To B or to C, that is the question

Jon Russel of TheNextWeb had this interesting tweet the other day:

 To paraphrase Ben Evans’ excellent post a couple of weeks ago, this is an unfair comparison, but a relevant one.

There are a couple of thoughts that I have on this. Firstly, the clichéd “necessity is the mother of invention.” Asian social media companies have generally been pioneers in the space of monetization via virtual goods, whereas Silicon Valley companies have focused more on ad-based monetization. IMO a big factor is the availability and maturity of advertising dollars – if the US does not have a thriving advertising industry and sophisticated advertisers (the blue chip companies and their global brands), Silicon Valley biz models will look very different.

Secondly, an ad-based biz model (B2B) demands a fundamentally different set of organizational structure and capabilities from a virtual goods biz model (B2C). In Silicon Valley, the former often requires an ad sales force fluent with convincing Madison Avenue ad execs to allocate client ad spend, as well as building the tools and support systems needed. In Asia, the latter model requires sophisticated retail / payments capabilities, such as a distribution network for physical gift cards that consumers can buy to convert to virtual currency (which can then be spent on virtual goods), as well as handling various online payment schemes (or building your own from scratch) and fraud, and also a customer support service that can handle literally tens of millions customers.

Another way to look at the fundamentally different capabilities required: ad-based biz model is generally about monetizing user data – user behavior / intent that advertisers value, so data aggregation / modeling / predictions would be key tech capabilities; whereas virtual goods biz model is about creating demand for content – “I want to buy that virtual rose so I can express my feelings to my loved one” – and hence requires a content pipeline as well as understanding of what types of content sells.

Thirdly, from a product perspective, “adding advertising to my free service without annoying my users (or not annoying them to the point of churning)” is a very different design goal from “providing value-added services that a (typically small) % of my users are willing to pay for”. Advertising in exchange for a free service is something that users tolerate; getting users to actually pay real cash is generally speaking much harder.

To be clear, I’m not saying that one model is better than the other, simply that two similar services (from users’ perspective) could mean fundamentally different company strategies.

I’ll end this post with another set of examples for comparison: twitch.tv and YY streaming. Both operate online streaming services in the video-games space. Twitch monetizes via video ads (as well as cut of premium subscription fees). YY mostly monetizes via virtual goods that viewers buy to gift streamers in the public chat feed that accompanies the stream – if that sounds bizarre, you really need to see it in action.

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Video-games: the jobs to be done

I had recently ran into @asymco in a private event, and I asked him his opinions on the future of PC gaming (given the context of the decline of PC hardware sales). He responded that I should think less of devices and more of “what is the job being done?” And hence I’ll try to take a stab at “the jobs to be done” by video-games.

(A casual 5-min literature research turned up this post on Medium, which was an interesting read but not structured enough for my purposes, though there are clearly some points which will overlap.)

At a very high level, what are some of the “jobs” that people employ video-games to do? A quick list on a napkin might look this:

  1. To kill time - many mobile games’ default use case
  2. To experience a personalized narrative - anecdotally it seems that especially with female gamers, quite a lot play games primarily to experience the story. I have met many Chinese girls who recollect fondly their experiences playing Chinese RPGs such as PAL (仙剑奇侠传, which has spawned a whole TV series) 
  3. To appreciate immersive, high-fidelity audio-visuals - the arms race for better immersion; some games have such great visual design they can appreciated as art
  4. To be mentally stimulated - Sudoku / Chess
  5. To relax and be amused - escapism from real-life stress
  6. To compete - competitive multiplayer is a core feature for many games today
  7. To socialize with friends, as a group activity - getting together for Rock Band, Wii Sports, or the more “hardcore” stuff such as Call of Duty / Halo
  8. To seek expression of individuality (creativity, dexterity, etc.) - sandbox games such as Minecraft
  9. To seek peer recognition - leaderboards and ranked ladders
  10. To seek a sense of achievement - core to any “addictive” video-game are the feedback loops that make players proud of themselves
  11. To seek a specific social identity and a sense of belonging - affiliation with an online community, but also in esports the emergent signs of personal identity traditionally associated with following “real” sports

This is a very hasty list (some items share overlaps, for example the motivation behind “to compete” could be to seek a sense of achievement and recognition, but there’s also the enjoyment from the struggle of competition itself). In any case, a game would usually hit at least a couple of the above; a great game will likely cover many.

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2013 Top-grossing Video-games Observations

Yesterday I tried to put together a guesstimate list of the top-grossing video-games of 2013 (in terms of player spending, not dev/publisher revenue).

To summarize, a top 10 list would look something like this (in ball-park descending order, sources are in the previous post):

  • Grand Theft Auto V – $2B
  • [EDIT3 Candy Crush Saga - $1.5B, simple estimate from their S1]
  • Puzzle & Dragons – $2B [EDIT1 - $1.4B after changing my assumption for whether their revenue was pre or after platform 30% cut]
  • Call of Duty: Ghosts – $1B
  • World of Warcraft – $1B?
  • Candy Crush Saga – $1B?
  • Clash of Clans – $1B?
  • Crossfire – $1B*
  • League of Legends – $0.6B*
  • [EDIT2 Clash of Clans - $-0.5B - revising these games' numbers after Supercell's revenue disclosure]
  • Fifa 14 – $0.5B
  • Pokemon X/Y – $0.5B

*Crossfire and League of Legends are Superdata Research estimates, and as I don’t know their methodology I’m unsure what adjustments need to be made from “game revenue” to “player spending”. Also the same disclaimer/disclosure as the prior post, while I work on League of Legends I’m not using any internal data and I’m not vouching for the accuracy of external research claims.

As I look at this list, some take-aways jump out:

  • From a return on investment perspective, the top-grossing mobile games are likely an order of magnitude better than other platforms – the production / marketing / operating costs behind P&D / CoC / CCS are probably a fraction of that of GTA V / CoD.
    • However, this doesn’t mean mobile games represent better ROI overall – the 3 mobile titles on this list are the extremely lucky few out of hundreds of thousands of mobile titles.
  • These 10 games represent a surprisingly wide (IMO) range of gaming experiences (genres, platforms and business models). This would actually be very interesting to probe further, in terms of asking the question of “what are the jobs being done?” by these products/services.
    • I’ll try to tackle this specifically in a future post.
  • The rise of mobile is really fast – would anyone a couple of years ago have imagined not one, but three mobile games, in a top 10 grossing list? It suggests that there may be an entirely new (and much bigger in scale) segment of gamers via mobile.
    • Would these new gamers remain “casual” gamers, or can they be introduced to the more “core” gaming experiences? (Or to flip the question around, can “core” gaming experiences be brought to mobile?) This is literally a multi-billion dollar question
  • The geographic markets behind these 10 games show interesting concentrations. GTA V / CoD / Fifa are primarily driven by western markets; P&D / Pokemon are primarily Japan; CF is mostly China; CCS / CoC may have the most global distribution.
  • Future growth potential – I think there’s an almost 100% obvious answer (with immense implications) to the question of “which types of games are likely to grow faster in future?”
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What were the top-grossing video-games of 2013?

On reading some of the financials disclosed recently by games publishers, I had this question in my head: what were the top-grossing video-games of 2013? I’ll do a simple write-up here using a few public sources and some ball-park estimates.

To start off, let’s define top-grossing as measured by player spending. That is, I’m not particularly concerned with how much revenue publishers/developers took in (versus the cuts taken by the various distribution channels, or factoring in how revenue is recognized from an accounting perspective), but rather looking at how big the pie was in terms of money that players paid out-of-pocket.

As a first step, let’s look at boxed retail, which is mostly console/dedicated handheld titles: http://www.vgchartz.com/yearly/2013/Global/

Grand Theft Auto V was clearly the monster hit of the year, with almost 30MM units across Xbox360 and PS3 in 2013 (Take Two announced 32.5MM units shipped recently). Assuming an average retail price of $60 + tax (say, 10%), GTA V comes in at just shy of $2B of player spending. (A different cut is using Take Two’s reported earnings data, where GTA accounted for 72.2% of $2.15B from Mar-Dec 2013, which is $1.55B – which is about $50 per unit, which sounds about right for the pre-retail markup price.)

Call of Duty: Ghosts had close to 15MM units, which translates to about $1B of player spending (assuming $60+tax).

Aside from these two titles, no other title seemed to come close to $1B of player spending – Pokemon X/Y had 10MM units, but a lower retail price ($40), so it would come below $0.5B. Fifa 14 had close to 9MM units, which would be around $0.5B as well. It’s also worth noting that the top PC game at boxed retail was Starcraft 2: Heart of the Swarm, with only 1.1MM units.

Next let’s look at PC digital retail (as in, purchase once, play forever, via Steam etc.). I’m actually drawing a blank as I write this thinking of a major PC game in 2013 under the digital retail model that would come close to $0.5B or more. (Doing a quick scan on steamgraph I really struggled to find any 2013 releases that would be likely – so let’s table this for now.

Next up – subscription-based games. Or, basically, World of Warcraft. I’ll just do a quick back of the envelope exercise rather than dig through Activision earnings. It seems the last publicly announced WoW subscriber numbers were 7MM as of July 2013 – assuming $15 per month (ignoring the bulk discounts and tax, or regional pricing models in Asia – which could really change the picture but I haven’t researched this in detail) that comes out to $1.26B. So WoW is probably around the billion dollar club in terms of player spending.

Next, free-to-play games. A big disclosure/disclaimer here, I work on League of Legends in my day job, and I will not be disclosing any internal data points. Instead, I’ll only use publicly available info, such as this a publicly released research piece. (I’m not vouching for the accuracy of the report, especially any League of Legends estimates from this research vendor.) From this source, it seems there’s 2-3 online games under the free-to-play model that are in the ballpark of $0.5-1B in player spending.

Lastly (and this is what I really want to talk about), mobile games (basically iOS + Android). GungHo released their numbers recently, and Puzzle & Dragons scored huge, accounting for 91% of the $1.5B revenue. Adding back the 30% app store commission (I’m assuming their revenue numbers are net of this commission, since that’s what they get from Apple/Google), that comes out to just shy of $2B in player spending. [EDIT1: I’m now assuming that the standard revenue reporting for mobile games includes the Apple/Google 30% cut, as this was stated in the reports last year on Supercell, e.g. this post]

While we don’t have full year numbers for Clash of Clans or Candy Crush Saga, it’s not far-fetched to see them in the billion dollar club. For example, some research vendors estimate that Clash of Clans was the overall top-grossing iOS game of 2013, while Candy Crush Saga was the top-grossing Google Play game of 2013. Picturing what we know about Puzzle & Dragons, then these two titles are almost certainly billion dollar titles in terms of player spending. [EDIT2: Supercell’s 2013 revenue is $892MM, so Clash of Clans by itself may be around $500-650MM, since it is generally higher ranked than Hay Day].

[EDIT3: So King filed their IPO prospectus, and we have a lot more data on Candy Crush Saga. If we do a simple estimate and take the reported bookings contribution from CCS from Q4 2013 (78%) and apply it to the whole year revenue of $1.9B, that’s around $1.5B from CCS. And King reports gross revenue, so that’s the amount players spent.]

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Mobile Card Games

(A sort of free-flow post that goes all over the place in my attempt to get back to blogging)

For the past couple of years, app stores around the world have been invaded with a range of casual card games. I’m not referring to card games of the poker / casino variety (though that’s certainly a major category revenue-wise, especially in western markets), but rather the “collectible card game” type which has taken an interesting evolution in mobile.

One of the earlier games to hit market success in this model was probably Rage of Bahamut, which still puts on a respectable showing today (I was able to quite easily find it on App Annie’s grossing charts). But since then tons of clones have leveraged the same underlying engine, some with astonishing levels of success – Puzzle & Dragons being the flag-bearer (it has a match-3 mechanic, but the meta gameplay is the same). Various big name IPs have also been leveraged, such as Marvel (Marvel Puzzle Quest) and Star Wars (with the horrendous Force Collection mobile game). In China, “I’m MT” reached massive success with a derivative IP (it’s based on a fan-art based on WoW), and since then there’s been literally hundreds of clones, many infringing on global IP franchises such as Naruto, One Piece, and League of Legends (disclosure: which I happen to work on).

Put aside the specific puzzle mechanics in Puzzle & Dragons etc. (which I argue add some real gameplay engagement but doesn’t explain the popularity of the overall genre, especially all the games with no combat mechanic at all), the basic formula of these games is the card “level-up/evolution fusion” mechanic, the randomized card purchasing via a treasure-box, and a cheap PVE questing system.

The “level-up/evolution fusion”  mechanic is essentially a convoluted card leveling system which dramatically extends the collection depth, obfuscates the collection cost, and acts as an economy drain for in-game items that players farm up – a card can be both “leveled up” by using other cards as source material as well as “evolved” (again using various items as material) to become a different card (usually a higher-tier card of the same character). So, say you have a Tier I warrior that is level 5, he can be leveled up to a max of level 30, at which point he can be evolved to a Tier II warrior that starts at level 1 (and the cycle repeats).

The card purchasing treasure-box functions to add scarcity (and therefore collection depth) via randomization. It satisfies a psychological itch very similar to gambling (and is often called a gambling mechanic). It’s also the same primary gameplay loop that players seek out when farming items in Diablo (the chance to get some really good item “drop”).

The cheap PVE questing system is exactly that – highly repetitive, low production cost PVE engagement, with various bells and whistles on top to drive engagement (for example, some levels are only open at certain times of the day or week). Players generally farm these PVE levels to gain items that help them pursue the card level-ups and evolutions.

The fact that this basic formula has demonstrated immense market success is also revealing in other ways. For example, the fact that a large number of these games are successful without any stimulating “moment-to-moment” gameplay (e.g. Puzzle & Dragons’ match-3 combat) shows that players are engaging with them in a very low-intensity fashion (not in terms of time/money commitment, but rather attention and focus). These games are catered towards capturing the popular “fragmented time” space pursued by many mobile apps. They can be great “second screen”/multi-tasking experiences, which a high intensity game cannot satisfy.

At the same time, it’s really hard to see these games as not a fad. The formula can be extremely sticky initially but once players experience fatigue there’s very little to prevent them from churning. Some games have tried differentiating with higher production value (e.g. Million Arthur, which leveraged famous anime voice-actors) and/or IP tie-ins to create that initial draw, but I’m skeptical that players will continue to enjoy products in this space after engaging deeply with one product and breaking from it.

This brings my rather unfocused post to the other elephant in the room – Blizzard’s Hearthstone. This game has all the signs of being a massive mobile card game, despite only beta-testing on PC/Mac so far. Ironically, I get this confidence from playing the Chinese rip-off of Hearthstone which Blizzard has just taken action against. It has the right type of session length, onboarding accessibility, and gameplay depth. And it leverages a very familiar IP. (I do think there’s a lesson or two Blizzard could learn from the Chinese rip-off, especially the small client-size which I do think is a big deal on mobile.)

In short – Hearthstone may be the first massively popular “hardcore” game that is truly achieves cross-platform parity between mobile and PC/console (I’m discounting ports like XCOM because the mobile experience still has some issues). As more and more games figure this out, it may incidentally accelerate the decline of PC gaming. Once hardcore gamers form the habit of gaming on mobile, it will be harder to lure them back to PC/console experiences (demanding even higher production costs etc., which may break economics). All of this is just speculation at this point, but dramatic gaming engagement shifts may be coming.

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The making of Diablo

I came across this gem of a book recently via video-games industry veteran Pat Wyatt’s blog. It’s a breeze to read and I finished the main chapters in a day (I say main chapters, as the book takes cues from its subject matter and contains a ton of optional extra reading).

The book is mainly a behind-the-scenes account of how Diablo came to life. I consider Diablo to be one of the best games I’ve ever played, and it has a permanent place in my childhood. As a personal side story, it was one of the few games that I bought a legal copy of growing up in China – I pooled together 160RMB (~$20 at the exchange rate back then) with two friends and we rode our bicycles to the burgeoning Zhongguancun area (now a renowned high-tech hub) in Beijing to buy the box.

The making of Diablo has a distinct Silicon Valley feel to it – not unlike the other stories from the west coast of how iconic tech brands had very humble beginnings. While Silicon & Synapse (the start of Blizzard) and Condor (the start of Blizzard North) did not literally begin in garages, these two companies were incredibly scrappy and were often fighting to make payroll. And then there’s also the part of overnight riches (due to buy-outs) and how the spoils were shared (or not shared) with the employees.

But mostly, the book is about video-games development – an endeavor that is a mix of traditional software development and a creative effort (like writing a novel or making a film). The Diablo that players loved was a very different beast from its original design document, and that’s a good thing – the fascinating twists and turns of how the product came to be is inspiring and showcases the amazing things that can happen when a group of people share a common vision and passion.

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Should Nokia have gone with Android?

Ben Thompson writing at Stratechery has a new post today on BlackBerry and Nokia. In the post he argues that both companies should have opted into Android, and that had they done so, the Android landscape could very possibly look dramatically different (with Nokia as the clear leader, and BlackBerry holding on to their enterprise segment).

Nokia’s “burning platform” decision in Feb 2011 will likely be classic tech strategy case study material (if not already). In the 2.5 years since that fateful decision, Nokia Lumia has sold a bit more than 25 million units (according to Wikipedia), with 7.4MM in Q2 2013. By comparison Apple sold 31MM iPhones in its latest quarter, so it’s fair to say that Nokia’s Windows strategy probably hasn’t been as successful as they envisioned.

Having said that, I do have some doubts over Stratechery’s assertion that Nokia could have dominated Android like Samsung is doing so today:

  • By the Feb 2011 point, Samsung had already sold 10MM Galaxy S phones (in 2010), and a few months away from launching the Galaxy SII. Nokia’s first Lumia phone would only come in Nov 2011. In short, Samsung had already found its formula in Android, while Nokia would be in discovery mode
  • Unfortunately for Nokia, the iOS/Android smartphone era is the first mobile revolution that was started in Silicon Valley, unlike previous chapters in mobile history. The US market suddenly became the world leader in mobile innovation (you can measure it by app ecosystem revenue etc.), and this is a market that Nokia had neglected for almost a decade. Trying to regain a foothold in this market, whether with Android or Windows Phone, is going to be an uphill battle
  • In the iOS / Android era, hardware is not a differentiating factor. This is why every branded Android vendor tries to tack on their own software tweaks and/or even services. Nokia’s previous success relied on high quality hardware with memorable features (a great camera, great support for music etc.), and these strengths don’t come into play if it became an Android vendor. Going with Windows was an act of differentiation – Nokia is the majority Windows vendor with 80% share
  • Unlike the other industries that Stratechery related to (PC and console), the mobile industry has a giant elephant in the room – carriers. This is why I think there is room for a 3rd (or even 4th) platform, because there will be carriers that will give it enough distribution to survive. Furthermore, for an established horizontal service (e.g. Netflix), while the introduction of a new platform means additional cost, it is also a raising the barrier to entry for its competitors (as well as improving leverage against the existing platform owners), so the big services (Netflix, Facebook) would gladly jump in bed with the new platform
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Microsoft’s future

I don’t think I’ve ever written a post on Microsoft (it’s usually Apple or Google), but the past 10 days they’ve certainly been interesting to watch.

First off, Microsoft announced a major corporate restructuring and strategy update. For a company of its size, this is certainly not a trivial matter. What was interesting to me was how similar in theme the restructuring strategy had with some recent discussions on Asymco about functional vs. divisional organizations:

Horace Dediu’s core argument is that a functional organization is better at creating and responding to disruptive innovation, as opposed to a divisional organization. The divisional organization is symbolized by old Microsoft, with large business units with independent P&Ls, whereas the functional organization is best represented by Apple – there are products, but no product P&Ls, and resources are organized by functional expertise (engineering, marketing, etc.) and allocated to different products/projects based on strategic vision. With these analyses in mind, the Microsoft reorg looks promising on paper – it is meant to tear down walls internally, so that the company can reorganize itself around future growth initiatives, instead of clinging on to dying (slowly) cash-cows. Obviously, the reorg will not happen overnight, and results won’t show at least a few years down the road (if you think of initiating a new project from scratch).

The other interesting piece is Ben Evans’ blog post, The irrelevance of Microsoft. The charts are compelling, especially this one:

In classic strategy terms Microsoft is a horizontal integration player (while Apple is the typical vertical integration player). Therefore it is truly alarming (for Microsoft) to see its share of platforms drop from a monopoly status (which is the end-goal for any horizontal play, and a key criteria for generating profits for that strategy) to something similar to a vertical integration player (which can be perfectly healthy and profitable with 20% share). Given how Android has the lion’s share of that chart now, and the fact that Android is a free beast (both price and otherwise) that Google doesn’t have strong control over, it seems a renewed horizontal strategy from Microsoft would have some really steep hurdles. I wouldn’t be surprised if Microsoft goes down a more vertical path.

There are, of course, silver linings. Freed from internal pressure from other divisions, there’s no reason why Office cannot extend to both web and mobile leveraging its own network effects, and continue to be a lucrative cash-cow as the monopoly player in the productivity space. Xbox + Kinect are a strong contender for control of the living room (despite some of the initial gaffes with the Xbox One). And Windows Phone does enjoy some Machiavellian benefits as the third platform in mobile – it will continue to get support from telcos who want to limit Android/iOS.

Microsoft is diversified enough that it will have some time to figure out its relevance in the post-PC era. And even if it doesn’t, it will still be around for a while (at least in tech time – a decade in tech feels like an eternity). Let’s see how this plays out.

 

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The Waiting Game

Reuters had an interesting article yesterday over NTT DoCoMo – Apple negotiations over the iPhone. While reports of tense negotiations between Apple and carriers are nothing new (China Mobile pops up in the news every few months about its tough stance to Apple), I thought there were a couple of juicy bits worth pondering on from the DoCoMo article.

First, one of the sticking points of the discussion is apparently DoCoMo’s dilemma over its range of value-added-services (VAS). This is not surprising. DoCoMo was revolutionary back in the day with i-mode, which was a textbook example of a successful carrier strategy in mobile internet (so much so that a MBA case is one of the first results in a google search on i-mode). What DoCoMo was able to market with i-mode (and get people to adopt) was often considered far ahead of its time, so much so that when the iPhone first launched, quite a few people used Japan to point out that the iPhone is not “revolutionary” (see this counternotions blog referencing this).

What’s interesting to me here is one walled garden (DoCoMo’s VAS) being disrupted by another walled garden (Apple’s iPhone). The point is not that Apple is more open (it certainly is, at the App Store layer), and therefore it is winning (a big part of the iPhone’s appeal is its app ecosystem); the point is how Apple is leveraging “open-ness” at one layer to succeed with a “closed” business model. Furthermore, it certainly isn’t surprising how DoCoMo is trying to leverage Android (a far more open OS than iOS) to defend its extremely closed business model; unfortunately Japanese consumers don’t seem that engaged.

As an aside, I don’t want to use this as proof that carriers can never get services right – I don’t believe in such business inevitability (similar to how I don’t believe in “Open>Closed”). But there’s a host of organizational challenges (carriers are not known more fast moving and disrupting themselves), which is why most commentators would say “it’s not in their DNA”. I do understand the carriers’ perpetual fear of becoming just a “dumb pipe” – by definition of which they will be undifferentiated, which drives profitability down – so I think some of them will just keep trying, and a few may succeed with a deeply vertically integrated model.

Second, the Reuters article had this paragraph which I couldn’t resist commenting on:

DoCoMo’s requirement that its company logo be imprinted on all its devices also conflicts with style-conscious Apple’s insistence that its products be left as manufactured.

I would argue that this has nothing (well, almost nothing) to do with style and everything to do with brand and market power. The point is not that adding carrier logos would make the iPhone ugly; the point is this is a symbolic fight over who owns the customer – as in, did the customer buy the iPhone because of DoCoMo or because of Apple, and which brand does the customer have more affinity towards? As a reminder, a couple of years ago, Verizon had the exact same argument with Apple, and this was the result.

Some final thoughts: in this big waiting game, I think it’s a lose-lose game for the hold-out carriers (DoCoMo / China Mobile) and Apple, with clear value left on the table; however, the alternative scenario is not necessarily a win-win but quite possibly a win-lose, which is why the parties seem happy to play it out.  DoCoMo is happy to bleed customers if it thinks it can extract more value from preserving its VAS with its remaining customers; and Apple does not want to budge on handset subsidies and other points (it seems happy to pay the opportunity cost in market share for unit profitability). China Mobile seems to be an even bigger hold-out (and thinks it will have a better hand the longer it waits), as recent news indicates.

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On PRISM and the NSA leaks, part 2

The Edward Snowden story has continued to develop over the past couple of weeks, both in terms of new revelations of U.S. (and allies) surveillance / hacking, as well as Snowden’s personal future.

On the new revelations front, SCMP has been able to claim a series of exclusives, especially around U.S. hacking of China -

Obviously, these stories don’t help the U.S. government’s negotiations with China over hacking that goes the other direction, and not surprisingly some critics of Snowden would label him a traitor in response. However, I think it’s certainly in the U.S. public’s interests to know what activities (legal or otherwise) their government is up to; and furthermore it’s better for the World Wide Web as a whole if we know more of government-sponsored large-scale hacking (and massive intrusion of privacy), regardless of what political system (democratic or not) the government in question employs.

Meanwhile, The Guardian unveiled two new documents that show how the U.S. intelligence agencies filter out data that belongs to people in the States. Or rather, how weak those supposed protections are – for example, if you use Tor or other encryption/anonymity software you qualify as a non-US person and your data can be stored in the intel databases. And certainly all these checks and balances mean nothing for people in other parts of world. It’s also probably a giant step backwards for democracy as a whole, when you can call on your allies to spy on your citizens and vice versa (UK’s GCHQ and the NSA working hand in hand).

Regarding Snowden himself, he’s certainly made the weekend busy for journalists with his flight to Moscow and his asylum application to Ecuador. There was no shortage of popcorn entertainment – The Hong Kong SAR government was happy to point the middle finger at the U.S. in their official statement, while Russia was probably grinning as well; the US apparently made remarks about repercussions to both these governments down the road.

Looking ahead, there are probably some new pieces of classified information with big implications to look forward to, and Snowden’s personal fate will provide plenty of soap opera. However, at this point the broad strokes of the scale and reach of the U.S. government’s cyber-spying has been painted, and I’m more interested in what concrete changes can be made, both in the US and internationally. The pessimist in me says it may just be business as usual (the track record of U.S. politics in recent years on real change is disappointing – just look at Wall Street). But this is too important a topic to be “business as usual” – coming from a country where it’s far easier to witness the dark side of unrestricted surveillance and the lack of rule of law, I believe I can see the end of the slippery slope better than most of my American friends, and it’s not pretty (spoiler – it’s a cliff).

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