Character actors from the Epic Games Fortnite video game dance during the E3 Electronic Entertainment Expo in Los Angeles on June 12, 2019.
Kyle Grillot | Bloomberg | Getty Images
A U.S. judge issued a permanent injunction on Monday that will force Google to offer alternatives to its Google Play store for downloading apps on Android phones.
Google will also be restricted from paying fees or sharing revenue with companies in exchange for them choosing not to compete with Google’s app store. Alphabet stock took a leg lower on the news and was down more than 2% Monday.
The ruling from Judge James Donato in California is the most significant outcome of Epic Games’ antitrust lawsuit against Google, which kicked off in 2020. The Fortnite maker accused Google of anti-competitive practices, including paying hardware companies and Android phone makers to not develop competing app stores.
The decision could lead to developers getting a bigger share of the market, as both Google and Apple’s app stores typically take between 15% and 30% of total sales for high-grossing apps. The new restrictions on Google Play may allow developers to keep more revenue by bypassing Google’s rules or fees.
According to the filing, starting in November, for three years, Google will not be able to:
Pay companies to launch apps exclusively or first on Google Play
Pay companies so they do not compete with Google Play
Pay companies to preinstall Google Play on new devices
Require app makers to use Google Play Billing, or prohibit app makers from telling their users about cheaper online goods on their website (Google Play takes between 15% and 30% of in-app purchases as a fee from large app makers)
Google will also have to permit competing Android app stores to access Google Play’s catalog of apps
Google will have to carry third-party Android app stores on its Google Play app store.
Epic Games and Google will also form a three-person committee that will review technical issues related to Google’s compliance, according to the filing.
Epic Games publishes titles such as Fortnite, which are monetized through in-app purchases of character costumes and other so-called “skins,” and challenged Google and Apple’s contractual control of mobile app distribution in 2020 offering less-expensive purchases of Fortnite’s in-game currency, violating app store rules and kicking off the lawsuits.
Epic Games prevailed over Google late last year, and Monday’s filing details the changes Google has to make. Epic Games mostly lost in a very similar suit against Apple and its control of the App Store. Google’s trial was decided by a jury. Apple’s trial was decided by a judge.
During the Google trial, Epic Games focused on whether Google locked up the app store market through deals with handset makers, and whether it scared users away from using Android’s sideloading functionality, which allows Android users to install apps from the web, through security warnings.
Epic Games CEO Tim Sweeney previously said Google’s corporate culture contributed to Epic’s win because Google officials often wrote down or documented business practices in emails or communications that came out during the trial.
Google said in a blog post that it will ask the court to pause the pending changes, and will appeal the court’s decision.
An Epic Games representative did not immediately respond to CNBC’s request for comment.
Mario poses at the “SUPER NINTENDO WORLD” welcome celebration at Universal Studios Hollywood on February 16, 2023 in Universal City, California.
Rodin Eckenroth | Getty Images Entertainment | Getty Images
Nintendo on Tuesday cut forecast for Switch sales for its fiscal year ending March 2025 as demand wanes for its ageing console.
The Japanese gaming giant said it now expects to sell 12.5 million units of the Switch over the course of the period. That’s down from a previous forecast of 13.5 million units.
Nintendo has been contending with fading demand for its flagship Switch console, which is now more than seven years old.
Investors are waiting for news surrounding a successor to the Switch, which they hope will re-energize Nintendo’s gaming business. In the past, the company said that the Switch successor will be announced in its current fiscal year, which ends in March 2025.
Nintendo also cut full fiscal year forecasts for sales and operating profit. The company said it now expects sales of 1.28 trillion yen versus a previous forecast of 1.35 trillion yen. The operating profit outlook for the period was slashed from 400 billion yen to 360 billion yen.
Here’s how Nintendo did in its fiscal second quarter ended Sept. 30 versus LSEG estimates:
Revenue: 276.7 billion Japanese yen ($1.8 billion), compared with 273.34 billion yen expected.
Net profit: 27.7 billion yen, versus 48.06 billion yen expected.
Revenue fell 17% year-on-year. Net profit plunged just over 69% versus the same period last year.
Super Mario, Zelda boost fading
The Switch is Nintendo’s second best-selling console in history, behind the Nintendo DS. Despite the recent fall in sales, Nintendo has prolonged the console’s appeal for an extended period of time since its launch in 2017 by relying on its recognizable characters.
In its last fiscal year, Nintendo managed to reinvigorate sales of the Switch thanks to the the success of the “Super Mario Bros. Movie” and the highly anticipated release of the “The Legend of Zelda: Tears of the Kingdom” game, which underscored the appeal of its iconic characters.
But that effect is fading.
On Tuesday, Nintendo noted the boost that the company received in the first half of its last fiscal year, but said “there were no such special factors in the first half of this fiscal year, and with Nintendo Switch now in its eighth year since launch, unit sales of both hardware and software decreased significantly year-on-year.”
Sales of the Switch totaled 4.72 units in the six months ended Sept. 30, compared with 6.84 million units in the same period of last year.
In the face of falling sales, Nintendo has tried to license out its intellectual property for use everywhere, from movies to theme parks. A new Super Mario movie is slated for release in 2026.
Meta’s Mark Zuckerberg plans to visit South Korea, scheduling key meetings during the trip, according to a statement by Meta on Wednesday, which did not provide further details. Reportedly, Zuckerberg is anticipated to meet with Samsung Electronics chairman Jay Y. Lee later this month to discuss AI chip supply and other generative AI issues, as per the South Korean newspaper Seoul Economic Daily, citing unnamed sources familiar with the matter.
Alex Wong | Getty Images News | Getty Images
Meta extended its ban on new political ads on Facebook and Instagram past Election Day in the U.S.
The social media giant announced the political ads policy update on Monday, extending its ban on new political ads past Tuesday, the original end date for the restriction period.
Meta did not specify the day it will lift the restriction, saying only that the ad blocking will continue “until later this week.” The company did not say why it extended the political advertising restriction period.
The company announced in August that any political ads that ran at least once before Oct. 29 would still be allowed to run on Meta’s services in the final week before Election Day. Other political ads will not be allowed to run.
Organization with eligible ads will have “limited editing capabilities” while the restriction is still in place, Meta said. Those advertisers will be allowed to make scheduling, budgeting and bidding-related changes to their political ads, Meta said.
Meta enacted the same policy in 2020. The company said the policy is in place because “we recognize there may not be enough time to contest new claims made in ads.”
Google-parent Alphabet announced a similar ad policy update last month, saying it would pause ads relating to U.S. elections from running in the U.S. after the last polls close on Tuesday. Alphabet said it would notify advertisers when it lifts the pause.
Nearly $1 billion has been spent on political ads over the last week, with the bulk of the money spent on down-ballot races throughout the U.S., according to data from advertising analytics firm AdImpact.
Sam Altman, CEO of OpenAI, attends the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, January 18, 2024 (L), and Amazon CEO Jeff Bezos speaks during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021.
Reuters
Physical Intelligence, a robot startup based in San Francisco, has raised $400 million at a $2.4 billion post-money valuation, the company confirmed Monday to CNBC.
Investors included Amazon founder Jeff Bezos, OpenAI, Thrive Capital and Lux Capital, a Physical Intelligence spokesperson said. Khosla Ventures and Sequoia Capital are also listed as investors on the company’s website.
Physical Intelligence’s new valuation is about six times that of its March seed round, which reportedly came in at $70 million with a $400 million valuation. Its current roster of employees includes alumni of Tesla, Google DeepMind and X.
The startup focuses on “bringing general-purpose AI into the physical world,” per its website, and it aims to do this by developing large-scale artificial intelligence models and algorithms to power robots. The startup spent the past eight months developing a “general-purpose” AI model for robots, the company wrote in a blog post. Physical Intelligence hopes that model will be the first step toward its ultimate goal of developing artificial general intelligence. AGI is a term used to describe AI technology that equals or surpasses human intellect on a wide range of tasks.
Physical Intelligence’s vision is that one day users can “simply ask robots to perform any task they want, just like they can ask large language models (LLMs) and chatbot assistants,” the startup wrote in the blog post. In case studies, Physical Intelligence details how its tech could allow a robot to do laundry, bus tables or assemble a box.