Technology

SoftBank-backed Improbable slashes losses by 85%, says pivot to the metaverse has paid off

Published

2 years ago

September 26, 2023

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Herman Narula, co-founder and CEO at Improbable, speaks during a session at the Web Summit in Lisbon.

Henrique Casinhas | Sopa Images | Lightrocket | Getty Images

Virtual reality startup Improbable said Wednesday that it reduced losses by 85% in 2022, a year that saw the company pivot its focus to powering new “metaverse” experiences.

The British company said in a press release that its revenues more than doubled last year to £78 million ($95 million), as its work on metaverses expanded significantly.

It recorded a loss of £19 million in the 2022 fiscal year, but this compared to a £131 million loss the year prior.

Improbable CEO Herman Narula said the company had reported its “best financial year” on record which reflected how its bet on the metaverse had paid off.

Improbable has historically burned through lots of money as it attempts to make its vision for vast virtual worlds a success. Critics have raised questions about the commercial sustainability of the business.

Improbable said that part of the reason behind the company’s reduction in losses was a dramatic reduction in the cost of running mass-scale virtual events.

Whereas initially it took millions of pounds to host one event, it now takes hundreds of thousands of pounds, the company said, and it anticipates this to continue to fall.

The year also saw Improbable divest two of its games studios, Inflexion Games and Midwinter Entertainment, and sell off a business unit focused on servicing defense clients.

Improbable finished the year with £140 million cash in the bank, signaling ongoing support from shareholders, the company said.

Improbable’s backers include the likes of SoftBank, Andreessen Horowitz.

Full accounts for Improbable are yet to be released on Companies House, the U.K.’s official register of companies.

Metaverse pivot

In 2022, Improbable unveiled its ambition to become a major player in the so-called “metaverse” — the concept for a vast world, or worlds, in the digital sphere where people can work, buy and sell things, or just hang out.

The company has been working with players in the digital asset sphere, including Yuga Labs, which it worked with to build out the Otherside metaverse, where people can make their own digital avatars, attend events, and more.

The company doubled down on its metaverse strategy earlier this year with a white paper detailing its vision for MSquared, a “network of interoperable Web3 metaverses.”

MSquared, which is a separate business entity from Improbable, raised $150 million from investors last year.

The service — a complex piece of technical engineering with significant computing requirements — is intended to be accessible via cloud streaming, meaning you won’t have to download any software to jump into one of its worlds, similar to how movies and TV shows are accessed on Netflix.

It’s drawn interest from big names in sports and entertainment, like Major League Baseball (MLB).

The company struck a major deal with MLB to launch a new virtual ballpark based on Improbable’s metaverse technology. People in the MLB metaverse can choose any seat they’d like to watch a game, or pick a camera spot to focus on a particular player.

The tech industry has been betting that virtual and augmented reality will prove to be something of a “paradigm” shift in technology akin to the invention of the internet or the smartphone.

Some are calling it the technology’s “iPhone moment,” in reference to effect Apple’s now ubiquitous handset had on consumers and businesses globally.

Apple recently announced its first virtual and augmented reality headset, called the Vision Pro, while Meta unveiled its Quest 3 headset in June.

Improbable is taking a different route to companies like Apple, Meta, and Microsoft, which is behind the HoloLens mixed reality products.

For one, you won’t need a headset to enter an MSquared space, as the software will be desktop-based. The experience is also intended to be more decentralized and interoperable, with the ability to take content from one metaverse to another.

Founded in 2012, Improbable has for years been attempting to build vast, continuously rendering worlds in which thousands of people can play games and interact with each other.

The London-headquartered firm, one of Japanese tech investment giant SoftBank’s biggest bets in Britain, was founded by Cambridge computer science students Narula and Rob Whitehead with the ambition of developing large-scale computer simulations and “synthetic environments.”

Technology

Amazon’s ad business grew 19% in first quarter, topping estimates

Published

5 hours ago

May 2, 2025

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Amazon’s ad business grew 19% in first quarter, topping estimates

A woman cleans the store window of the Amazon house after activists sprayed paint on its logo during a protest on the opening day of the 55th annual meeting of the World Economic Forum in Davos, Switzerland, on Jan. 20, 2025.

Yves Herman | Reuters

Amazon reported a 19% increase in online ad revenue in the first quarter, beating analysts’ estimates.

Ad sales climbed to $13.92 billion, while analysts on average were expecting $13.74 billion, according to StreetAccount.

The numbers were contained in Amazon’s first-quarter earnings report. The company reported total first-quarter sales of $155.67 billion, compared to Wall Street projections of $155.04 billion.

Although Amazon’s online ad business represents a fraction of overall sales, it has emerged in recent years to become the third-biggest platform in the global digital advertising market, behind only Alphabet and Meta.

Online advertising is a particular area of focus for investors due to economic uncertainty and increasing tensions between the U.S. and China over trade. While President Donald Trump’s China tariffs will likely affect Amazon’s core retail business, the company’s online ad unit could also feel some pain.

So far, tech companies with online ad businesses have reported solid first-quarter earnings, but warned of potentially tougher times later in the year.

Meta reported stronger-than-expected first-quarter earnings this week, but said ad sales in the Asia-Pacific region came in at $8.22 billion for the quarter, trailing analysts’ estimates of $8.42 billion.

The company’s finance chief Susan Li said during an earnings call that “Asia-based e-commerce exporters” have slowed their online ad spending likely due to the de minimis trade loophole ending this Friday.

When Alphabet reported first-quarter earnings last Thursday, it revealed that ad sales grew 8.5% year over year to $66.89 billion and YouTube ad revenue increased 10% to $8.93 billion. But Alphabet executives told analysts that it expects headwinds to its Asia-Pacific-focused advertising business.

Snap on Tuesday said it had “experienced headwinds to start the current quarter,” which resulted in the company saying it would not provide guidance.

Last week, Microsoft reported its latest quarterly earnings and said search and news advertising sales, minus payments to its affiliates, grew 15% year over year to $449 million.

Reddit also reported first-quarter earnings on Thursday that beat on sales and guidance. The company’s first-quarter sales soared 61% year over year to $392 million.

Although Reddit’s second-quarter guidance topped analysts’ projections, CEO Steve Huffman said there is some economic shakiness.

“Ever-shifting macro environments like these create both challenges and opportunities,” Huffman wrote in a letter to shareholders. “We’ve grown through challenging times before — people need connection and information just as much in uncertain times.”

Pinterest reports earnings on May 8.

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Technology

Apple has managed tariffs so far, but Cook says it’s tough to predict beyond June

Published

5 hours ago

May 1, 2025

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Apple has managed tariffs so far, but Cook says it's tough to predict beyond June

Apple CEO Tim Cook, after nearly a month of anticipation from investors, on Thursday finally revealed how Apple was navigating the Trump administration’s tariffs.

The company only saw a “limited impact” on tariffs between January and the end of March, Cook told investors on an earnings call for the company’s second quarter results.

For the current quarter which ends in June, Apple is predicting about $900 million in additional costs for those tariffs — assuming nothing changes, Cook said. That surprised analysts who said on the call that they expected the costs to be higher.

The vast majority of Apple’s products are “currently not subject” to Trump’s reciprocal tariffs, Cook said. But beyond June, he didn’t say much.

“I don’t want to predict the future because I’m not sure what will happen with tariffs,” said Cook, adding that “it’s very difficult to predict beyond beyond June.”

Apple doesn’t usually give a lot of details or guidance beyond the current quarter, but investors didn’t like Thursday’s lack of clarity. Apple shares fell as much as 4% in extended trading on Thursday despite the company reporting results that beat Wall Street expectations for revenue and showed strong sales growth for iPads and Mac computers.

“As we look ahead, we remain confident,” Cook said.

Apple’s uncertainty highlights how even a company with a reputation for world-class operations can get whacked by the unpredictability of the Trump administration’s shifting tariff rates and dates.

Cook, who built his reputation in Silicon Valley as Apple’s operations guru, discussed how the company has dealt with the tariffs to minimize their impact so far on Thursday. He praised his old division on a call with analysts.

“‘l’ll just say that the operational team has done an incredible job around optimizing the the supply chain and the inventory,” he said.

Apple is currently sourcing American-bound products from India and Vietnam, Cook said. Those countries currently have 10% tariffs on them, and the company is sourcing Apple computers for rest of the world from China, which the Trump administration has hit with a 145% tariff rate.

Cook also said that Apple had built up inventory ahead of the tariffs, which would be reported as manufacturing purchase obligations in the company’s filings with the Securities and Exchange Commission. Cook said there was no “obvious evidence” that consumers were buying more Apple products ahead of tariffs.

“We do expect the majority of iPhones sold in the U.S. will have India as their country of origin,” Cook said. “Vietnam will be the country of origin for almost all iPad, Mac, Apple Watch and AirPods products sold in the U.S.”

Apple will still pay higher 145% tariffs on some Chinese imports for AppleCare, its extended warranty program, and accessories, Cook said.

One issue for forecasting tariffs going forward is that both Vietnam and India are in line to get hit with hefty tariffs on imported goods as soon as July.

Trump previously targeted both countries under his “reciprocal tariffs” on April 2, but a week later, he paused the tariffs for 90 days. Apple expanded its supply chain to those countries in recent years as a hedge for its business, but the Vietnam and India strategy won’t work if Trump’s tariffs ultimately take effect.

Cook also mentioned the possibility that technology products such as semiconductors might receive additional tariffs under a process called a Section 232 Investigation.

Apple is not the only big tech company to get rattled by the Trump administration’s tariffs.

Amazon finance chief Brian Olsavsky said Thursday that Amazon would offer a wider range of guidance because of tariff uncertainty, and he also alluded to the possibility of weakening consumer demand. Microsoft raised Xbox prices on Thursday, despite tariffs coming up just once on the company’s Wednesday earnings call.

Apple didn’t offer guidance for its profitable Services division on Thursday, but offered the same kind of top-line forecast that it has in previous quarters. Apple expects overall revenue to grow “low to mid-single digits” on an annual basis during the current quarter. Apple reported $85.78 billion in sales during the June quarter last year.

And at least during that quarter, Apple investors will know what to expect.

WATCH: Deepwater’s Gene Munster digs into Apple post-earnings

Technology

Nvidia CEO Jensen Huang gets first salary raise in a decade

Published

6 hours ago

May 1, 2025

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Nvidia CEO Jensen Huang gets first salary raise in a decade

Nvidia’s CEO Jensen Huang delivers his keystone speech ahead of Computex 2024 in Taipei on June 2, 2024.

Sam Yeh | AFP | Getty Images

Nvidia CEO Jensen Huang has made tens of billions of dollars in recent years from his stake in the chipmaker, but he’s getting his first salary increase in a decade.

Huang’s base salary rose to $1.5 million, a 49% increase from 2024, according to a proxy filing with the SEC on Thursday. His variable cash also went up by $1 million, or 50%, from the 2024 fiscal year. Stock awards grew to $38.8 million, bringing total pay to $49.9 million.

The compensation committee “believed this was appropriate in consideration of internal pay equity with the base salaries” of other top executives, the filing said, and “it represented Mr. Huang’s first base salary increase in 10 years.”

Nvidia is in the midst of a boom that’s turned it into one of the most valuable companies in the world, thanks to its graphics processing units (GPUs) that power the most powerful artificial intelligence models and workloads. Revenue in the 2025 fiscal year jumped 114% to $130.5 billion, the company reported in February.

The company’s stock price increased more than ninefold between the end of 2022 and the end of last year. Huang’s roughly 3.5% stake is currently worth about $94 billion.

Huang’s 2025 pay also included $3.5 million in residential security and consultation fees and driver services, the company said in the filing. In the previous year, residential security and consultation fees for Huang totaled $2.2 million.

Google in a recent filing said it paid $8.27 million for CEO Sundar Pichai’s personal security and travel, representing a 22% increase from the year prior.

WATCH: Nvidia-Anthropic feud