Improbable urges Unity to unsuspend their license, to rectify ‘farcical’ situation for developers

Improbable may be pissed at Unity, but they still want them back.

In a blog post titled “A final statement on SpatialOS and Unity,” the team at the cloud gaming startup aimed to tell their side of the story and implored Unity to “clarify their terms or unsuspend our licenses.”

Unity is a game engine that developers use to create, among other things, games. Improbable offers a cloud solution to developers that basically enables large multiplayer online gameplay by rendering the game worlds across multiple servers on its SpatialOS platform.

Yesterday, Improbable announced that Unity had terminated their game engine access and that developers that used SpatialOS were in danger of losing their work. Unity responded that live and in development games were fine and that Improbable was in violation of their new terms of service and needed to negotiate a new partnership.

In the new blog post, Improbable doesn’t mince words, saying it “still has all its Unity license and access suspended. We cannot easily fix bugs, improve the service or really support our customers without being in a legal grey area. Anyone who has ever run a live game knows this is a farcical situation that puts games at risk.”

Last night, Improbable appeared to leverage their relation with rival engine-maker Epic Games to put the heat on Unity, creating a $25 million fund with the gaming giant to help developers move to “more open engines,” a pretty transparent knock on Unity.

Improbable now seems to be claiming that Unity basically changed the rules on them and was trying to bully them into a deal that none of their other partners have requested.

“We do not require any direct technical cooperation with an engine provider to offer our services – Crytek, Epic and all other providers clearly allow interoperability without commercial arrangement with cloud platforms. We have no formal technical arrangements there and have not required any with Unity for years.”

Losing Unity support is a huge blow to Improbable, which has raised $600 million largely on the promise that it can revolutionize online gaming, something that would prove difficult to do without one of the largest available game engines.

Improbable and Epic Games establish $25M fund to help devs move to ‘more open engines’ after Unity debacle

Improbable is taking a daring step after announcing earlier today that Unity had revoked its license to operate on the popular game development engine.

The UK-based cloud gaming startup has inked a late-night press release with Unity rival Epic Games, which operates the Unreal Engine and is the creator of Fortnite, establishing a $25 million fund designed to help game developers move to “more open engines.”

An incoming blog post penned by Epic Games CEO Tim Sweeney and Improbable CEO Herman Narula reads, in part:

To assist developers who are left in limbo by the new engine and service incompatibilities that were introduced today, Epic Games and Improbable are together establishing a US $25,000,000 combined fund to help developers transition to more open engines, services, and ecosystems. This funding will come from a variety of sources including Unreal Dev Grants, Improbable developer assistance funds, and Epic Games store funding.

This is pretty bold on Improbable’s part and seems to suggest that Unity didn’t give them a call after Improbable published a blog post that signed off with, “You [Unity] are an incredibly important company and one bad day doesn’t take away from all you’ve given us. Let’s fix this for our community, you know our number.”

Unity, for its part, claims that they gave Improbable ample notice that they were in violation of their Terms of Service and that the two had been deep in a “partnership” agreement that obviously fell short. The termination of Improbable’s Unity license essentially cut them off from a huge portion of indie developers who build their stuff on Unity.

Epic Games CEO Tim Sweeney was quick to jump on the news earlier today, rebuking Unity’s actions.

“Epic Games’ partnership with Improbable, and the integration of Improbable’s cloud-based development platform SpatialOS, is based on shared values, and a shared belief in how companies should work together to support mutual customers in a straightforward, no-surprises way,” the blog post reads.

In a way this is a positive development for Improbable, suggesting that Epic Games is committed to sticking with the startup, but at the same time, one wonders how Unity and Improbable’s relationship managed to sour so quickly based on what’s been said publicly today.

Unity pulls nuclear option on cloud gaming startup Improbable, terminating game engine license

A pair of highly-funded gaming unicorns are publicly skirmishing and the deal could have major repercussions for game developers.

Today, UK-based cloud gaming startup Improbable, announced that Unity, a hugely popular game development engine, had terminated their license, effectively shutting them out from one of their top customer sources. If permanent, the license termination would be a significant blow to Improbable, which enables studios to host large online multiplayer games across multiple servers. The gaming startup has raised more than $600 million from top investors like Softbank, Andreessen Horowitz and Horizons Ventures.

Just how many Improbable customers utilize Unity as their game engine of choice through the SpatialOS GDK is unknown, but the two platforms do share some similarities in appeal among small teams looking to innovate. “Unity is a popular engine and that popularity extends to the people using our [game development kit],” an Improbable spokesperson told TechCrunch. Improbable’s SpatialOS platform also runs on the Unreal Engine and CryEngine and can be designed to work with custom engines.

So, how’d this happen?

The way Improbable told it this morning, Unity changed their Terms of Service last month and then, without warning, pulled the rug out from under them. That’s not how Unity sees it though, the company penned a terse blog post in response, alleging that Improbable was well aware that they were in violation of the ToS.

“More than a year ago, we told Improbable in person that they were in violation of our Terms of Service or EULA. Six months ago, we informed Improbable about the violation in writing. Recent actions did not come as a surprise to Improbable; in fact, they’ve known about this for many months,” the post reads.

Unity developers using SpatialOS spent the day complaining about the move and wondering whether their projects in development would have to be completely reshaped. While the folks at Improbable also seemed unsure about this detail, Unity clarified in its blog post that SpatialOS projects that were live and in production would still be supported.

Unity’s Terms of Service isn’t exactly the most lucid reading material, but the section in question titled Streaming and Cloud Gaming Restrictions seems to lay out a fairly clear rebuke of what Improbable does.

You may not directly or indirectly distribute the Unity Software, including the runtime portion of the Unity Software (the “Unity Runtime”), or your Project Content (if it incorporates the Unity Runtime) by means of streaming or broadcasting so that any portion of the Unity Software is primarily executed on or simulated by the cloud or a remote server and transmitted over the Internet or other network to end user devices without a separate license or authorization from Unity.

The vagueness of the language does seem to give Unity broad discretion to wield the hammer.

The question, then, is why Improbable seems to have been targeted. Asked for comment, a Unity spokesperson referred us to their blog post. The answer probably lies in the “partnership” that both Unity and Improbable allude they were in the process of reaching, i.e. Unity likely wanted Improbable to pay up if they were going to be hosting the Unity Runtime on Improbable servers, but the two couldn’t come to an agreement.

Epic Games CEO Tim Sweeney, whose company operates the rival Unreal Engine, seemed to rebuke Unity on Twitter, suggesting that engines need to be more transparent in the governing rules they establish.

Regardless, it now appears that Improbable realizes they may have pissed off the wrong powerful partner.

In a much more contrite blog post published later this afternoon, the team wrote, in part:

We apologize that this event we instigated has created so much uncertainty, confusion and pain for so many developers who really do not deserve this…

As a platform company, we believe humility and introspection are critical responses to the suffering of your community, however it comes about. We invite every company involved in today’s discourse to do a little of that.

We also invite Unity to participate in this broader thinking with us, whatever the outcome of our misunderstanding. You are an incredibly important company and one bad day doesn’t take away from all you’ve given us. Let’s fix this for our community, you know our number.

It sounds like Improbable became well aware throughout the course of the day that they are going to have be the ones to compromise here.

After 5 years, Sony’s PS4 is still killing it

After a successful holiday season, Sony’s PlayStation 4 is nearing some pretty wild milestones.

The company announced Monday that they had sold over 5.6 million PS4 units over the holiday season worldwide, bringing the total number of current-gen consoles sold to 91.6 million, a number that suggests the popular console is still vibrant even after five years on the market.

Microsoft has been in a losing position throughout the “console wars” and while it hasn’t released its own numbers recently, it’s estimated that the quantity of Xbox One units sold may make up just about half of what Sony has shipped this generation. Meanwhile, Nintendo has had a banner year following the success of the Switch which launched in late 2017 and has become the fastest-selling game console ever in the U.S. though the total units sold still drags far behind the much older PS4.

Beyond the hardware, Sony also delivered some statistics on title sales, saying that they sold over 50 million titles and that they have sold at least 9 million copies of the Spiderman Sony-exclusive title. A staggering 876 million PS4 games have been sold to date.

HTC teases Vive Pro with embedded eye-tracking

HTC is giving its high-end enterprise-focused Vive Pro VR headset a feature bump in the next few months that’s focused on eye-tracking.

The company has certainly been having some financial struggles recently, those issues have seemed to force the company to more firmly fix its VR efforts on enterprise markets while loosely aiming to court consumers that aren’t scared away by the higher price point.

What does eye-tracking in a VR headset enable? Well, a few things actually. The most talked about technology is called foveated rendering which basically aims to reduce how much of a VR scene one’s computer has to render at full resolution by tracking where your gaze is. This can greatly reduce system requirements if you’re sporting headsets with insanely high resolutions. It doesn’t seem like this is the focus of this HTC product — at least right now — rather HTC seems to be focusing on utilizing eye-tracking as an input method for making quicker menu selections.

It’s certainly a nice thing to have in a headset, and something that has long been expected to be an included feature in next-gen headsets. HTC’s standard Vive actually had support for an eye-tracking add-on from a ViveX portfolio company called 7invensun. That being said, eye-tracking that isn’t being used to support a ludicrously high-res display probably isn’t that much of a system seller and it’s a little odd that they would ship such an iterative product.

No details on pricing but the product is slated to ship in April, the company says.

More than 100 million Alexa devices have been sold

More than 100 million devices with Amazon’s Alexa assistant pre-installed have been sold, the company said Friday.

The new metric, revealed by Amazon devices SVP Dave Limp in an interview with The Verge, showcases just how quickly the company has crammed the voice assistant into disparate hardware devices and shoved them out the door. The company did not distinguish further how many of these items were Amazon-built Echo devices and how many were designed by third-party OEMs.

The company’s vision of encapsulating Alexa in anything with a circuit board was evident at its September hardware event where it announced more than a dozen new devices, including a clock, a microwave and some redesigns of existing products like the Echo. In the interview, Limp shares that there are more than 150 Alexa-integrated hardware devices on the market, most of which shipped in 2018.

When it comes to the 100 million number, that metric seems impressive for a platform that still seems to have so much room left to mature, but it also shows how aggressive the company has had to be to keep up with Google Assistant and Siri, which obviously have significant reach on Android and iOS, respectively. Alexa seems to occupy a more exclusive smart home presence than Google, which has managed to ship quite a few of its Google Home devices, especially the Google Home Mini.

Amazon’s low-cost Echo Dot similarly seems to be capturing the bulk of attention. The device was updated in September with a new design and a louder speaker. The company is also seeing success with hardware it hasn’t released yet; the company revealed that they’ve had more than 1 million people sign up for an invite to buy an Alexa Auto device ahead of its launch.

Boom Supersonic nabs $100M to build its Mach-2.2 commercial airliner

One Denver-based startup’s long-shot bid to move today’s commercial jets beyond supersonic speeds just got a big injection of cash.

Boom Supersonic, which is building and designing what it calls the “world’s first economically viable supersonic airliner,” announced today that they’ve closed a $100 million Series B funding round led by Emerson Capital. Other investors include Y Combinator Continuity, Caffeinated Capital, SV Angel, Sam Altman, Paul Graham, Ron Conway, Michael Marks and Greg McAdoo.

The startup has raised around $140 million to date. The team has about 100 employees today, and hopes to double that number this year with its new funding.

“Today, the time and cost of long-distance travel prevent us from connecting with far-off people and places,” said Boom CEO Blake Scholl in a statement. “Overture fares will be similar to today’s business class—widening horizons for tens of millions of travelers. Ultimately, our goal is to make high-speed flight affordable to all.”

Alongside the fund raise, Boom is further detailing its plans to begin testing its Mach-2.2 commercial airliner this year. The company is aiming to launch a 1:3 scale prototype of its planned Overture airliner this year called the XB-1. The two-seater plane will serve to validate the technologies being built for the full-sized jet.

The startup’s supersonic Overture jet will hold 55 passengers, and the team hopes that the costs of flying more than double the speed of sound will be comparable to today’s business class ticket prices. The company already has pre-orders from Virgin Group and Japan Airlines for 30 airliners .

$100 million may seem like a lot of money, but the development costs for lengthy projects like these can quickly race towards the billions of dollar suggesting that if they carry out their mission, they’re going to need a whole lot more.

Pokémon GO creator Niantic closes $190M funding round

Mobile AR gaming startup Niantic has closed a $190 million round of funding according to newly filed SEC docs.

The filing comes after a WSJ report last month suggested the company was in the process of closing a $200 million raise from investors, including IVP, aXiomatic Gaming and Samsung, at a $3.9 billion valuation. The round closed shortly after that report on December 20 according to the new documents.

With the close of this round, Niantic has now raised more than $415 million to date. The startup’s other investors include Founders Fund, Spark Capital and Alsop Louie Partners, among others. The filing details that there were 26 investors in this funding round.

The new influx of cash comes as the creator of Pokémon GO prepares to release its next major title, Harry Potter: Wizards Unite. The augmented reality game does not have a release date yet, but is expected to launch this year.

Magic Leap and other AR startups have a rough 2019 ahead of them

Very rarely does an early technology garner such an air of inevitability like AR has in the past few years.

2018 was supposed to be a year where the foundational tech for augmented reality was built out a bit and the industry took a couple big leaps. Things started off well-enough, but momentum really doesn’t seem be on the side of some of the industry’s heaviest hitters heading into 2019, suggesting that life for earlier-stage startups may not be much easier.

There are plenty of reasons to be long-term bullish on AR, but the time horizons some have espoused seems to be bogus and pitch decks organized around a near-term spike in phone-based or glasses-based users are going to have a tougher time being taken seriously in 2019.

The ghost with the most

For all of the AR advances made this year, the company most emblematic of AR’s numerous challenges was clearly Magic Leap .

The company spent the past few years trashing industry standards and lauding their own approaches with braggadocio, but ended up releasing a product that largely iterated on its competitors. With the release of their “developer kit” this year, a product that clearly seems to have stopped being a first-gen product only when the reality of the climate availed itself, the startup seems to be finding that optics and infra progress is going to come more slowly than foretold.

I’ve talked to more than a few people who think Magic Leap hindered progress in the AR industry by siphoning investor attention and discouraging other hardware startups from joining the fray in the face of a billions-backed unknown. But in 2019, there are fewer available plays for the funding juggernaut. They spent years trying to distinguish themselves from the corporate mission of Microsoft and their HoloLens headset; now it seems they’ve begun to see that the only hope of justifying their sitting valuation in the next few years is enlisting support from the big customers that MSFT is chasing, as opposed to single-handedly birthing a consumer market. Magic Leap recently lost a bid to Microsoft for a $480 million military contract to outfit troops with AR headsets, and as Microsoft prepares to release a second-generation HoloLens with the enterprise in full concentration, it seems like Magic Leap is going to reshuffle its deck.

Dead-on-arrival content plays

Magic Leap’s struggles are well-documented, but what plagues the overall AR industry seems less discussed.

The consumer appetite for phone-based AR content is obviously lacking. Even Apple’s reality distortion field isn’t enough to convince people that its ARKit releases have led to anything other than some weird experimentation for iOS users. Few Android OEMs are boasting about compatibility with Google’s ARCore platform anymore, suggesting that approachable hardware standards for device makers wasn’t all that was missing from the failed Tango brand.

The most apparent mobile AR opportunities are probably in user-generated content, but there seems to be a disconnect between platforms and users in terms of how complex these AR experiences can and should become. At this point, selfie masks still seem to be at the edge of users’ comfort levels, leaving a lot of solved tech problems stuck in limbo waiting for a problem that makes them worthwhile.

Niantic is probably one of the most revenue-heavy startups dabbling in phone AR, even if it is a bit of a false idol for the industry. Nobody seems to think of Niantic as a capital-A augmented reality startup, but it’s clear that the team behind Pokémon GO sees the technology as a not-fully-tapped reservoir of potential for future gaming experiences that feel more social and more immersive than any mobile RPG that’s sucking up the majority of your playtime today. The company’s new Harry Potter title still doesn’t have a release date, we haven’t seen any gameplay, but we do know that AR plays a part in the title in some capacity. We’ll see if they figure out things the rest of the industry hasn’t.

Platform tech opportunities

Part of this broader content pain is the fact that some known platform fundamentals are still getting tackled. In 2018, the startups in AR that were raising the most buzz were so-called “AR cloud” startups, teams that were largely focused on solving more fundamental back-end problems around localization and mapping. It turns out “simple” problems like getting a bunch of users in a single session or keeping track of objects you’ve moved around between sessions are actually incredibly complex.

A big issue is that AR fundamentally relies on a level of spatial understanding that goes far beyond grasping geometry. For all the ground that has been traversed by computer vision researchers this year, issues like segmenting environments by objects and accurately identifying them are still in the earliest stages. When you think of AR tech as a subset of vision problems, you realize that products today are being approached in a kind of bizarre manner.

Google has been making worthwhile movements in proliferating their Lens computer vision engine across new apps and devices. In a very roundabout way, the company seems to have come to the worthwhile perspective that mapping an environment spatially doesn’t really help that much if you can’t parse the contextual nuances of what the camera is actually looking at, as well.

A lot of the AR startups in this space have raised some cash on the backs of the smartphone AR trend and the hundreds of millions of potential users, but it still seems pretty dubious whether this market has legs. Fortunately, most of these solutions have wide applicability across future industries like robotics and autonomous vehicles, helping computers interface with the real world through visual and geographic cues, but their utility might not be as ripe as they’d hope.

This is an area where Magic Leap could be poised to find some relatively near-term success. The startup’s top brass spent a hefty amount of time at their developer conference talking about the “Magicverse,” basically their vision for bringing localized AR layers onto geographic spaces where users with Magic Leap glasses could observe the content. Without having taken a peek at the tech they’re working with, their biggest advantage seems to rely on their partnership with AT&T, which is poised to start working more seriously with 5G in 2019.

The back end still remains a much more exciting market than hardware in 2019, but there may still be some interesting movement with devices this year. I don’t trust most of the predictive data that exists surrounding headset sales, so I’m not even going to reference it; suffice to say that AR headset sales aren’t going to explode anytime soon.

North Focals

More conservative AR hardware

One trend that I am curious to see shake out is the more simplistic version of AR where the glasses basically just offer users a heads-up display for notifications and lightweight apps.

Companies like North and Vuzix have been talking a lot about their work here. Apple’s rumored AR glasses have been talked about for ages at this point, with 2020/2021 seeming to be the rumor mill sweet spot for a release time frame. If that’s the case, I’d bet it falls more into this design ethos than a HoloLens type device. The hardware just isn’t small enough yet, but it is getting close, and there could be some interesting early ground that the industry could gain by moving in more heavily on traditional wearable use cases — though high component costs will be an early limiter as well.

This is probably a hardware space Snap has their eyes on; Spectacles jogged a lot of the current thinking on glasses-type wearables, but at this point, the company needs something that has wide appeal and can feed users back into its own app. The company isn’t in a position to hock something with razor-thin or non-existent margins, and it doesn’t gain that much from a product that sells a few thousand units in terms of building its platform.

Bottom line

For the Facebooks and Apples of the world, immediate market conditions and user interest obviously hold a different weight. U.S. investment firms with good track records spent a lot of time this year rejiggering their expectations for their first waves of investments. For the more ambitious privately held AR startups of the world, there’s probably going to be an issue with raising capital this year, as a lot of the top hardware companies have been seeking more free-flowing late-stage cash from Chinese firms, which have been growing harder to pin down as the trade climate worsens. This is going to be a problem for hardware companies especially.

For the most part, the BS is going to continue to get easier to parse this year.

Platform plays are going to have to dial in their target audience a bit more than “everyone with an AR-enabled phone”; more realistic expectations are something the industry should benefit from. ARKit and ARCore are going to level-up and game engine-makers are going to get better solutions for AR content creators. Back-end vision challenges are going to get solved and enable things like more seamless multi-player, but there are plenty of reasons why these tech problem solutions won’t lead to big changes in user behavior. Users failing to take off in the second year of some of these big platforms probably won’t dissuade Apple, but it definitely will dissuade some investors from continuing to bet big on the near-term future of mobile AR.

Gaming chat startup Discord raises $150M, surpassing $2B valuation

Chatty gamers are apparently worth billions.

Discord, the gaming chat startup with more than 200 million active users, announced Friday that it had secured $150 million in funding at a $2.05 billion valuation. The round was led by Greenoaks Capital with participation from Firstmark, Tencent, IVP, Index Ventures and Technology Opportunity Partners.

The company announced this past April that they had raised $50 million in funding at a $1.65 billion valuation. With this latest bout of cash, Discord has now pulled in more than $280 million in funding.

The influx of new money comes as the chat startup goes full speed ahead on one of its most ambitious offshoots to date, taking on games giant Valve with a gaming store meant to rival the ubiquitous Steam store. The company launched a global beta of the Discord Store in October; they recently announced that starting in 2019, they will be establishing a revenue split of 90/10 for developers that are self-publishing titles on the store, a margin much friendlier to indie devs than the 70/30 split on Steam.

The company’s bread-and-butter remains its chat service, which brings voice and text communications to gamers looking to talk with teammates and fellow enthusiasts during and outside of gameplay. Discord isn’t the only service that offers this capability, but it is definitely one of the most popular with hundreds of millions of users coming to the app every month.

We chatted with CEO Jason Citron at our most recent Disrupt SF event, where he talked about the opportunities available in the online games sales market and what challenges the company had up ahead.