Tag Archives: Streaming

Finland's Hatch plans Netflix-style streaming for mobile games
March 26, 2018 6:01 pm|Comments (0)

HELSINKI (Reuters) – Hatch Entertainment, a spin-off from the game maker behind the Angry Birds franchise, is testing streaming access to mobile games the way Netflix does for movies or Spotify for music.

Hatch CEO Juhani Honkala presents the company’s mobile game streaming service at his office in Espoo, Finland March 23, 2018. REUTERS/Jussi Rosendahl

The Finnish company that grew out of Rovio believes the gaming industry is ready for flat-fee monthly offers to give players a greater choice of titles and replace the irritating free-at-first, pay-later model that has dominated this decade.

“This is a new way to play mobile games, and at the moment we don’t see any direct competition,” Hatch Chief Executive and Rovio veteran Juhani Honkala told Reuters.

The streaming model faces scepticism from an industry that currently makes its money per game, charging fees for props or upgrades within games.

“High-quality content is more likely to attract new players than positioning around innovative streaming technology,” said Jack Kent, an analyst at IHS Technology.

Spotify makes its debut on the New York stock market next week in a listing that could value the business at $ 20 billion, but it took the company years to persuade music publishers of the attraction of streaming services over single music purchases.

More than 100 game developers and publishers are ready to give the new business model a try, including SEGA, Square Enix and Bandai Namco, Honkala said, though the beta version has only 10,000 user downloads so far in the Google Play store.

INDUSTRY BACKING

Hatch’s platform, which runs on Android phones and is being tested in 18 European countries, has also racked up support from U.S. wireless chip giant Qualcomm and China’s Huawei, the world’s third-largest smartphone maker.

Hatch CEO Juhani Honkala presents the company’s mobile game streaming service at his office in Espoo, Finland March 23, 2018. REUTERS/Jussi Rosendahl

“We have very strong industry backing,” Honkala said.

Rovio is stepping up its investment in Hatch, looking to secure a new revenue stream after a dramatic profit warning sent its share price tumbling by 50 percent last month.

Rovio owns 80 percent of Hatch, which operates as an independent subsidiary.

Hatch CEO Juhani Honkala poses for a photo at his office in Espoo, Finland March 23, 2018. REUTERS/Jussi Rosendahl

Smartphone-based games are currently dominated by a free-to-play model that makes money through in-app purchases that help players to progress.

The model rewards games that have become mass-market success stories but makes life challenging for lower-ranked titles and smaller publishers who have trouble getting discovered as players stick to games they know and have invested in.

Rovio itself has struggled in recent years to repeat the success of Angry Birds and has had trouble forecasting future revenue because of heavy marketing costs and increased competition.

Hatch now offers 100 games on its platform and it has signed up about 200 more, including SEGA’s Sonic the Hedgehog games, Crazy Taxi and Virtua Tennis. Honkala said the service will pay 70 percent of its revenues to the publishers of its games.

The model would also allow more room for educational or strategy games that have longer narratives, he said, adding that running the service from the cloud rather than locally on the phone should also improve the experience for multiplayer games.

The company does not have a target schedule for formal launch but Honkala said it could happen this year. He declined to say how much the subscription price would be.

Reporting by Jussi Rosendahl; Editing by Eric Auchard and David Goodman

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Disney creates streaming video unit for digital future
March 14, 2018 6:13 pm|Comments (0)

[unable to retrieve full-text content]LOS ANGELES (Reuters) – Walt Disney Co said on Wednesday it had created a new unit for its streaming video and international businesses as the company retools its traditional media operation for a world rapidly embracing online video.
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Watch Out, Sony and Microsoft: Google Is Developing a Video Game Streaming Service
February 7, 2018 6:10 pm|Comments (0)

Google, which has largely sat on the sidelines of the video game industry, seems ready to get in the fight.

The company is working on a new service codenamed Yeti, which would let people play games streamed to them online, potentially eliminating the need for a dedicated console like the PlayStation 4 or a high-end gaming computer.

News of the service first broke via The Information. Gaming industry insiders, who were not authorized to speak on-the-record, tell Fortune that Google is targeting a holiday 2019 release for Yeti, though the company is currently behind schedule and that date could shift.

Google recently hired Phil Harrison, a long-time gaming industry veteran. Sources indicate he is closely involved with the project. Harrison spent 15 years as the head of Sony’s network of game studios and three years as a senior member of Microsoft’s Xbox team. Since leaving those companies, he has served as an adviser and board member to various gaming companies.

Google declined to discuss the initiative, citing a company policy of not commenting on rumors or speculation.

Some details about Yeti are still fuzzy. It could be a dedicated streaming box or could operate through the company’s Chromecast device. How it will overcome issues of in-game lag is one of the biggest hurdles. But Fortune has learned that several major publishers are working with Google on the project.

Yeti would compete with Sony’s Playstation Now streaming service, which carries a $ 19.95 monthly fee (or $ 100 annual fee). That service, built off of one of the pioneers in game streaming, has not found an especially large audience, in part because of the high price and older catalog of games. Microsoft has previously discussed launching a game streaming service, but has not made any announcements about a new streaming product.

Google has flirted with the game industry before. It almost acquired Twitch in 2014 for $ 1 billion, but the deal fell apart in the final stages. (Amazon would later acquire that game streaming service.) Since then, Google’s YouTube division has dramatically increased its presence in the video game world, live streaming from E3, the video game industry trade show, and enabling live game streaming.

There’s certainly a big financial incentive for Google in video games. The industry saw revenues of $ 36 billion in the U.S. alone in 2017. Globally, it generates over $ 100 billion each year.

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Watch Out, Sony and Microsoft: Google Is Developing a Video Game Streaming Service
February 7, 2018 6:05 pm|Comments (0)

Google, which has largely sat on the sidelines of the video game industry, seems ready to get in the fight.

The company is working on a new service codenamed Yeti, which would let people play games streamed to them online, potentially eliminating the need for a dedicated console like the PlayStation 4 or a high-end gaming computer.

News of the service first broke via The Information. Gaming industry insiders, who were not authorized to speak on-the-record, tell Fortune that Google is targeting a holiday 2019 release for Yeti, though the company is currently behind schedule and that date could shift.

Google recently hired Phil Harrison, a long-time gaming industry veteran. Sources indicate he is closely involved with the project. Harrison spent 15 years as the head of Sony’s network of game studios and three years as a senior member of Microsoft’s Xbox team. Since leaving those companies, he has served as an adviser and board member to various gaming companies.

Google declined to discuss the initiative, citing a company policy of not commenting on rumors or speculation.

Some details about Yeti are still fuzzy. It could be a dedicated streaming box or could operate through the company’s Chromecast device. How it will overcome issues of in-game lag is one of the biggest hurdles. But Fortune has learned that several major publishers are working with Google on the project.

Yeti would compete with Sony’s Playstation Now streaming service, which carries a $ 19.95 monthly fee (or $ 100 annual fee). That service, built off of one of the pioneers in game streaming, has not found an especially large audience, in part because of the high price and older catalog of games. Microsoft has previously discussed launching a game streaming service, but has not made any announcements about a new streaming product.

Google has flirted with the game industry before. It almost acquired Twitch in 2014 for $ 1 billion, but the deal fell apart in the final stages. (Amazon would later acquire that game streaming service.) Since then, Google’s YouTube division has dramatically increased its presence in the video game world, live streaming from E3, the video game industry trade show, and enabling live game streaming.

There’s certainly a big financial incentive for Google in video games. The industry saw revenues of $ 36 billion in the U.S. alone in 2017. Globally, it generates over $ 100 billion each year.

Tech

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Watch Out, Sony and Microsoft: Google Is Developing a Video Game Streaming Service
February 7, 2018 6:05 pm|Comments (0)

Google, which has largely sat on the sidelines of the video game industry, seems ready to get in the fight.

The company is working on a new service codenamed Yeti, which would let people play games streamed to them online, potentially eliminating the need for a dedicated console like the PlayStation 4 or a high-end gaming computer.

News of the service first broke via The Information. Gaming industry insiders, who were not authorized to speak on-the-record, tell Fortune that Google is targeting a holiday 2019 release for Yeti, though the company is currently behind schedule and that date could shift.

Google recently hired Phil Harrison, a long-time gaming industry veteran. Sources indicate he is closely involved with the project. Harrison spent 15 years as the head of Sony’s network of game studios and three years as a senior member of Microsoft’s Xbox team. Since leaving those companies, he has served as an adviser and board member to various gaming companies.

Google declined to discuss the initiative, citing a company policy of not commenting on rumors or speculation.

Some details about Yeti are still fuzzy. It could be a dedicated streaming box or could operate through the company’s Chromecast device. How it will overcome issues of in-game lag is one of the biggest hurdles. But Fortune has learned that several major publishers are working with Google on the project.

Yeti would compete with Sony’s Playstation Now streaming service, which carries a $ 19.95 monthly fee (or $ 100 annual fee). That service, built off of one of the pioneers in game streaming, has not found an especially large audience, in part because of the high price and older catalog of games. Microsoft has previously discussed launching a game streaming service, but has not made any announcements about a new streaming product.

Google has flirted with the game industry before. It almost acquired Twitch in 2014 for $ 1 billion, but the deal fell apart in the final stages. (Amazon would later acquire that game streaming service.) Since then, Google’s YouTube division has dramatically increased its presence in the video game world, live streaming from E3, the video game industry trade show, and enabling live game streaming.

There’s certainly a big financial incentive for Google in video games. The industry saw revenues of $ 36 billion in the U.S. alone in 2017. Globally, it generates over $ 100 billion each year.

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Momo Vs. YY, The Battle Of The Chinese Live Streaming Platforms
December 16, 2017 12:46 pm|Comments (0)

Here we compare two of the (more or less) pure plays in the hot Chinese live streaming sector, Momo (NASDAQ:MOMO) and YY (NASDAQ:YY). The fortunes of their share prices have skyrocketed in a hardly fathomable way the last five years.

While YY’s shares haven’t exactly done badly with a five-year return of over 600%, earlier this year MOMO was up a stunning 22,500% or so and that in a mere 3.5 years. However, lately the going hasn’t been so good and YY has basically taken back some lost terrain.

At the minimum, these graphs show that stocks in social media can make fortunes, but given Momo’s travails of late, things can also go south. We sort of warned about this in the article we wrote about this name at the end of August.

Social Platform Economics

But let’s concentrate first on the potential upside, which lies in the business model of platform economics in general, and social platform economics in particular:

  1. Social platforms (platforms in general) have powerful network effects.
  2. Social platforms have little content cost.
  3. Social platforms (platforms in general) have large economies of scope.
  4. Social platforms + machine learning creates powerful increasing returns.

Let’s discuss these briefly. A platform is more useful when others use it, setting off network effects and a scramble to appropriate the first-user advantage.

However, the streaming media platforms like Momo and YY have low barriers to entry, hence a multiple of these have emerged. A Chinese crackdown has served as a significant cull (as we described in our article about YY), and others are likely to have failed anyway unable to obtain a minimum viable scale. This isn’t surprising, given the significant upfront investments required.

Yet, multiple platforms still exist, like those of Momo and YY (but also Tencent (OTCPK:TCEHY) and others). So this is not a winner-take-all market, the network effects are not all consuming like other social platforms, most notably Facebook (FB).

Indeed, there is little in the way of content cost, but these streaming media platforms have other significant cost to contain, stemming from the fact that the network effects are not all consuming and no real dominant player has emerged. This sets the platforms in competition against one another, and this involves a lot of cost:

  • Marketing and sales cost, the cost to entice new users to your platform, instead of competing platforms.
  • Revenue sharing to incentivize top contributors to stay.
  • R&D: The cost to improve the possibilities of the platform for users and open up different revenue streams for them so they’ll contribute to your platform rather than the competition.
  • Development cost, the cost to help contributors to improve (in theory this is win-win, at least if successful).

These are just the most obvious costs, and we’re sure there are more.

The history of these platforms is a nice illustration of the economies of scope. Momo started as a dating site. YY started as an online gaming site. Both morphed into something else, as once you have a lot of eyeballs accumulated, a platform simply provides you the opportunity to add new functions, bells and whistles.

We see this in business platforms all the time, where the likes of Workday (WDAY), Tableau (DATA) and Ellie Mae (ELLI) are adding features all the time.

All this potentially gets to a whole new level when machine learning is added. What machine learning does is tailor content to individual users. These users will become more engaged that way and contribute even more.

By contributing even more, they produce more data for the machine learning, enabling even better tailoring, creating a virtuous cycle. But the same virtuous cycle works with advertising (or, as we have seen with Facebook where the lines between content and advertisement are blurred, with political propaganda).

So in theory these are very powerful business models, especially with the addition of machine learning. And indeed Momo has been improving the algorithms that drive what content get maximum exposure (from the Q2CC):

The higher the content quality is the greater level of user exposure that piece of content can get on the platform… Regarding the question about personalized recommendation logic and content tagging logic, I think our system is pretty much based on what is called collaborative filtering. This is a rather complicated and sophisticated mechanism. To put it simple, the system will assign different interest tax to users according to their respective interest graph and then what you are going to see – what you are more likely going to see on the platform is largely determined by the type of content that other users with similar interest tied to you gravitate toward, and that gravitation is further defined by user actions such as clicking through liking or other type of engagement.

We haven’t found a similar quote from YY, but we’re pretty sure it’s doing something similar. It wouldn’t be able to survive for long without it.

Diverging fortunes?

As SA contributor Justin Giles explained, Momo’s shares sold off despite a solid top and bottom line beat in Q3 because of softer Q4 guidance and this:

However, for the second consecutive quarter, live paying users remained stagnant at 4.1 million. If Momo cannot get more users to start spending money on its platforms, it will be tougher for the company to remain a growth story as investors start looking at it from more of a value side.

Curiously enough, we ventilated our skepticism about the staying power of paying customers in our YY article published earlier in the week. Justin also noted the following:

On the flip side, while live paying users remained unchanged at 4.1 million, average revenues from those users jumped. Total paying users from value-added services also increased from 4.5 to 4.8 million with the Company seeing an increase in the average revenues per paying user.

The company’s cash position continues to climb jumping more than $ 100M from the second quarter. As of September 30, 2017, Momo’s cash, cash equivalents and term deposits totaled $ 949.7 million, compared to $ 846.3 in the second quarter and $ 651.3M from a year ago.

The shares of Momo are off from their highs by a great deal whilst YY’s haven’t suffered from a similar bout of investor angst, at least not yet. Is the skepticism towards Momo justified (in relation to YY)?

Growth

While YY is still selling 30%+ more, Momo is actually catching up. Indeed, revenues have grown way faster the last five years.

And Momo is still growing four times(!) as fast this year.

Margins

At first sight, one would argue a resounding no.

While Momo’s (GAAP) margins are trending down, they are still substantially higher compared to those of YY.

Other finances

As you can see below, Momo has almost caught up with YY in terms of EBITDA on an absolute basis, but considering YY’s larger revenues (and market capitalization) it has already caught up with YY on a relative basis.

And here is another telling figure, Momo is generating way more cash, and the difference is widening rapidly.

Neither company has debt, and both companies are mildly diluting (YY embarked on a substantial $ 442.2M secondary offering earlier in the year).

Valuation

The following figures are GAAP figures and backwards looking:

But they show that YY, despite growing much slower, has closed its earnings valuation gap and even overtaken Momo, as it has with the other valuation metrics.

Conclusion

The selloff of Momo is not easy to explain in isolation, but compared to one of its rivals, YY, it becomes harder still. Momo is doing better on a raft of metrics like growth, cash generation, and margins, often substantially so.

Yet the valuation gap has continued to narrow, and the selloff in Momo has been such that YY has even overtaken Momo on a valuation basis. It really is difficult to argue that Momo’s shares are expensive.

While we have some reservations about the sector (it could be a bit of a fad, and part of the earnings stream seems to be fairly uncertain to us), if you don’t have these qualms like we do, then the choice is pretty clear.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Spotify takes a cue from Tidal with hi-fi streaming option
March 7, 2017 8:05 am|Comments (0)

TwitterFacebook

Facebook copies Snapchat, and Spotify copies Tidal. 

The top music streaming service is planning to introduce lossless audio — or CD-quality music — to subscribers for a higher monthly price, according to a report in The Verge

That report was based on a Spotify user source who got the option to sign up in what looked like a test of potential pricing, and some Reddit users who did, too. A Spotify spokesperson told the publication that “We are always testing new products and offers but have no news to share at this time.” Spotify gave the same statement to Mashable

The pricing test offered users an upgrade to high-quality audio for between $ 5 and $ 10 more per month than the usual $ 10-a-month Spotify Premium. That would be $ 15 to $ 20 a month total for lossless audio Spotify subscribers.  Read more…

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Streaming Apps Are Coming to VR Starting with Netflix Today
January 16, 2016 12:15 pm|Comments (0)

For those who have been itching to stream the new season of TV from the comfort of your Gear VR, a Netflix VR app will be available today, with apps for Hulu and Vimeo as well as Twitch coming on soon.

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