Your image of yourself

We all think we are someone who we often are not, liberate yourself from that.

We all have an image of ourselves that we have constructed in our minds. 

I had this image of myself as being that person who loves to play the piano and would imagine myself playing fluently on a keyboard or a piano. Because of this image of myself, I not only spent money on buying a keyboard but also wasted space in my house to accommodate the same. The truth is that I did not need a keyboard, I needed discipline, which was lacking. 

We all are prisoners of the image that we have of ourselves. It is liberating when you realise that reality is divorced from that image. You take a lot of pressure off yourself and you are able to focus on the things that you can actually be disciplined with. 

In my case writing. 

Just take a look at the things around your house that are there just to conform with your idea of who you are. You will often find that those are the things you use the least and most certainly amass the most, to compensate for the fact that you suck at it. Here are a list of things and the excuses you offer yourself - 

Musical Instruments - I love playing, just learning it slowly.

Books - I love reading, there are just so many books I have, it is hard to make up my mind which one to start with…

Workout Equipment - I have decided that I will start exercising next year as my new year’s resolution.

Cookware - I could be the greatest chef. I am just watching a lot of videos, for now, will start making it soon.

and the list goes on…

Get rid of it.

Liberate yourself. Make the image in your mind consistent with reality.

App Store | Learning by Proxy

The App Store is under attack from those who are required to pay to use it.

In January 2007, Steve Jobs announced the iPhone at the MacWorld. The announcement would cause seismic shifts in the entire computing world, but nobody realised it at the time. In an era where Nokia was selling $150 dollar phones; a $500 phone seemed like it was meant for the nerdy enthusiast. Steve Balmer, then CEO of Microsoft laughed during an interview saying nobody would buy the device. It took that kind of confidence to ensure Microsoft had no role to play in the mobile revolution.

The success of Apple has been, in not only making the entire world accept, and buy a device at that price point; but also to refresh that device every 2 - 5 years. Within the first year of the launch, 1 Million devices had been sold.

The next year, with an intention to make the device accessible to developers, Apple launched the App Store. They created the development framework and made it possible for any developer to jump into the fray and develop software for the iPhone and monetise their skills. In the following years, they introduced the concept of In-App Purchases (IAP). Prior to the internet, software developers would develop applications to be sold once. Gaming companies sold the cartridge or CD of their games once and that was the most money they were going to get out of it. They had to also develop mini versions of the game or software called Trial versions with restrictions.

The In-App Purchase model did away with the whole thing. It made it possible for the user to download the app, try it out and then pay immediately to upgrade. For game developers, this made it possible to monetise their product at every step through virtual goods, power-ups, etc. This gave birth to a whole new economy. More importantly, it unbounded the development business.

Prior to the App Store, if you wished to develop software and distribute it, you had to hire developers, you needed to build the product, test, perfect and then figure out the distribution - offline. This was expensive and even the simplest product would require a couple of million in upfront investment to get started. The App Store took away the distribution problem. Further, since Apple had millions of iPhone customers, it was possible for app developers to sell their products to 10s of thousands of customers, if not millions of them. App prices which used to be in the range of $30 - $300 crashed to $1. This ensured more people bought and tried out the apps and many silicon valley successes were born out of this.

Source: Statista

Game Developers have been the biggest beneficiaries of the App Store economy. Developing a game is like making a movie. It could be a hit or a flop. It is a concept, a creative process; people may or may not end up liking it. Taking on that risk was not easy for game developers before the App Store. The number of games in the market has sky-rocketed after the app store. From a few dozen it peaked at about half a million games. Every tom, dick and harry could develop games. Also, Apple developed and provided powerful tools to bring the best out of those games; providing a global platform at the WWDC and the launch events for many of these developers to showcase their games.

But a decade is a long time and a lot can change in that time.

When the App Store launched in 2008, one of the rules that Steve Jobs insisted on, to be a part of their App Store, was that they used the Apple In-App Purchase (IAP) API if you wished to bill anything on the iPhone. The thinking within Apple was that since they were providing the distribution they should be able to benefit from that distribution. The company fixed its commission at 30%. Apple at the time had barely averted a near-death a decade ago and this was needed to bolster revenues and grow. Also, the distribution that Apple was providing was impossible to recreate all by themselves.

The rule while disallowing the use of any other means of paying for the apps, also forbade developers from steering the user out of the App Store. So even today if you open the Kindle app on the iPhone, you will see books which you just cannot buy. It will not tell you why OR where and how you can buy it. This may have been okay in the early days of the App Store but is a veritable dick move - today. Further, e-commerce was okay but anything which involved digital goods had to pay the commission. Take an e-book that costs $10 and has a retailer margin of $4. If they were to give 30% to Apple, Apple gets to make more money than the retailer. And what if the margin on a book is only $2?

The IAP API would store the details of the customer’s credit card on its file. It would bill the customer on behalf of the app developer and manage their subscriptions. It would also be the middle layer to clean up any fraud that takes place. And as the middle man would charge the commission. From a meagre footnote on the apple financials, the services business has grown to become a $50 Billion dollar juggernaut with a growth rate of 20% per annum.

If you take 30% of a 10 dollar transaction, nobody will bother, but if you take 30% of a 1,000,000 dollar transaction it is bound to hurt someone. Apple is taking 30% of a 200 Billion dollar app economy.

Let us start lobbying the government and troubling the courts.

It all began with a lawsuit filed by Epic Games against Apple. They wanted the courts to allow them to run their own app store on the iOS platform. This was never going to be easy to pull off.

Today, developers who list their apps in Apple’s mobile app marketplace must not only use Apple’s own payment system, but are prohibited from redirecting users to sign-up or payment pages bypassing Apple’s transaction fees. Ruling for Fortnite developer Epic Games, Judge Yvonne Gonzalez Rogers found Apple had violated California’s Unfair Competition Law, issuing a permanent injunction striking down Apple’s prohibition on external sign-up pages. The case has widely been seen as a crucial battle between developers and the mobile operating systems they rely upon. It also comes at a time when antitrust regulators in the US and around the world are looking closely at the largest US tech companies.

Apple won on all other fronts with the judge ruling that Epic breached its contract with Apple when it introduced its own payment system. Yet today’s ruling means Apple will surely lose revenue with developers who find the convenience of Apple’s system not worth its de facto tax. The company will have to change a long-held method that has previously allowed it to collect 15-30% of user payments to developers.

Source: Quartz

While the order does not grant permission to the developer to float their own distribution system on a proprietary platform, it allows what is called the Steering Clause which allows the developer to steer the buyer away from the platform if they choose to. For the developer, this can potentially mean 30% more revenue (although that would perhaps never be true - You will have to offer a discount to the user to make them do something that is harder). For Apple, this would mean a dip in the revenue that they generate through the app store.

Apple is trying to project it as a win because of - share price. Epic is trying to project this as a loss because of - the possibility of appeal. The reverse is actually true. Apple was forced to bend and Epic has won, they put an outside link in their game last year which started this fight.

From across the globe

Apple Inc will loosen App Store rules that have banned companies like Netflix Inc from providing customers a link to create a paid account to bypass Apple's in-app purchase commissions, the company said late on Wednesday.

It is the second concession to regulators and companies in less than a week as the iPhone maker faces legal, regulatory and legislative challenges to the App Store, which forms the core of its $53.8 billion services segment.

[...]

Apple said it agreed with the JFTC to let developers of those apps share a single link to their websites to help users set up and manage their accounts. Although the change is part of an agreement with the JFTC, Apple said it would be applied globally.

Source: The Hindu

The Japanese regulators have gone after the exact same provision that prohibits steering customers away from the platform.

South Korea has become the first country to impose curbs on Google and Apple's policies that force developers to only use the tech giants' proprietary billing systems.

Those policies require developers to pay Google and Apple a commission as high as 30% in every transaction.

Media reports last week said the legislation and judiciary committee of the National Assembly approved revisions of a bill aimed at stopping app store operators from forcing developers to use specific payment systems.

Source: CNBC

South Korea is also doing the same. Here it was not a judgement but a law that has been passed effecting this change in the policy.

The Alliance of Digital India Foundation (ADIF), which was formed earlier this year to protest Google’s move to impose a hefty commission for in-app purchases on its proprietary store, is of the view that there is now a “precedent” that will find resonance within government circles. The 350-member strong grouping, which counts the likes of Paytm, GOQii, Innov8 and BharatMatrimony as founding members will reengage with the new leadership at the ministry of electronics and IT (Meity), executives said.

“(Indian) companies are planning to approach the government to bring in a law like South Korea, Google and Apple are misusing their monopoly and it is hurting the startup ecosystem,” Murugavel Janakiraman, chief executive officer of BharatMatrimony, told ET.

Source: Times of India

The Indian government has a difficult needle to thread here. On the one hand, they want apple to invest in manufacturing in the country, they cannot possibly be holding a dagger behind their back at the same time. The startups are making noise nevertheless.

Why fight it?

On the one hand, there is the money that is there for the grabs. Companies like Epic have grown on the back of the distribution that Apple provides but at their scale parting with 30% of the income seems unfair. If you are turning over $1 Billion and are forced to hand over 30% for little value that is being added (today), you feel like it is scalping.

There is also the consumer protection angle to it. Gaming companies are unscrupulous when it comes to making money and manipulating kids into spending more and more on their games.

I have a 22 year-old disabled son, who has cerebral palsy, complex epilepsy, autism, learning difficulties and the approximate cognitive ability of a seven-year-old child.

He is unable to do any bilateral activities so relies heavily on his iPad and PlayStation for entertainment and educational activities.

He has recently been playing a game on his iPad called Hidden Artifacts which involves finding various items and matching them to the description.

He has been charged £3160.58 between 18 February and 30 May 2019, clearing out his entire savings.

Source: BBC

Jessica Johnson, 41, a stockbroker, did not realize while working at home from the pandemic that the youngest of her children had gone shopping with her iPad. It all happened in the month of July when George bought accessories, starting with red rings for almost two dollars, all the way to gold rings for 100 dollars. These allowed him to access new characters and more speed, so this was gradually accumulating thousands of dollars to his mother's account.

There was one day, July 9, when George racked up 25 charges totaling $ 2,500. Jessica commented to the half joking that it was "as if my 6 year old son was taking lines of cocaine, and achieving bigger and bigger hits".

Source: Entrepreneur

My 11-year-old daughter made more than 300 in-app purchases over five days on Roblox, the online games platform, resulting in a £2,400 bill on my wife’s PayPal account.

At the time, my wife was in ICU recovering from a 15-hour operation to remove a brain tumour. Incapacitated, and without access to her phone, she was unable to authorise or monitor this spending.

The first I knew about it was when our bank informed us that we had exceeded our overdraft limit.

Source: The Guardian

In a bizarre incident, a teenage boy from Punjab spent a whopping Rs 16 lakh on popular battle royale game PUBG making in-app purchases. The 17-year-old spent money from his parents’ account to buy in-game cosmetic items, artillery, passes for tournaments, and virtual ammunition. According to the parents, the money was set aside as savings for the Kharar-based boy’s father’s medical expenses.

Source: The Indian Express

I think the parents are idiots to give their kids access to accounts with that kind of money but that is beside the point. Gaming companies are some of the worst offenders when it comes to exploiting children for money. They are known to even have "account managers" assigned to specific users when they find them to be high spenders.

In the case of gaming companies, 90% of their income comes from less than 1% of their users.

Imagine having given your card to one of these companies for a subscription. Best of luck getting it cancelled. I had written more about the kind of techniques they use in the edition Dark Patterns.

This would ultimately result in a lack of consumer confidence and therefore a reduction in spending on these apps. In the meantime, get ready to see a lot of steering within apps, offering a 10% discount if you click on a link and visit an outside page to make a payment.

Content companies are the real winners here. Spotify does not allow you to buy its subscription on the app because it would be forced to part with 30% to Apple, it gives away close to 70% to the music rights holders; what is Spotify to do then? Similarly for Netflix and Kindle and Audible and many others.

Gaming companies will try their best to steer customers, but how many will jump off the platform?

Ultimately, I think this lays the groundwork for many content companies to thrive in the app ecosystem while at the same time sowing the seeds for the demise of a lot of gaming businesses.

App Store | Podcast

The App Store is under attack from those who are required to pay to use it.

  
0:00
-16:10

This is the Learning by Proxy podcast for Edition 77. If you do not enjoy reading long-form, get the gist of it in about 10 minutes (or that was the hope). 

This time in the podcast - 

The App Store is at a dangerous crossroads. The developers who grew big on the back of it want freedom from the tyranny of it. Apple believes that it can meet the needs of its customers only by keeping it the way it is.

You can find the whole blog at this link.

Music Courtesy Pixabay

Exponential Growth

Technology scales only when you can burden poor people with its shortcomings.

The common Silicon Valley refrain goes - Solve a problem and then use technology to scale it. Do not build technology and then look for problems to solve. The underlying assumption is that technology would take the burden of scaling the solution rather than throwing more people at the problem. This can help achieve exponential growth.

Technology is not perfect. If it was, a product once built would require almost no maintenance and would work perfectly without fail. When technology fails, someone is required to step in and field all of the queries and help resolve the problem. Exponential growth often comes with an exponential need to solve problems and here is where technology gives birth to inequity.

Take any SaaS company. Most SaaS solutions are software, but there are several challenges with deploying a SaaS product and integrating it with the website and other tools that any company utilises. Typically,  hundreds if not thousands are hired to provide “support”. They are some of the worst paid employees in the company. But the “Exponential” growth will not be possible without them.

Even worse is the story of companies that have a real-world interface. Take Amazon or Uber. They need the people on the street to make their delivery or ferrying possible. These are some of the worst paid people. The technology in this case is literally being used to rob those who are referred to as partners while making the few at the top rich.

The first thing Uber does is to saddle the driver with a loan for buying the car. Then there is no way to run. Most of them end up working below subsistence to pay off the EMI.

There is no exponential technology. There are companies that use technology and combine it with capitalism to legitimise turning people into slaves under the banner of job creation. 

In the meantime, the pay gap between the CEO and the average employee has widened to 30,000%. The very same CEO would be incapable of providing customer support if he was the last person left in the company.

Video Games | Learning by Proxy

We need to start calling them something else!

The first patent for Video Games was filed in Jan 1947. The Cathode Ray Tubes that had been invented to render the radar was to be used as an amusement device! There were a lot of experimental games that were launched in that era. Most remained in the lab for the purposes of demonstration. Either way, they cost so much that using them for "amusement" would have been criminal.

It was not until the 1970s that video games made a splash in the real world, in the form of arcade games. One had to go to specific arcades to play these games. Then companies like Atari, Sega, Nintendo and the likes introduced the world to console gaming. This brought gaming into the homes of people. Suddenly it was possible to sell to a much larger audience and gaming became big business.

The advent of computers in the early 90s and the widespread adoption of computers in the new millennium infused an entirely different energy and life into the gaming business. Game production studios such as Electronic Arts emerged. Games were still pursued for leisure, mostly by youngsters.

As the internet grew and its speed increased, multiplayer gaming took on a life of its own. It was possible for one player to play against another in a whole different part of the world.

There were specific things that found a lot of interest.

Open World Games - Open World is a format where you are allowed to free roam a world and find different missions or goals to pursue and different groups/people to interact with.

FPS - First Person Shooters (called FPS) for short are games where you are playing a soldier or a mercenary on a mission and have to achieve certain goals.

Strategy Games - Typically set in an open world, these games have a complex story and in that context, you need to figure out the strategy you need to pursue to win the game.

A mix of all this is Multiplayer Online Battle Arena (MOBA) - You are in an open world (arena) where you get to battle in teams with other players. This is all taking place online and a moment's hesitation can mean death!

As these games grew more sophisticated and drove much greater interest with more and more people, one of the biggest problems was data latency.

Building-out a proprietary network is a bold move for a company like Riot Games. Though fairly large by game company standards—they have over 2,000 employees—it is tiny compared to the few internet giants, such as Google or Amazon. Those companies have become known for building their own infrastructure. Google, for instance, started working with the Unity bandwidth consortium in 2008. It invested $300 million in the FASTER undersea cable network, which took two years to complete and went live this June (2016). Facebook and Microsoft have to partnered to build MAREA across the Atlantic with a 160 terabytes per second capacity, and Amazon made its first investment in a submarine cable project May 2106.

Source: Quartz

Companies have been building out dedicated internet infrastructure to reduce latency. This has spawned an entire category of gaming called e-Sports. The people who used to play video games were treated like idiot nerds once upon a time. Today they are celebrated like Olympic athletes. Thousands converge on stadiums to watch these players compete with each other in strategy games such as the league of legends that Riot Games produces. Here is what it looks like.

This is an event that took place in Paris in 2017. This movement has been slowly growing and for those who are not in the loop, it might seem completely alien.

Two teams of 5 players each, playing on stage while their gameplay is shown on a large screen to the audience. And there is a lot of money to be won.

Source: Verge

This is the prize pool for DOTA, which stands for Defence of the Ancients, a popular MOBA. The winners could potentially walk away with 10s of millions. Just for reference, the Wimbledon awards 2.35 Million pounds to the winner.

Safe to say that gaming has changed completely and is no longer the innocent Mario and Contra that we grew up with.

Gaming has become a big business that nobody has been paying attention to. The CEO of Netflix famously said that his greatest competitor was sleep. But the truth is gaming is taking a lot of the screen time and hence...

One month after its vague announcement of a new gaming-centric strategy, Netflix has explained how it will "publish" video games in the foreseeable future: as downloadable smartphone apps, available exclusively for paying video-streaming subscribers.

The news coincides with the company's public launch of Netflix Gaming on Thursday as part of the service's smartphone app... but only in Poland—and only on Android. The company's American Twitter translated Thursday's Polish announcement, which explains how the service works.

Source: Ars Technica

The recent lawsuit with Epic Games that Apple was forced to settle was also around gaming. The truth is that most of the in-app purchase (IAP) income that Apple derives comes from gaming. The services segment generates about $20 Billion in revenue for Apple and they just take between 15% and 30% as commission.

Amazon has also been making a splash in gaming. They already bought Twitch, a game streaming platform for $1 Billion a few years ago. They are leveraging that acquisition and now they want a bigger chunk of the pie,

Amazon.com Inc. is diving into the new and hotly contested market for streaming video games, the company said during a press event Thursday that also revealed a refreshed lineup of Echo smart speakers and a flying home video camera.

Luna, a service that lets gamers play without shelling out for expensive game consoles or games, is Amazon’s biggest foray yet into the fast-growing $150 billion video gaming market. A subscription to the Luna+ channel costs $5.99 a month during an introductory period and will include games such as Resident Evil 7, Control and Panzer Dragoon.

Source: Business Standard

In the meantime, fitness company Peloton which makes exercise cycles is looking to enter the gaming market. Games that can merge with their cycles and provide another layer of immersion.

Peloton is about to enter the video game business.

The cycle maker is getting ready to debut an in-app video game called Lanebreak, a spokesperson confirmed to CNBC.

The game, which Peloton cautioned is still subject to a new name, involves riders changing up their cadence and resistance levels to meet various goals and score rewards.

Lanebreak is expected to open up to a members-only beta test later this year, according to a fact sheet, and it will officially launch in early 2022. Players will be able to choose a difficulty level and the type of music they want to hear during the game. There are different ways to win points, be rewarded and challenge other members.

Source: CNBC

In this current context, you have technologies like VR and AR making a break into gaming and trying to create a niche for themselves. Apart from Microsoft, Facebook has made a huge investment in VR. They went and bought Oculus Rift for $1 Billion. The company was still to release its final product.

Facebook has been experimenting with a lot of VR experiences and none of them has succeeded. Their recent announcement to have a VR meeting where you interact with your colleagues’ avatar as a part of their "metaverse" has also not been received well. They hope that they would be able to use the gaming market and make a break!

Facebook is the latest tech giant to get into the world of cloud gaming — but the company’s offering is quite a bit different than the competition. Unlike Amazon or Google, which both offer standalone cloud gaming services for a fee, Facebook is introducing cloud games to its existing app — several of which are playable right now.

“We’re doing free-to-play games, we’re doing games that are latency-tolerant, at least to start,” says Jason Rubin, Facebook’s vice president of play. “We’re not promising 4K, 60fps, so you pay us $6.99 per month. We’re not trying to get you to buy a piece of hardware, like a controller.”

Source: Verge

While they are targeting casual gaming, their ultimate goal would be to meld VR into this somehow.

Just as smartphones introduced us to simpler games that capitalized on unique features of phones like gyroscopes and on-the-go internet connections, many newer games blur the lines between video games and other types of social activities. Pokémon Go, Fortnite and Among Us are video games, but they are also hangouts for friends, pop culture moments, opportunities for political organizing and more.

What’s thrilling about many of the newer game experiments is that they signal a move beyond a phase in which online and smartphone media often mirrored what came before — many podcasts were like talk radio, Netflix was like TV and online news outlets were like newspapers.

I know that games aren’t all stimulating paragons of human social connection, but it feels as if something exciting is happening. There’s more mushing together to arrive at new digital forms that emphasize interaction rather than passive reading, watching or listening.

Source: New York Times

What is gaming? What are video games? The answer to the question was straightforward 50 years ago. Today it does not seem to be as simple. What would it look like in 20 more years? There is a lot of money waiting to be made if you know the right answer to that question.

The Capitalistic Paradigm

Video games such as second life have attempted to make a place in your life in a manner where they imagine you living another life online. Pair that with technologies like VR, you could potentially end up living a life that is completely online. This is the kind of world that Facebook would like to envisage people living in.

And also, one which China does not want in its country.

Under the new regulations unveiled by China’s National Press and Publication Administration Aug. 30, children under 18 will not be allowed to play video games from Monday through Thursday and only between 8pm and 9pm on Friday, Saturday, and Sunday: A maximum of three hours a week. The policy only applies to online games and users will need to register using their real names and government identification.

The government has limited video game use previously, like in 2019, when it banned children from playing after 10pm and for more than 90 minutes a day. At that time, it also limited in-game spending from minors to around $57 a month. Last month, a state-run media outlet called video games “spiritual opium,” causing gaming leader Tencent and its competitors’ stock prices to fall.

Source: Quartz

Capitalists would like to keep you in an online prison from which they can continue to monetise you. Show you ads, sell you virtual goods that cost nothing and keep you slipping further into that rabbit hole. They might even go to the extent of touting this as a possible solution to global warming.

Consume virtual not real goods!

That hope has not borne fruit as yet. But the attempt to make it work continues. I hope it fails.

More importantly, we are at a juncture where games are no longer games and we should stop calling them that. They have ceased to be just a mere form of entertainment. They are thriving businesses and have the capacity to manipulate and force financial decisions. We need a new term to talk about it.

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