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Still from Paramount’s “Sonic the Hedgehog 2.”

Paramount

After Sega’s blockbuster adaptation of its classic Sonic the Hedgehog gaming franchise on the big screen, the company suggested it wants to replicate that success with other hit video games in its arsenal.

Speaking with CNBC at the Web Summit tech conference in Libson, Portugal, Tuesday, Sega Chief Operating Officer Shuji Utsumi said that the company is thinking of bringing more of its lucrative intellectual property to other platforms, including movies and the gaming platform Roblox.

“Sonic is reviving,” Utsumi told CNBC’s Arjun Kharpal, alluding to the success of the Sonic the Hedgehog adaptations in the box office.

Sonic the Hedgehog grossed $306.8 million in the box office, becoming a blockbuster win for the franchise even after initial angry reaction from fans over a poor rendition of the iconic character the first time Sega revealed it to the world.

Sonic the Hedgehog 2 did even better, banking $405.4 million at the box office.

After 'Sonic The Hedgehog' success, Sega wants to revive more classics

Now, Sega is looking to translate that success into other game adaptations. That might not just mean movies, Utsumi cautioned, adding that the company is looking at other ways to bring its IP to more consumers.

That could include bringing a Sonic experience to the Roblox gaming platform, where millions of people gather to build games and connect with each other in massive online communities, as well as mobile, too.

The company recently closed its acquisition of Rovio, the maker of the Angry Birds mobile game, for 706 million euros ($767.9 million).  

“We have other major IPs,” Utsumi said. “We are thinking of reviving other classical IPs too.”

Bringing Yakuza and Persona to more platforms

Utsumi highlighted the Yakuza beat ’em up game and Persona role-playing game franchise as examples that could be adapted.

It comes as Sega is set to launch a new Yakuza game, Like a Dragon: Infinite Wealth, next year. The company is also launching two new Persona games in 2024, too.

“As I say, we are trying to be in a lot of different categories, different areas like Roblox, movies,” Utsumi said. “All these IPs can be somewhere else other than games soon.”

Sega plans to ramp up mobile gaming push

Sega recently launched the latest iteration of its Yakuza game. Collectively, the Yakuza game series has sold 21.1 million units since its debut in 2005, according to Sega. Persona 5, the latest game in the franchise, has also seen considerable success selling over 9 million copies worldwide.

Yakuza is currently only available on PlayStation, Xbox and PC. Platforms. Persona is currently only available on Xbox, PlayStation, PC, and Nintendo Switch.

Buying more studios

Sega is also on the hunt for more acquisitions as it seeks to expand its ownership of gaming studios, Utsumi said.

Utsumi suggested that the company would look to find more acquisition targets as opportunities in the market arise.

“As an entity of Sega Sammy, we are acquiring some of the companies. We just made an announcement [to buy Rovio]. We are still looking for opportunities for growth.”

Utsumi said that European gaming studios are “struggling” at the moment as they work to recover from the sales slump that followed the Covid-19 pandemic, as gamers emerged from lockdowns around the world and high inflation made people less willing to pay punchy prices for the latest titles.

“Japan studios are doing well. European studios are struggling,” Utsumi said. “I say all European developers are in a difficult time right now. Once, it was a kind of bubble. Now, it’s adjustment time.”

However, he struck an optimistic note for the future: “I think it’s going to be coming back. As long as you have solid development studios and also solid IPs.”

Sega isn’t the first company that’s looked to replicate the success of blockbuster entertainment franchises on other forms of media. Sony, Sega’s main Japanese gaming rival, made a big splash with its Spider-Man movie franchise, which the company adapted into several top video games.

No Microsoft deal on the cards

Utsumi also addressed rumors of Microsoft interest to buy the company.

The Redmond, Washington technology giant reportedly considered acquiring Sega as well as Bungie, the studio originally responsible for Halo, the Verge reported earlier this year, citing internal documents from a hearing in the Federal Trade Commission lawsuit seeking to block Microsoft’s acquisition of Activision Blizzard.

Sega’s operations chief dismissed the suggestion that Sega, which is owned by Sega Sammy Corporation, the company formed from the merger of Sega and Sammy Corporation in 2004, had any intention of being sold to another party.

“Many companies are interested. We feel honored,” Utsumi told CNBC.

“We have attractive IPs and potentials. Companies owned by the owner. A strong owner. I don’t think that kind of transaction is going to happen.”

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How TikTok’s rise sparked a short-form video race

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How TikTok’s rise sparked a short-form video race

TikTok’s grip on the short-form video market is tightening, and the world’s biggest tech platforms are racing to catch up.

Since launching globally in 2016, ByteDance-owned TikTok has amassed over 1.12 billion monthly active users worldwide, according to Backlinko. American users spend an average of 108 minutes per day on the app, according to Apptoptia.

TikTok’s success has reshaped the social media landscape, forcing competitors like Meta and Google to pivot their strategies around short-form video. But so far, experts say that none have matched TikTok’s algorithmic precision.

“It is the center of the internet for young people,” said Jasmine Enberg, vice president and principal analyst at Emarketer. “It’s where they go for entertainment, news, trends, even shopping. TikTok sets the tone for everyone else.”

Platforms like Meta‘s Instagram Reels and Google’s YouTube Shorts have expanded aggressively, launching new features, creator tools and even considering separate apps just to compete. Microsoft-owned LinkedIn, traditionally a professional networking site, is the latest to experiment with TikTok-style feeds. But with TikTok continuing to evolve, adding features like e-commerce integrations and longer videos, the question remains whether rivals can keep up.

“I’m scrolling every single day. I doom scroll all the time,” said TikTok content creator Alyssa McKay.

But there may a dark side to this growth.

As short-form content consumption soars, experts warn about shrinking attention spans and rising mental-health concerns, particularly among younger users. Researchers like Dr. Yann Poncin, associate professor at the Child Study Center at Yale University, point to disrupted sleep patterns and increased anxiety levels tied to endless scrolling habits.

“Infinite scrolling and short-form video are designed to capture your attention in short bursts,” Dr. Poncin said. “In the past, entertainment was about taking you on a journey through a show or story. Now, it’s about locking you in for just a few seconds, just enough to feed you the next thing the algorithm knows you’ll like.”

Despite sky-high engagement, monetizing short videos remains an uphill battle. Unlike long-form YouTube content, where ads can be inserted throughout, short clips offer limited space for advertisers. Creators, too, are feeling the squeeze.

“It’s never been easier to go viral,” said Enberg. “But it’s never been harder to turn that virality into a sustainable business.”

Last year, TikTok generated an estimated $23.6 billion in ad revenues, according to Oberlo, but even with this growth, many creators still make just a few dollars per million views. YouTube Shorts pays roughly four cents per 1,000 views, which is less than its long-form counterpart. Meanwhile, Instagram has leaned into brand partnerships and emerging tools like “Trial Reels,” which allow creators to experiment with content by initially sharing videos only with non-followers, giving them a low-risk way to test new formats or ideas before deciding whether to share with their full audience. But Meta told CNBC that monetizing Reels remains a work in progress.

While lawmakers scrutinize TikTok’s Chinese ownership and explore potential bans, competitors see a window of opportunity. Meta and YouTube are poised to capture up to 50% of reallocated ad dollars if TikTok faces restrictions in the U.S., according to eMarketer.

Watch the video to understand how TikTok’s rise sparked a short form video race.

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Elon Musk’s xAI Holdings in talks to raise $20 billion, Bloomberg News reports

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Elon Musk's xAI Holdings in talks to raise  billion, Bloomberg News reports

The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)

Nurphoto | Nurphoto | Getty Images

Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.

The funding would value the company at over $120 billion, according to the report.

Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.

The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.

Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.

Faber Report: Elon Musk held call with current xAI investors, sources say

The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.

“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

Read the full Bloomberg story here.

— CNBC’s Samantha Subin contributed to this report.

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Alphabet jumps 3% as search, advertising units show resilient growth

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Alphabet jumps 3% as search, advertising units show resilient growth

Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.

David Paul Morris | Bloomberg | Getty Images

Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.

GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”

The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.

Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.

Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.

Read more CNBC tech news

Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.

During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.

Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.

Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.

Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.

“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.

WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard

Gemini delivering well for Google, says Check Capital's Chris Ballard

CNBC’s Jennifer Elias contributed to this report.

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