Big Tech’s obsession with cars is all about taking your eyes off …

Big Tech’s obsession with cars is all about taking your eyes off …

At first glance, Apple Inc., Google, and other tech giants’ entry into the automotive world doesn’t seem to be particularly lucrative.

Manufacturing a car requires factories, equipment, and the military to design and assemble large chunks of steel, plastic, and glass. Other than that, it guarantees slimmer profits. According to data compiled by Bloomberg, the world’s top 10 automakers will have an operating margin of only 5.2% in 2020, just a fraction of the 34% enjoyed by tech leaders.

But for Apple and other giants who are jumping into self-driving technology or making grand plans for private cars, the impetus is not only to enter new markets, but also to protect valuable grass. ..

“Why are tech companies driving autonomous driving? Chris Gerdes, co-director of the Stanford University Automotive Research Center, said:” There are business models that people are unaware of. . “

The market, which is projected to exceed $ 2 trillion by 2030, cannot be ignored. By then, more than 58 million vehicles worldwide are expected to drive private cars. And Big Tech has the means to disrupt this 100-year-old industry, from artificial intelligence and large amounts of data to chip manufacturing and engineering.

At stake is, in essence, even more valuable than profitability. That is, the last unbilled corner that catches the consumer’s attention during the awakening time.

Especially in the United States, the time people spend in cars is important. According to the latest data available from the AAA Automobile Association, Americans continued to drive 307.8 hours in 2016, or about 6 hours a week.

BAIC Group’s Arcfox Alpha-S Electric Sedan during unveiling event in Shanghai | Bloomberg

This is a significant part of someone’s life, not using the app on the iPhone, searching on Google, or unknowingly scrolling Instagram. Any company that can free that time in a meaningful way will have a good chance of catching it.

Don’t miss the world’s relentless shift to eco-friendly intelligent cars. There are many studies showing that combustion locomotives are on the path of dinosaurs, if the government has not yet declared a carbon-neutral plan, in some cases by the end of the last decade.

BloombergNEF’s annual electric vehicle outlook, released earlier this month, estimates that global oil demand from all road transport will peak in just six years, assuming no new policy measures are introduced. By 2025, EVs will reach 10% of global passenger car sales, rising to 28% in 2030 and 58% in 2040. Ultimately, self-driving cars will completely reshape the automotive and freight markets.

Against this background, it’s no wonder that tech companies are stepping up their activities and investments after years of scraping self-driving cars.

Self-driving cars are only as good as the human drivers they have learned. Therefore, the people who teach these systems need to be good drivers themselves.

Bloomberg reports that over the past few months, it has prioritized Apple Car’s plans after previously focusing on the manufacture of self-driving systems. It fuels fierce speculation about the automakers and suppliers that the company behind the iPhone may partner to realize that vision. Apple recently lost several top managers on the project, but there are still hundreds of engineers in the larger automotive group.

There is also Waymo. Waymo is in talks to raise $ 4 billion in funding to accelerate its efforts. Founded in 2009, the business, formerly Google’s self-driving car project, was the first company to drive completely autonomously on public roads. Alphabet Inc, Google’s parent company. Under, it became an independent company in 2017, launched self-driving ride-hailing services in Phoenix in 2018, and began testing self-driving trucks in New Mexico and Texas last year.

Microsoft Corp. has also partnered with Volkswagen AG on self-driving car software to support several autonomous initiatives, perhaps aimed at creating offices on the go.

Zoox self-driving car at headquarters in California | Bloomberg
Zoox self-driving car at headquarters in California | Bloomberg

Meanwhile, Inc. lags behind Rivian Automotive Inc., which manufactures electric trucks, and last year, unmanned driving startup Zoox Inc. Was acquired. It may appear to include self-driving cars as part of the Prime membership program.

Professor Raj Rajkumar, who heads the Institute of Robotics at Carnegie Mellon University, said: “From their business point of view, if you don’t, someone else can and will probably do so, and eventually your current area of ​​influence will disappear.”

Apple has dominated phones, tablets and smartwatches for decades and has fought a decent battle for computers, but now Google and Amazon are leading the areas of artificial intelligence, voice and smart speakers. So I’m behind.

The company will benefit from the release of groundbreaking new products. While successful with watches released in 2015 and services such as Apple TV, Apple Arcade, and Apple Music, which are now major new sources of revenue, nothing approaches the success of the redefined iPhone. .. Throughout the industry, it has become Apple’s most profitable product since its release in 2007.

At Google, executives have long built investments in self-driving cars as a risk that venture capital and low-financial companies don’t or don’t take. Waymo discusses potential business models for taxi services and long-distance logistics.

The onslaught is that incumbents in the car are fighting. Industry giants such as Ford Motor Company, General Motors and Toyota Motor Co. are stepping up their own rivalry in autonomous driving.Japanese car makers Build the entire city Focusing on autonomous driving at the foot of Mt. Fuji, while Hyundai Motor of South Korea manufactures EVs in the United States and invests $ 7.4 billion to develop unmanned flight taxis.

In China, it’s the largest tech company throwing their hats into the ring. Huawei Technologies Co. From Baidu Inc. The giants have promised to invest about $ 19 billion in electric and self-driving car ventures this year alone. Smartphone giant Xiaomi Corp. And even Apple’s Taiwanese manufacturing partner Foxconn have joined the battle, formed a partnership and announced their own car manufacturing plans.

We understand the automakers who protect their territory, but Mr. Takehito Sumikawa, a partner of McKinsey & Company’s Tokyo office and advice on future mobility, said that technology providers will not enter the autonomous driving space. It’s a “natural extension”. “I’m sure they can do a better job in disrupting the industry.”

Existing businesses at Amazon, Apple, and Google already need to be proficient in AI, process large amounts of data, and design complex systems. Basically, we have upfront investments in the core technologies needed to design and manufacture self-driving cars, and many engineers are keen to solve more complex problems, not to mention the willingness to mess up.

But perhaps one of the clearest examples of tech companies with the ability to change their own springboard is Amazon. Web retailers will benefit greatly from the low cost of delivering packages home using their own car.

Amazon also has a habit of transforming its tools into businesses that can be sold to a wider range of customers, as in the case of cloud computing, which was originally created to support its online retail operations. Amazon Web Services, morphing into the computing and data storage platforms used by Netflix Inc., the US government, and others, is currently a $ 45.4 billion company.

The coronavirus pandemic temporarily weakened consumers’ desire for new cars, but demand surged. The shortage of semiconductors means that many traditional players cannot keep their production lines running fast enough. This year alone, the global automotive market is projected to grow 9.7% to $ 2.7 trillion, according to IBIS World.

“Even for companies like Apple and Google, this is a huge market,” Rajkumar said. “CFOs and CEOs are literally drooling, because starters are likely to have a big advantage. Each of these companies wants to be a predator, not a prey. I am. “

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Sony’s obsession with blockbusters arouses anxiety …

Sony’s obsession with blockbusters arouses anxiety …

Sony Corporation’s Visual Arts Service Group was the shadow hero of many hit PlayStation video games.

San Diego-based operations help finish games designed in other Sony-owned studios with animation, art, or other content and development. But about three years ago, a few influential figures in the Visual Arts Services Group did not support actors with popular titles such as Spider-Man and Uncharted, but rather more creative control and games. I wanted to guide the direction of.

Michael Mumbauer, who took over the command of the Visual Arts Services Group in 2007, hired a group of about 30 developers from in-house and nearby game studios to form a new development unit within Sony. Did. The idea was to extend some of the company’s most successful franchises, and the team began working on a remake of the 2013 hit The Last of Us for the PlayStation 5. However, Sony did not fully acknowledge the team’s existence or provide the necessary funding and support to succeed in the highly competitive video game market, according to people familiar with the matter.

The studio never had its own name. Instead, Sony has transferred ownership of The Last of Us’ remake to Naughty Dog, the original creator of Sony’s own studio behind many of its best-selling games and the HBO TV series under development. ..

According to an interview with eight people familiar with the operation, the leaders of the contracted small group were significantly disbanded. Many, including Mumbauer, have left the company altogether. Mumbauer declined to comment, asking others not to give names to discuss personal information. Sony representatives declined to provide comments or interviews.

The team’s failure highlights the complex hierarchy of video game development, especially Sony’s conservative approach to creating games for the PlayStation 5. The Tokyo-based conglomerate owns about 12 studios around the world as part of the PlayStation Studios label, but for years nowadays it has prioritized games made by the most successful developers. It was. Studios such as Santa Monica, California-based Naughty Dog, and Amsterdam-based Guerrilla Games are spending tens of millions of dollars on making games in the hope that their investment will pay off dramatically. And they usually do.

Hits such as God of War in 2018 and The Last of Us Part II in 2020 are dedicated to PlayStation consoles and have helped Sony sell about 114 million PS4s. Rival Microsoft Corp. Takes the opposite approach and relies on various studios to offer the Xbox Game Pass, a subscription service like Netflix. This allows users to pay a monthly fee for unlimited access to a variety of games. Sony’s focus on exclusive blockbusters comes at the expense of niche teams and studios within the PlayStation organization, resulting in high turnover and fewer player choices.

Recently, Sony has reorganized its development office in Japan. As a result, a large number of people working on lesser-known but acclaimed games, such as Gravity Rush and Everybody’s Golf, have left. Bloomberg reportedly told developers that they no longer want to make small games that only succeed in Japan.

Recently, Sony has reorganized its development office in Japan. As a result, a large number of people working on lesser-known but acclaimed games, such as Gravity Rush and Everybody’s Golf, have left. | Reuters

This insistence on the hit-producing team is causing anxiety throughout Sony’s game studio portfolio. According to people familiar with the proposal, Oregon-based Sony Bend, best known for the 2019 open-world action game Days Gone, tried to market the sequel to the year but failed. The first game was profitable, but its development took time and critics responded mixedly. As a result, Days Gone 2 was not considered a viable option.

Instead, one team in the studio was assigned to assist Naughty Dog in a multiplayer game, and a second group was assigned to work on a new Uncharted game under the supervision of Naughty Dog. Some staff, including Topreed, left with dissatisfaction with the arrangement. Bend developers were afraid they might be crazy about Naughty Dogs, and the studio leadership called for them to leave the Uncharted project. They heard their wishes last month and are now working on their own new game that will be part of a brand new franchise.

Emphasizing big hits can also be counterproductive. This is because games that start with small games can be very successful. In 2020, Sony didn’t put much marketing effort behind Dreams, a quirky video game creation system with Media Molecule owned by PlayStation in the UK. As a result, PlayStation may have missed its own version of Roblox, a similar video game. tool. Parent company Roblox Corp. Was released earlier this year and is currently worth $ 45 billion.

Mumbauer and his crew wanted to market something popular to Sony’s boss in their first solo project. Recognizing the risks and costs associated with developing a new game from scratch, they decided to focus on rebuilding the old game for the new PlayStation 5. Remakes are considered a safe bet because they are cheaper than updating and polishing old games from scratch. Scratch, and they can be sold to both nostalgic old fans and curious new fans.

The team initially planned to remake the first Uncharted game released by Naughty Dog in 2007. The idea quickly failed because it was expensive and had too much additional design work. Instead, the team settled on a remake of Naughty Dog’s 2013 melancholic zombie hit, The Last of Us.

Employees will prepare a new Sony PlayStation 5 game console for their customers on the first day of launch at the Kawasaki electronics store in November.  | AFP-JIJI
Employees will prepare a new Sony PlayStation 5 game console for their customers on the first day of launch at the Kawasaki electronics store in November. | AFP-JIJI

At the time, Naughty Dog was in the process of developing The Last of Us Part II, a sequel that introduced more faithful graphics and new gameplay features. If the Mumbauer crew recreates the first game with a similar look and feel, the two games can be packaged together for the PlayStation 5. In theory, The Last of Us is more modern, and it’s a cheaper proposal than recreating Uncharted. You don’t need to overhaul too much gameplay. Later, when the Mumbauer group was established, the first Uncharted games and other titles could be remade.

However, the original development team “has various levels of experience and success, competing with hundreds of other teams around the world,” so creating your own game from the finishing touches of other games. Conversion to is difficult. Galaxy Studios has been a support team and development studio.

“People who fund work often hate risk. Some people have to choose between the team that did it before or the one who is trying to do it for the first time. Sees why he chooses a former developer than the latter, “he said.

That’s what Sony did. The Mumbauer project, codenamed T1X, was approved during the trial period, but Sony refused to keep the team secret and budget to hire more people. Build a new studio. Still, the small team continued to work and by the spring of 2019, completed a section of the game designed to show what the rest of the team would look like.

At that time, Sony was undergoing a change of management and the new boss was not impressed. Hermenhalst, former head of Guerrilla Games, was appointed head of PlayStation’s Worldwide Studios in November 2019. According to people familiar with the matter, the remake project was considered too expensive and asked why the T1X’s planned budget was so high. Than the remakes Sony made in the past. The reason is that it used a brand new graphics engine for the PlayStation 5. Mumbauer needed to hire more people to recreate graphics with new technology and redesign the gameplay mechanics. Furst wasn’t convinced, people said.

Hits, including Spider-Man, are exclusive to the PlayStation console, helping Sony sell about 114 million PS4s. | Reuters
Hits, including Spider-Man, are exclusive to the PlayStation console, helping Sony sell about 114 million PS4s. | Reuters

Just as I wanted to start working on a remake of The Last of Us, Mumbauer’s team was asked for help when another big guy was late. The release of The Last of Us Part II was pushed from 2019 to 2020, and Naughty Dog needed a Visual Arts service group to hone it.

Most of Mumbauer’s team, along with some 200 other staff members from the Visual Arts Services Group, were assigned to support Naughty Dog and slowed the progress of their own games. After that, the role was reversed. Sony has said that after the completion of The Last of Us Part II, some people at Naughty Dog will be able to help with the T1X. The Mumbauer team considered this a deprivation of their short-lived autonomy. Dozens of Naughty Dog staff participated in the project, some actually working on the original The Last of Us, with a focus on discussing the direction of the T1X. The game was run under the budget of Naughty Dog, where Sony had more room than the Visual Arts service group.

Soon it became clear that Naughty Dog was in charge, and the dynamics returned to the state of the last decade and a half. The Visual Arts Support Group did not lead, but assisted another team of developers.

For Sony, this move makes sense. Bloomberg Intelligence analyst Matthew Canterman said Naughty Dog is “one of the key studios” in Sony’s ability to sell PlayStation. “Sony’s competitive advantage has always been exclusive content to Microsoft, and more new games and remakes of classic titles from such renowned teams will help keep the PS5 in demand. . “

But those who wanted independence were disappointed. By the end of 2020, most of the top staff on the T1X team had left, including Mumbauer and game director David Hall. The T1X project is currently under development at Naughty Dog with the support of Sony’s Visual Arts Support Group. The future of the rest of Mumbauer’s team, who jokingly became known as Naughty Dog South, remains uncertain.

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