Chinese tech giants are snapping up gaming studios around the world — here are some potential ramifications
LONDON – After decades of the U.S. and Japan dominating the gaming space, China’s influence is growing as its tech giants snap up gaming studios around the world.
Now, some experts think video games could look a little different in the coming years as a result.
Questions are being asked about whether the Chinese owners of U.S. and European studios will try to influence the games they make, or indeed use them to promote Chinese values. It remains to be seen but subtle changes could happen in the coming years, according to some experts.
“Some of these values might be different from what many expect,” British-Chinese writer Lu-Hai Liang told CNBC. “For example, Chinese female gamers are a massive market (500 million) and there have been many female-focused games and game studios that revel in this sector.”
Thomas David, a semiconductor engineer in the U.S., told CNBC that he thinks gamers could start to see more titles where the “good guy” is Chinese and the “bad guy” is from the West, for example.
China’s own gaming market is heavily regulated. It does not allow games that contain certain political views, gambling, gore, nudity and many other things to be released and sold in its home market. The movie industry is equally strict, with U.S. films having to be adapted before they can be released in China.
Exporting Chinese culture
“This area — how China could use games to export its culture — is incredibly important and largely missed,” Abishur Prakash, co-founder of the Center for Innovating the Future, told CNBC.
“China has several ways it can take its ideals to the world through games, and build a new kind of global power,” said Prakash. “One way is by banning certain topics, like Taiwan or human rights, from being discussed,” he said.
China could also establish “new centers within games that help showcase China’s power,” or use games to build its financial and commercial power, he said. “The next Chinese games might only allow users to purchase items in digital Yuan,” said Prakash. “Or, the Chinese games might have Chinese platforms, like TikTok, embedded into them.”
Others doubt that Chinese owners of Western gaming studios will try to change the games that get sold in the West.
“I would be very skeptical of something like that happening,” Louise Shorthouse, a senior games analyst at Ampere Analysis, told CNBC.
Steven Bailey, principal analyst at Omida, told CNBC that “Chinese companies have had involvement in various Western game companies and content for quite some time, and understand that successfully making games for the West will not be supported by such changes.”
He added: “Conversely, anyone releasing a game in China will need to adapt it for that market.”
Tencent’s sprawling investments
“Tencent keeps buying the #1 game in every niche in North America and Europe,” wrote tech investor Rodolfo Rosini on Twitter in February. “This is important because games have cultural influence. And controlling the present and how reality is portrayed is very powerful.”
“If Tencent were to buy a stake in every leading newspaper and TV company people would be up in arms, there would be political hearings etc,” he added. “Instead they play the long game and they are buying the next generation’s media properties without any competition.”
For years, Hollywood has spread American values around the world and championed the country’s military might. Now it could be China’s turn to try to do the same, but through video games. However, while Hollywood often criticizes the U.S. and the actions of Washington D.C., China’s tech giants would not be able to say a bad word against Beijing, which exercises great control over all of its domestic enterprises.
China has more gamers than any other country, making it a highly lucrative market for those that can get in. One of the reasons that U.S. and European gaming firms take investment from Chinese companies is that they’re legally obliged to partner with a Chinese company before their game can be released in the country.
U.K.-headquartered Sumo became the latest gaming firm to sell to a Chinese tech behemoth on Monday, announcing a $1.26 billion deal with Tencent, which is the world’s largest video game publisher.
Neither company immediately responded when CNBC asked how, or indeed if, Tencent will influence the games that Sumo works on.
But Tencent has traditionally taken a hands off approach to its investments and acquisitions, according to Daniel Ahmad, senior analyst at Niko Partners.
“The company could also be an invaluable partner for Tencent as it looks to push into the AAA game space itself with its own projects,” said Ahmad.
“The deal would also help Sumo utilize Tencent’s expertise in regard to games development and publishing within China,” he added.
“Chinese game studios are looking to grow overseas and while organic growth is one option, acquisition allows these companies to build a presence much faster and with local talent,” said Ahmad.
Tencent also invested $150 million in Reddit in 2019, angering some Reddit users in the process who were concerned that the platform may experience more censorship. However, this does not appear to have happened in any significant way.
OpenAI tender offer is on track for January despite leadership fracas, sources say
Sam Altman, CEO of OpenAI participates in the “Charting the Path Forward: The Future of Artificial Intelligence” at the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week in San Francisco, California, on November 16, 2023.
Andrew Caballero-Reynolds | AFP | Getty Images
OpenAI’s tender offer, which would allow employees to sell shares in the start-up to outside investors, remains on track despite the leadership tumult and board shuffle, two people familiar with the matter told CNBC.
The tender offer will value OpenAI at the same levels as previously reported in October, around $86 billion, and is being led by Josh Kushner’s Thrive Capital, according to the people familiar, who spoke anonymously to discuss private communications freely.
The round and previously reported valuation were jeopardized by Sam Altman’s temporary ouster earlier in November, but his return cleared the way for the tender offer to proceed.
Tender offers do not involve the issuance of new equity. Instead, Thrive and other involved investors will buy existing units belonging largely to employees, giving them liquidity. The $86 billion round is three times OpenAI’s previous fundraise in April, which valued the company at around $28 billion.
Another person familiar told CNBC that the round had been extended to January 5.
The extension of the tender offer comes after a rollercoaster couple of weeks for the company. OpenAI’s nonprofit board argued that Altman “was not consistently candid in his communications with the board” as CEO, and his subsequent departure incited uproar from investors and employees alike, especially after Microsoft CEO Satya Nadella said Altman and OpenAI president Greg Brockman would lead a new AI lab under Microsoft. Employees threatened to walk en masse, signing an open letter and commenting in support of Altman on social media, which led in part to a significant turnover of OpenAI’s board.
On Wednesday, OpenAI announced Altman and Brockman’s official return to their previous roles, along with a new board, including former Salesforce co-CEO Bret Taylor, former Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo.
Microsoft obtained a non-voting board observer position, OpenAI said Wednesday. Nadella had previously told CNBC that new governance would be required at the startup. Microsoft holds a 49% stake in OpenAI.
Not all major backers will receive a director position. Tiger Global will not likely pursue a board seat, a person familiar with the matter said, in line with the firm’s longstanding practice. OpenAI’s other major backers include Founders Fund, Sequoia Capital and, following the completion of the tender offer, Thrive Capital.
Sequoia Capital declined to comment on whether it would be involved in the upcoming tender. Founders Fund will not participate in the tender offer either, a person familiar with the firm said. A spokesperson for Thrive declined to comment beyond saying it remained “committed” to OpenAI.
OpenAI did not immediately respond to CNBC’s request for comment.
— CNBC’s Ari Levy & Jordan Novet contributed to this report.
Elon Musk hypes Tesla Cybertruck at deliveries event in Austin
Tesla CEO Elon Musk took the stage to reveal details about the company’s new and unconventional Cybertruck pickup on Thursday in Austin, one day after he appeared in a bizarre interview at the DealBook Summit in New York. At that earlier event, Musk boasted, “It will be the biggest product launch of anything by far on Earth this year.”
At the event in Austin, Musk said the Cybertruck’s hard steel body was bulletproof, and that its windows were “rock proof.” He said it could tow over 11,000 pounds, accelerate from 0 to 60 miles per hour in 2.6 seconds, and features a “super-tough” composite bed that is six feet long and four feet wide. Musk added that the vehicle would “change the look of the roads” and that the “future finally looks like the future.”
Musk then presented several newly produced trucks to customers, who drove away in them.
In an October earnings call, Musk struck a more cautious note saying, “There will be enormous challenges in reaching volume production with the Cybertruck, and then in making the Cybertruck cashflow positive.” He also said at that time, “we dug our own grave with Cybertruck,” pointing out “unique challenges” in producing and bringing that truck to market.
According to Tesla’s website, the company will sell its base model rear-wheel drive version of the Cybertruck for an estimated $60,990 and a “Cyberbeast” version for $99,990, with deliveries for both of these trims starting next year. Tesla also plans to sell an all-wheel drive version of the Cybertruck for $79,900 starting in 2025, per the company website.
The base model rear-wheel drive Cybertruck is expected to have a 250-mile range battery and accelerate from 0 to 60 miles per hour in 6.5 seconds, and the all-wheel drive Cybertruck is expected to have a range of 340 miles and go 0 to 60 miles per hour in 4.1 seconds with a top speed of 112 miles per hour. The highest-end Cyberbeast would have the fastest acceleration and a range of 320 miles, estimated, with a top speed of 130 miles per hour.
Tesla first unveiled the Cybertruck — with its angular and unpainted hard steel body — in November 2019. It had previously said production of the vehicle would start in 2021, and the truck would sell at the entry-level price of $39,900 for a rear-wheel-drive version, and around $69,000 for a highest-spec, tri-motor version– far more affordable than the prices Tesla listed on Thursday.
The company began taking $100 refundable “reservations” for the Cybertruck after it was unveiled, and the company said it received more than 1 million reservations since its debut. (Customers must now put down $250 to move ahead with a Cybertruck order, per the Tesla website.)
While Tesla unveiled its Cybertruck design in 2019, it only began early Cybertruck production in July this year.
Meanwhile, competitors including Ford, General Motors and Rivian began to sell their more utilitarian electric pickups. Earlier this week, Rivian, which only manufactures battery electric vehicles (like Tesla) started to offer a leasing option for select models of its all-electric R1T pickup truck.
The U.S. electric pickup truck market has not expanded as quickly as some thought when the Cybertruck was initially revealed. Several start-ups have either now brought vehicles to market or did with little success such as Lordstown Motors. Both GM and Ford have announced plans to scale back, postpone or cancel EV products and investments, including some related to EV trucks.
Tesla shares closed lower on Thursday by about 2% and were flat after hours.
— CNBC’s Mike Wayland contributed to this report.
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X CEO Linda Yaccarino addresses Musk’s ‘go f—- yourself’ comment to advertisers
Linda Yaccarino: CEO of X speaking with CNBC’s Sara Eisen on Aug. 10th, 2023.
X CEO Linda Yaccarino addressed the explicit comments Elon Musk hurled at advertisers during what she called a “wide ranging” and “candid” interview with CNBC’s Andrew Ross Sorkin at the 2023 DealBook Summit in New York Wednesday.
“If somebody’s going to try to blackmail me with advertising? Blackmail me with money? Go f—yourself. Go. F—. Yourself. Is that clear?” X owner and CTO Musk said during the interview on Wednesday.
Yaccarino described Musk’s comments as an “explicit point of view about our position.”
“We’re a platform that allows people to make their own decisions,” Yaccarino wrote on X, formerly known as Twitter, late Wednesday night. “And here’s my perspective when it comes to advertising: X is standing at a unique and amazing intersection of Free Speech and Main Street — and the X community is powerful and is here to welcome you. To our partners who believe in our meaningful work — Thank You.”
Disney, Apple, IBM, Comcast, Warner Bros Discovery, Paramount Global and Lions Gate Entertainment pulled ads from X earlier in November after Musk said he agreed with a social media post accusing “Jewish communities” of pushing “hatred against whites.” His comments drew condemnation from The White House, which blasted Musk for promoting “antisemitic and racist hate.”
During the interview, Musk called out Disney’s CEO Bob Iger, who also spoke at DealBook, and said “Hi Bob!”
Yaccarino was hired as X’s CEO in May. She was previously the global advertising chief of NBCUniversal. She has been tasked with bringing advertisers back to X following Musk’s takeover of the company in 2022. In August, she said brands were returning to the platform and should feel comfortable placing ads.
Musk apologized for his inflammatory comments on X during the interview and told Sorkin that a particular post, where agreed with an antisemitic conspiracy theory, was “one of the most foolish if not the most foolish thing I’ve ever done on the platform.”
“I’m sorry for that tweet or post,” he said.
X responded to CNBC’s request for comment with an automated response. Disney, Apple and IBM did not immediately respond.
CNBC’s Lora Kolodny contributed to this report.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
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