articleAfter reshaping their businesses to deal with threats posed by the pandemic, many companies are facing another daunting challenge: how to bring remote workers back to the office when people are still debating face masks and not everyone has received the COVID-19 vaccine.With roughly 60,000 workers, business software maker Salesforce.com has already navigated that in roughly one-third of its more than 100 offices around the world. Just last month, it began to bring back about 10,000 workers in San Francisco, where its 61-story headquarters is the tallest building in northern California.Brent Hyder, Salesforce’s chief people officer, discussed the company’s approach with The Associated Press.Q: How is the return to the office going so far?A: Quite honestly, in the U.S., I am not sure people are super ready to get back into office spaces, even though they are all working like crazy. Thursdays are by far the busiest day. Up to 80% of our collaboration spaces are full on those days. We have moved exclusively to really open seating. We call it neighborhood seating where we have no dedicated offices any more.Q: Why did you decide to have a flexible policy that allows employees to keep working remotely?A: This need to get on the train or get on the bus or get in your car to go into the office for no particular reason has gone away. The pandemic has taught us that. If you don’t need to commute, why? But there are times when it’s worth the commute. The need to be together is still critical to our culture and probably to everyone’s culture. So for us the office does that.Q: Are you finding when employees do come into the office, they are more collaborative?A: Without a doubt. Maybe the most exciting thing about this is the opportunity to be intentional about your collaboration. People will say, ’OK, why am I going to the office? Who am I meeting with? What’s it for? I have a choice and so if I make this choice, it’s going to be better and more productive.′Q: Is there any consideration to requiring employees to be vaccinated?A: We are not saying you have to be vaccinated. What we are saying in the United States (where Salesforce employs about 35,000 people) is if you are vaccinated, you can choose your own journey (…) What we do want to make as a statement is we believe in vaccines.Q: What percentage of your employees have indicated they want to work remotely on a permanent basis?A: Before the pandemic, 18% of our population was fully remote. And today we believe about 25% of our team will be fully remote.Q: How has the pandemic changed Salesforce’s approach to free food and snacks in the office?A: We will still have snacks and drinks. We will just follow our safety protocols, so instead of me going in and grabbing a whole handful of gummy bears from a bowl, which unfortunately, I used to do several times a day, we have individually wrapped packages where I am only able to have 10 or 15 at a time! So it is probably healthier.Q: What are some of the biggest lessons you have learned from all this?A: We have to keep remembering this was a very traumatic experience, and while we see some positive momentum for businesses and culture, what we went through is going to take some time to get over. Being intentional about things is critical for a flexible environment. If we just go back to what we did before, I believe we will fail. And not only that, our business won’t grow as fast.