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| Welcome to Inside Tech! Here are today's top stories: - Fortnite maker Epic Games is cutting 16% of its workforce.
- Disney Plus will begin cracking down on password sharing in Canada.
- Canalys data shows possible rebound in the U.S. PC market.
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p/beth-duckett | |
| 1 | | Epic Games is reducing its workforce by 16%, impacting 830 employees, as part of a larger cost-cutting move. The "Fortnite" developer also plans to divest Bandcamp, its music platform, and spin off the majority of SuperAwesome, its "kid-tech" company. More: - In a memo, CEO Tim Sweeney explained that the company had been overspending in the pursuit of growth and the metaverse.
- Epic already reduced expenses by cutting marketing and events but ultimately decided that layoffs were needed for financial stability, he wrote.
- The company is now selling Bandcamp, its music platform acquired last year, to Songtradr, a music licensing platform.
- Its advertising business for SuperAwesome, which offers kid-friendly services, will also become an independent company under the same SuperAwesome brand.
- The company said its main priority is now delivering the upcoming Fortnite Season and Fortnite Chapter 5, as well as its projects codenamed Del Mar, Sparks, and Juno.
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| 2 | | Disney will begin its password-sharing crackdown for streaming services on Nov. 1 in Canada. Last month, Disney CEO Bob Iger said the company was actively exploring solutions to tackle account-sharing among Disney Plus subscribers. More: - In a new email to Canadian subscribers, Disney announced restrictions on sharing an account or login credentials beyond the subscriber's household.
- The Canadian subscriber agreement now includes an "account sharing" section, saying that failure to comply would result in account restrictions or even termination.
- The company didn't specify plans to limit password sharing in other markets.
Zoom out: - Starting Oct. 12, Disney is also raising the prices of its ad-free subscription plans of Disney+ and Hulu.
- The moves are expected to boost revenue after Disney reported fiscal Q3 streaming losses of $512B, about half the $1.1B loss from a year earlier.
Q: How do you think Disney's crackdown could impact the competitive landscape of streaming services? Join the conversation here. | | | |
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| 3 | The latest Canalys data reveals a positive trend in the U.S. PC market, with a modest 6% decline in total PC shipments in Q2 2023. This was a "significant improvement" compared to earlier quarters, a sign that the PC market is poised to rebound following the post-pandemic slump, according to Canalys. 
What the numbers show: In Q2 2023, notebook shipments dropped by 4%, totaling 15.2 million units, partly offset by higher demand for Chromebooks in education. Chromebook shipments reached 4.7 million units, the highest level since early 2021. Meanwhile, desktop shipments fell by 12% to 3 million units, and the tablet market decreased by 5% to 10.3 million units. Ishan Dutt, Principal Analyst at Canalys, attributed the promising Q2 figures to factors like cleared channel inventories, increased demand from education, federal funding, and ChromeOS licensing changes. What's next: While still a decline, the data suggests a possible turning point in the PC market, with growth expected in 2024 and 2025. Canalys forecasts a slight 4% decline in Q3 2023 but anticipates strong 12% growth in Q4, bolstered by a more favorable macroeconomic landscape, the Windows 11 tranisition, and more AI-capable PCs. The longer-term outlook is more optimistic, with 9% growth expected in 2024 and 12% in 2025. | | | |
| 4 | | Apple has asked the U.S. Supreme Court to overturn a 2021 court ruling that would alter its App Store policies, focusing on the part of the dispute that favored Epic Games. Meanwhile, Epic has also requested the Supreme Court to review part of the case that favored Apple. More: - In 2021, Epic lost most of its antitrust trial against Apple, with the court ruling in Apple's favor on nine out of 10 counts.
- That lower court's order forces changes to Apple's App Store rules, allowing app developers to direct users to alternative payment methods, bypassing Apple's up to 30% revenue cut.
- Apple is now asking the Supreme Court to review that one anti-steering count that it lost.
Zoom out: - Apple' request comes a day after Epic appealed to the U.S. Supreme Court to review the 2021 ruling that cleared Apple of antitrust violations.
- The Supreme Court will determine in the coming months if it will consider Epic's and Apple's appeals. If neither petition is accepted, the previous rulings will remain in effect.
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| 5 | Meta introduced new AI services at its Connect event, including an AI assistant and chatbot for WhatsApp, Facebook Messenger, and Instagram. The company is also launching 28 AI characters across messaging apps, featuring celebrities like Charli D'Amelio, MrBeast, Snoop Dogg, and Paris Hilton. More: - Meta AI, currently in beta, is an advanced conversational assistant.
- It provides real-time information through a partnership with Microsoft Bing and includes an image generation tool using Meta's Emu model.
- The company is also adding 28 other AI chatbots to its services, each with unique backstories and personalities, some portrayed by cultural icons and influencers.
- For instance, Tom Brady becomes Bru, a "wisecracking sports debater who pulls no punches," and Dwyane Wade becomes Victor, an "Ironman triathlete motivating you to be your best self."
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| 6 | OpenAI, the maker of ChatGPT, is currently in discussions for a potential share sale that could place the company's valuation at as much as $90B. The valuation would mark significant increase from its valuation of nearly $30B earlier this year. More: - OpenAI has reportedly started pitching the deal to investors.
- According to the Wall Street Journal, the deal is expected to allow OpenAI employees to sell their shares rather than the company issuing new ones.
- If finalized, it would be OpenAI's second major secondary share sale. Earlier this year, the company closed a $300M share sale at a $27B-$29B valuation.
Zoom out: - The news come after OpenAI said it anticipates generating $1B in revenue this year and several billion more in the following year.
- Its revenue primarily comes from user fees for ChatGPT and licensing its large language models to businesses.
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| 7 | | Quick Hits: - No-code development is here to stay according to industry experts. Gartner predicts 80% of technology products will be built by those who are not IT professionals by 2024.*
- GameStop has appointed billionaire activist investor Ryan Cohen as CEO, chairman, and president without a salary, following the firing of former CEO Matthew Furlong in June.
- The SEC is nearing settlements with around two dozen Wall Street firms, including Carlyle Group, Apollo Global Management, and Blackstone, over their use of private messaging apps like WhatsApp for official discussions.
- The U.S. Army has granted Palantir Technologies a contract worth up to $250M for AI and machine learning research through 2026, with order-specific details yet to be finalized.
- NEXT WEEK in LA, redefine development at DockerCon! Use DCHALF for 50% off in-person registration, or participate online for free. Come learn with us!*
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INSIDE TECH LEADERBOARD (7 DAYS) |
 | AI and technology writer | | Beth is the writer of Inside's AI and Tech newsletters, with a career spanning journalism and editing since 2007. She has written for publications including The Arizona Republic, USA Today, and others, and authored a book on the solar industry in 2016. Reach out to her at Beth.Duckett@yahoo.com. | | This newsletter was edited by Eduardo Garcia | |
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