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Mobile gaming is a $68.5 billion global business, and investors are buying in

By Jonathan Shieber
Omer Kaplan Contributor
Omer Kaplan is CMO and co-founder at ironSource.

By the end of 2019, the global gaming market is estimated to be worth $152 billion, with 45% of that, $68.5 billion, coming directly from mobile games. With this tremendous growth (10.2% YoY to be precise) has come a flurry of investments and acquisitions, everyone wanting a cut of the pie. In fact, over the last 18 months, the global gaming industry has seen $9.6 billion in investments and if investments continue at this current pace, the amount of investment generated in 2018-19 will be higher than the 8 previous years combined.

What’s interesting is why everyone is talking about games and who in the market is responding to this and how.

The gaming phenomenon

Today, mobile games account for 33% of all app downloads, 74% of consumer spend, and 10% of all time spent in-app. It’s predicted that in 2019, 2.4 billion people will play mobile games around the world – that’s almost one third of the global population. In fact, 50% of mobile app users play games, making this app category as popular as music apps like Spotify and Apple Music and second only to social media and communications apps in terms of time spent.

In the US, time spent on mobile devices has also officially outpaced that of television – with users spending 8 more minutes per day on their mobile devices. By 2021, this number is predicted to increase to over 30 minutes. Apps are the new primetime and games have grabbed the lion’s share.

Accessibility is the highest it’s ever been as barriers to entry are virtually non-existent. From casual games to the recent rise of the wildly popular hyper-casual genre of games which are quick to download, easy to play, and lend themselves to being played in short sessions throughout the day, games are played by almost every demographic stratum of society. Today, the average age of a mobile gamer is 36.3 (compared with 27.7 in 2014), the gender split is 51% female, 49% male, and one-third of all gamers are between the ages of 36-50. A far cry from the traditional stereotype of a ‘gamer’.

With these demographic, geographic, and consumption sea-changes in the mobile ecosystem and entertainment landscape, it’s no surprise that the game space is getting increased attention and investment, not just from within the industry, but more recently from traditional financial markets and even governments. Let’s look at how the markets have responded to the rise of gaming.

Image courtesy of David Maung/Bloomberg via Getty Images

Games on games

The first substantial investments in mobile gaming came from those who already had a stake in the industry. Tencent invested $90M in Pocket Gems and$126M in Glu Mobile (for a 14.6% stake), gaming powerhouse Supercell invested $5M in mobile game studio Redemption Games, Boom Fantasy raised $2M from ESPN and the MLB and Gamelynx raised $1.2M from several investors – one of which was Riot Games. Most recently, Ubisoft acquired a 70% stake in Green Panda Games to bolster its foot in the hyper-casual gaming market.

Additionally, bigger gaming studios began to acquire smaller ones. Zynga bought Gram Games, Ubisoft acquired Ketchapp, Niantic purchased Seismic Games, and Tencent bought Supercell (as well as a 40% stake in Epic Games). And the list goes on.

Wall Street wakes up

Beyond the flurry of investments and acquisitions from within the game industry, games are also generating huge amounts of revenue. Since launch, Pokemon Go has generated $2.3B in revenue and Fortnite has amassed some 250M players. This is catching the attention of more traditional financial institutions, like private equity firms and VCs, who are now looking at a variety of investment options in gaming – not just of gaming studios, but all those who had a stake in or support the industry.

In May 2018, hyper-casual mobile gaming studio Voodoo announced a $200M investment from Goldman Sachs’ private equity investment arm. For the first time ever, a mobile gaming studio attracted the attention of a venerable old financial institution. The explosion of the hyper-casual genre and the scale its titles are capable of achieving, together with the intensely iterative, data-driven business model afforded by the low production costs of games like this, were catching the attention of investors outside of the gaming world, looking for the next big growth opportunity.

The trend continued. In July 2018, private equity firm KKR bought a $400M minority stake in AppLovin and now, exactly one year later Blackstone announced their plan to acquire mobile ad-network Vungle for a reported $750M. Not only is money going into gaming studios, but investments are being made into companies whose technology supports the mobile gaming space. Traditional investors are finally taking notice of the mobile gaming ecosystem as a whole and the explosive growth it has produced in recent years. This year alone mobile games are expected to generate $55B in revenue so this new wave of investment interest should really come as no surprise.

A woman holds up her cell phone as she plays the Pokemon Go game in Lafayette Park in front of the White House in Washington, DC, July 12, 2016. (Photo: JIM WATSON/AFP/Getty Images)

Government intervention

Most recently, governments are realizing the potential and reach of the gaming industry and making their own investment moves. We’re seeing governments establish funds that support local gaming businesses – providing incentives for gaming studios to develop and retain their creatives, technology, and employees locally – as well as programs that aim to attract foreign talent.

As uncertainty looms in England surrounding Brexit, France has jumped on the opportunity with “Join the Game”. They’re painting France as an international hub that is already home to many successful gaming studios, and they’re offering tax breaks and plenty of funding options – for everything from R&D to the production of community events. Their website even has an entire page dedicated to “getting settled in France”, in English, with a step-by-step guide on how game developers should prepare for their arrival.

The UK Department for International Trade used this year’s Game Developers Conference as a backdrop for the promotion of their games fund – calling the UK “one of the most flourishing game developing ecosystems in the world.” The UK Games Fund allows for both local and foreign-owned gaming companies with a presence in the UK to apply for tax breaks. And ever since France announced their fund, more and more people have begun encouraging the British government to expand their program saying that the UK gaming ecosystem should be “retained and enhanced”. But, not only does the government take gaming seriously, the Queen does as well. In 2008, David Darling the CEO of hyper-casual game studio Kwalee was made a Commander of the Order of the British Empire (CBE) for his services to the games industry. CBE is the third-highest honor the Queen can bestow on a British citizen.

Over to Germany, and the government has allocated €50M of its 2019 budget for the creation of a games fund. In Sweden, the Sweden Game Arena is a public-private partnership that helps students develop games using government-funded offices and equipment. It also links students and startups with established companies and investors. While these numbers dwarf the investment of more commercial or financial players, the sudden uptick in interest governments are paying to the game space indicate just how exciting and lucrative gaming has become.

Support is coming from all levels

The evolution of investment in the gaming space is indicative of the stratospheric growth, massive revenue, strong user engagement, and extensive demographic and geographic reach of mobile gaming. With the global games industry projected to be worth a quarter of a trillion dollars by 2023, it comes as no surprise that the diverse players globally have finally realized its true potential and have embraced the gaming ecosystem as a whole.

Energy Vault raises $110 million from SoftBank Vision Fund as energy storage grabs headlines

By Jonathan Shieber

Imagine a moving tower made of huge cement bricks weighing 35 metric tons. The movement of these massive blocks is powered by wind or solar power plants and is a way to store the energy those plants generate. Software controls the movement of the blocks automatically, responding to changes in power availability across an electric grid to charge and discharge the power that’s being generated.

The development of this technology is the culmination of years of work at Idealab, the Pasadena, Calif.-based startup incubator, and Energy Vault, the company it spun out to commercialize the technology, has just raised $110 million from SoftBank Vision Fund to take its next steps in the world.

Energy storage remains one of the largest obstacles to the large-scale rollout of renewable energy technologies on utility grids, but utilities, development agencies and private companies are investing billions to bring new energy storage capabilities to market as the technology to store energy improves.

The investment in Energy Vault is just one indicator of the massive market that investors see coming as power companies spend billions on renewables and storage. As The Wall Street Journal reported over the weekend, ScottishPower, the U.K.-based utility, is committing to spending $7.2 billion on renewable energy, grid upgrades and storage technologies between 2018 and 2022.

Meanwhile, out in the wilds of Utah, the American subsidiary of Japan’s Mitsubishi Hitachi Power Systems is working on a joint venture that would create the world’s largest clean energy storage facility. That 1 gigawatt storage would go a long way toward providing renewable power to the Western U.S. power grid and is going to be based on compressed air energy storage, large flow batteries, solid oxide fuel cells and renewable hydrogen storage.

“For 20 years, we’ve been reducing carbon emissions of the U.S. power grid using natural gas in combination with renewable power to replace retiring coal-fired power generation. In California and other states in the western United States, which will soon have retired all of their coal-fired power generation, we need the next step in decarbonization. Mixing natural gas and storage, and eventually using 100% renewable storage, is that next step,” said Paul Browning, president and CEO of MHPS Americas.

Energy Vault’s technology could also be used in these kinds of remote locations, according to chief executive Robert Piconi.

Energy Vault’s storage technology certainly isn’t going to be ubiquitous in highly populated areas, but the company’s towers of blocks can work well in remote locations and have a lower cost than chemical storage options, Piconi said.

“What you’re seeing there on some of the battery side is the need in the market for a mobile solution that isn’t tied to topography,” Piconi said. “We obviously aren’t putting these systems in urban areas or the middle of cities.”

For areas that need larger-scale storage that’s a bit more flexible there are storage solutions like Tesla’s new Megapack.

The Megapack comes fully assembled — including battery modules, bi-directional inverters, a thermal management system, an AC breaker and controls — and can store up to 3 megawatt-hours of energy with a 1.5 megawatt inverter capacity.

The Energy Vault storage system is made for much, much larger storage capacity. Each tower can store between 20 and 80 megawatt hours at a cost of 6 cents per kilowatt hour (on a levelized cost basis), according to Piconi.

The first facility that Energy Vault is developing is a 35 megawatt-hour system in Northern Italy, and there are other undisclosed contracts with an undisclosed number of customers on four continents, according to the company.

One place where Piconi sees particular applicability for Energy Vault’s technology is around desalination plants in places like sub-Saharan Africa or desert areas.

Backing Energy Vault’s new storage technology are a clutch of investors, including Neotribe Ventures, Cemex Ventures, Idealab and SoftBank.

Audi e-tron becomes the first all-electric vehicle to earn IIHS top safety rating

By Kirsten Korosec

The 2019 Audi e-tron has become the first battery-electric vehicle to earn a top safety rating from the Insurance Institute for Highway Safety, an achievement that Tesla and other electric models like the Chevy Bolt have not been able to capture.

Scoring an IIHS top safety award isn’t easy. A vehicle has to earn good ratings in six crashworthiness evaluations, as well as an advanced or superior rating for front crash prevention and a good headlight rating.

IIHS said Wednesday that the e-tron fulfills the criteria to earn a top safety rating with standard equipment. The vehicle performed well in crashworthiness testing, earning good ratings in the driver-side small overlap front, passenger-side small overlap front, moderate overlap front, side, roof strength and head restraint tests, according to IIHS.

The SUV’s standard front crash prevention system rated superior in IIHS track tests. It avoided a collision in the 25 mph test and reduced its impact speed by an average of 11 mph in the 12 mph test. Its forward collision warning component meets National Highway Traffic Safety Administration criteria.

The award provides a much needed boost to the e-tron. There’s a lot riding on the e-tron, the German automaker’s first mass-produced electric vehicle. And while TechCrunch’s Matt Burns found it quick, comfortable and familiar, the vehicle has had a rocky start that included a voluntary recall in the U.S. due to the risk of battery fire.

Tesla has gotten close to the top safety pick designation. A Tesla Model S was tested in 2017 and performed well, but fell short of earning the top score due to poor headlights and an “acceptable” score in the small overlap crash test. The IIHS has never tested the Tesla Model X.

The electric automaker does have another chance. This time, it’s with the Tesla Model 3, which IIHS is currently testing, according to a recent tweet from the organization.

Tests of the 2019 Tesla Model 3 commence next week with the side crash test. pic.twitter.com/yXtbGDC9h9

— IIHS (@IIHS_autosafety) August 7, 2019

The Model 3 has already achieved an all-around five-star safety rating from the National Highway Traffic Safety Administration. Despite the high marks, NHTSA and Tesla have tussled over how the automaker has characterized the rating in an October 7 blog post when it said the Model 3 had achieved the lowest probability of injury of any vehicle the agency ever tested.

Earlier this month, Hyundai’s hydrogen fuel cell SUV, the Nexo, became the first fuel cell vehicle to be tested and to earn IIHS’s top safety award. 

Hyundai’s fuel cell SUV just scored a top safety rating from IIHS

By Kirsten Korosec

The Hyundai Nexo, a hydrogen fuel cell SUV first unveiled at CES 2018, has earned a top safety award from the Insurance Institute for Highway Safety.

The award, announced Thursday, marks two firsts. The Nexo is the first fuel cell vehicle to earn IIHS’s top safety award. Then again, it’s also the first fuel cell vehicle IIHS has ever tested.

The top safety pick+ award is for 2019 Hyundai Nexo vehicles built after June 2019, when the automaker adjusted the headlights to provide better visibility through curves. Any Nexo vehicles produced prior to June still get high marks, but fall short of the top award. Instead, they qualify for IIHS’ second-tier top safety award. The Nexo joins other 2019 Hyundai and Kia vehicles to earn top safety pick+ awards, including the Hyundai Elantra, Kia Niro hybrid and Kia Soul.

The market for the Nexo is small right now. Within the U.S., the new vehicle, which has a base price of $58,300, is only sold in California. Deliveries of the vehicle to California residents began in December 2018. The vehicle has been available to customers in Korea since early 2018.

Normally, such a limited vehicle wouldn’t be included in IIHS’s routine test schedule, the organization said. Hyundai nominated the vehicle for testing. IIHS says it ended up benefiting too because it gave the organization an early opportunity to evaluate a hydrogen fuel cell vehicle.

Earning this top safety pick+ award isn’t easy. A vehicle has to earn good ratings in the driver-side small overlap front, passenger-side small overlap front, moderate overlap front, side, roof strength and head restraint tests. It also needs an advanced or superior rating for front crash prevention and a good headlight rating.

The Nexo, a midsize luxury SUV, has good ratings in all six crashworthiness tests, IIHS said. The Nexo’s standard front crash prevention system earned a superior rating. The vehicle avoided collisions in 12 mph and 25 mph track tests and has a forward collision warning system that meets National Highway Traffic Safety Administration criteria, according to IIHS.

The Nexo could someday become more common, and even used in fleets. Self-driving vehicle startup Aurora has been working with Hyundai and Kia for the last year to integrate its “Driver” into Hyundai’s Nexo.

NASA taps SpaceX, Blue Origin and 11 more companies for Moon and Mars space tech

By Darrell Etherington

NASA has selected 13 companies to partner with on 19 new specific technology projects it’s undertaking to help reach the Moon and Mars. These include SpaceX, Blue Origin and Lockheed Martin, among others, with projects ranging from improving spacecraft operation in high temperatures, to landing rockets vertically on the Moon.

Jeff Bezos-backed Blue Origin will work with NASA on developing a navigation system for “safe and precise landing at a range of locations on the Moon” in one undertaking, and also on readying fuel cell-based power system for its Blue Moon lander, revealed earlier this year. The final design spec will provide a power source that can last through the lunar night, or up to two weeks without sunlight in some locations. It’ll also be working on further developing engine nozzles for rockets with liquid propellant that would be well-suited for lunar lander vehicles.

SpaceX will be working on technology that will help move rocket propellant around safely from vehicle to vehicle in orbit, a necessary step to building out its Starship reusable rocket and spacecraft system. The Elon Musk-led private space company will also be working with Kennedy Space Center on refining its vertical landing capabilities to adapt it to work with large rockets on the moon, where lunar regolith (aka Moon dust) makes and the low-gravity, zero atmosphere environment can complicate the effects of controlled descents.

Lockheed Martin will be working on using solid-state processing to create metal powder-based materials that can help spacecraft deal better with operating in high-temperature environments, and on autonomous methods for growing and harvesting plants in space, which could be crucial in the case of future long-term colonization efforts.

Other projects will tap Advanced Space, Vulcan Wireless, Aerogel Technologies, Spirit AeroSystem, Sierra Nevada Corporation, Anasphere, Bally Ribbon Mills, Aerojet Rocketdyne, Colorado Power Electronics and Maxar, and you can read about each in detail here.

NASA’s goals with these private partnerships are to both develop at speed, and decrease the cost of efforts to operate crewed space exploration, as part of its Artemis program and beyond.

How parking app SpotHero is preparing for an era of driverless cars

By Kirsten Korosec

On-demand parking app SpotHero wants to be ready for the day when autonomous vehicles are ubiquitous. Its strategy: target the human-driven car-sharing fleets today.

The Chicago-based company, which has operations in San Francisco, New York, Washington, D.C. and Seattle, has launched a new service dubbed SpotHero for Fleets that targets shared mobility and on-demand services.

The service aims to be a one-stop shop for car-sharing and commercial fleets to handle all that goes into ensuring there is access and the right number of designated parking areas on any given day within SpotHero’s large network of 6,500 garages across 300 cities.

That means everything from managing the relationships between garage owners and the fleet companies to proper signage so car-sharing customers can find the vehicles, as well as flexible plans that account for seasonal demands on businesses.

Under the new service, customers are able to source and secure parking inventory in high-traffic areas across multiple cities and pay per use across multiple parking facilities on one invoice to streamline payments. 

The service also aims to solve the crux of accessing commercial garages, Elan Mosbacher, SpotHero’s head of strategy and operations, said in a recent interview.

“How does a car get in and out of the garage when the driver driving that car isn’t necessarily the one paying for the parking?,” Mosbacher asked rhetorically. The service provides access to gated parking facilities to provide more pickup and drop-off points for shared cars.

The company’s core competency — its bread and butter since launching in 2011 — has been directed at connecting everyday drivers to parking spots in thousands of garages across North America.

That focus has expanded in the past eight years, with the company adding other services as urban density has increased and on-street parking has become more jumbled and confused thanks to an increase in traffic, ride-hailing and on-demand delivery services that take up valuable curb space.

“Our platform has evolved as more trends emerge around everything from connected cars to urban mobility apps to fleets to autonomous vehicles more and more companies are reaching out to us about how to leverage our network and our API to service parking from their interface to their audience of drivers,” said Mosbacher.

For instance, just last month, SpotHero announced it was integrating Waze, the navigation app owned by Google, into its app to help customers find the best and most direct route to their pre-booked parking spot. The company has also partnered with Moovit as well as expanded into the corporate world with firms such as the Associated Press, Caterpillar and US Cellular.

SpotHero could continue to scale up with this consumer-focused business model. However, the company saw two overlapping opportunities that center around car-sharing fleets.

In the past year, SpotHero has been approached by a number of autonomous vehicles companies acknowledging that one day they’re going to have to solve parking, Mosbacher said. But these companies aren’t even ready to launch pilot programs.

The company realized there was a use case and an opportunity today for human-driven car-sharing fleets.

“What we’re doing now is leveraging our network of services, hardware and software to solve a number of business problems around car-sharing fleets we the hope that the technology, infrastructure improves and accelerates to a point when autonomous vehicles are capable of parking using our network,” Mosbacher said.

That opportunity is poised to get a lot wider in the next decade. Deloitte predicts that by 2030 shared vehicles will overtake personally owned vehicles in urban areas. As car-share fleets grow, companies are increasingly tasked with solving for complex parking needs at scale, according to SpotHero.

The company has signed on car-sharing companies and other commercial fleets, although it’s not naming them yet.

The business of parking — and its potential to tap fleets of human-driven and someday even driverless vehicles — has attracted venture funds. SpotHero has raised $67.6 million to date.

And there’s good reason investors and parking app companies like SpotHero are jumping in to “solve parking.” A study by Inrix released in 2017 found that, on average, U.S. drivers spend 17 hours per year searching for parking at a cost of $345 per driver in wasted time, fuel and emissions.

Google says it doubled Pixel sales year-over-year

By Frederic Lardinois

It looks like the mid-range Pixel 3a is the hit Google surely hoped it would be.

Alphabet reported some pretty good earnings today, but the company’s report tends to be pretty generic, given that it doesn’t provide details for its different business units inside of Google and its other segments. That’s not to say there isn’t good news there for Google. On today’s call, Google CEO Sundar Pichai shared some new stats for the company’s phone line.

“With the launch of Pixel 3a in May, overall Pixel unit sales in Q2 grew more than 2x year over year,” Pichai announced. Part of this growth, he noted, is due to Google greatly expanded its distribution network beyond its own store and Verizon to also include T Mobile, Sprint, US Cellular, Spectrum Mobile and others. He also stressed that the Pixel 3a received Google’s highest Net Promotor Score rating yet.

It surely helps that the Pixel 3a is relatively affordable and compares well to flagship phones without any major tradeoffs. When it launched, reviews were generally very positive, too, which surely helped as well. Unlike previous Pixel launches, the first batch Pixel 3a phones also didn’t face any major hardware problems, something that regularly plagued Google’s earlier efforts.

Facebook ignored staff warnings about ‘sketchy’ Cambridge Analytica in September 2015

By Natasha Lomas

Facebook employees tried to alert the company about the activity of Cambridge Analytica as early as September 2015, per the SEC’s complaint against the company which was published yesterday.

This chimes with a court filing that emerged earlier this year — which also suggested Facebook knew of concerns about the controversial data company earlier than it had publicly said, including in repeat testimony to a U.K. parliamentary committee last year.

Facebook only finally kicked the controversial data firm off its ad platform in March 2018 when investigative journalists had blown the lid off the story.

In a section of the SEC complaint on “red flags” raised about the scandal-hit company Cambridge Analytica’s potential misuse of Facebook user data, the SEC complaint reveals that it already knew of concerns raised by staffers in its political advertising unit — who described CA as a “sketchy (to say the least) data modeling company that has penetrated our market deeply.”

Screenshot 2019 07 25 at 11.43.17

Amid a flurry of major headlines for the company yesterday, including a $5 billion FTC fine — all of which was selectively dumped on the same day media attention was focused on Mueller’s testimony before Congress — Facebook quietly disclosed it had also agreed to pay $100 million to the SEC to settle a complaint over failures to properly disclose data abuse risks to its investors.

This tidbit was slipped out toward the end of a lengthy blog post by Facebook general counsel Colin Stretch, which focused on responding to the FTC order with promises to turn over a new leaf on privacy.

CEO Mark Zuckerberg also made no mention of the SEC settlement in his own Facebook note about what he dubbed a “historic fine.”

As my TC colleague Devin Coldewey wrote yesterday, the FTC settlement amounts to a ‘“get out of jail” card for the company’s senior execs by granting them blanket immunity from known and unknown past data crimes.

“Historic fine” is therefore quite the spin to put on being rich enough and powerful enough to own the rule of law.

And by nesting its disclosure of the SEC settlement inside effusive privacy washing discussion of the FTC’s “historic” action, Facebook looks to be hoping to detract attention from some really awkward details in its narrative about the Cambridge Analytica scandal that highlight ongoing inconsistencies and contradictions, to put it politely.

The SEC complaint underlines that Facebook staff were aware of the dubious activity of Cambridge Analytica on its platform prior to the December 2015 Guardian story — which CEO Mark Zuckerberg has repeatedly claimed was when he personally became aware of the problem.

Asked about the details in the SEC document, a Facebook spokesman pointed us to comments it made earlier this year when court filings emerged that also suggested staff knew in September 2015. In this statement, from March, it says “employees heard speculation that Cambridge Analytica was scraping data, something that is unfortunately common for any internet service,” and further claims it was “not aware of the transfer of data from Kogan/GSR to Cambridge Analytica until December 2015,” adding: “When Facebook learned about Kogan’s breach of Facebook’s data use policies, we took action.”

Facebook staffers were also aware of concerns about Cambridge Analytica’s “sketchy” business when, around November 2015, Facebook employed psychology researcher Joseph Chancellor — aka the co-founder of app developer GSR — who, as Facebook has sought to paint it, is the “rogue” developer that breached its platform policies by selling Facebook user data to Cambridge Analytica.

This means Facebook employed a man who had breached its own platform policies by selling user data to a data company which Facebook’s own staff had urged, months prior, be investigated for policy-violating scraping of Facebook data, per the SEC complaint.

Fast-forward to March 2018 and press reports revealing the scale and intent of the Cambridge Analytica data heist blew up into a global data scandal for Facebook, wiping billions off its share price.

The really awkward question that Facebook has continued not to answer — and which every lawmaker, journalist and investor should therefore be putting to the company at every available opportunity — is why it employed GSR co-founder Chancellor in the first place?

Chancellor has never been made available by Facebook to the media for questions. He also quietly left Facebook last fall — we must assume with a generous exit package in exchange for his continued silence. (Assume because neither Facebook nor Chancellor have explained how he came to be hired.)

At the time of his departure, Facebook also made no comment on the reasons for Chancellor leaving — beyond confirming he had left.

Facebook has never given a straight answer on why it hired Chancellor. See, for example, its written response to a Senate Commerce Committee’s question — which is pure, textbook misdirection, responding with irrelevant details that do not explain how Facebook came to identify him for a role at the company in the first place (“Mr. Chancellor is a quantitative researcher on the User Experience Research team at Facebook, whose work focuses on aspects of virtual reality. We are investigating Mr. Chancellor’s prior work with Kogan through counsel”).

Screenshot 2019 07 25 at 12.02.10

What was the outcome of Facebook’s internal investigation of Chancellor’s prior work? We don’t know because again Facebook isn’t saying anything.

More importantly, the company has continued to stonewall on why it hired someone intimately linked to a massive political data scandal that’s now just landed it a “historic fine.”

We asked Facebook to explain why it hired Chancellor — given what the SEC complaint shows it knew of Cambridge Analytica’s “sketchy” dealings — and got the same non-answer in response: “Mr Chancellor was a quantitative researcher on the User Experience Research team at Facebook, whose work focused on aspects of virtual reality. He is no longer employed by Facebook.”

We’ve asked Facebook to clarify why Chancellor was hired despite internal staff concerns linked to the company to which his company was set up to sell Facebook data; and how of all possible professionals it could hire Facebook identified Chancellor in the first place — and will update this post with any response. (A search for “quantitative researcher” on LinkedIn’s platform returns more than 177,000 results of professionals who are using the descriptor in their profiles.)

Earlier this month a U.K. parliamentary committee accused the company of contradicting itself in separate testimonies on both sides of the Atlantic over knowledge of improper data access by third-party apps.

The committee grilled multiple Facebook and Cambridge Analytica employees (and/or former employees) last year as part of a wide-ranging enquiry into online disinformation and the use of social media data for political campaigning — calling in its final report for Facebook to face privacy and antitrust probes.

A spokeswoman for the DCMS committee told us it will be writing to Facebook next week to ask for further clarification of testimonies given last year in light of the timeline contained in the SEC complaint.

Under questioning in Congress last year, Facebook founder Zuckerberg also personally told Congressman Mike Doyle that Facebook had first learned about Cambridge Analytica using Facebook data as a result of the December 2015 Guardian article.

Yet, as the SEC complaint underlines, Facebook staff had raised concerns months earlier. So, er, awkward.

There are more awkward details in the SEC complaint that Facebook seems keen to bury, too — including that as part of a signed settlement agreement, GSR’s other co-founder, Aleksandr Kogan, told it in June 2016 that he had, in addition to transferring modeled personality profile data on 30 million Facebook users to Cambridge Analytica, sold the latter “a substantial quantity of the underlying Facebook data” on the same set of individuals he’d profiled.

This U.S. Facebook user data included personal information such as names, locations, birthdays, gender and a sub-set of page likes.

Raw Facebook data being grabbed and sold does add some rather colorful shading around the standard Facebook line — i.e. that its business is nothing to do with selling user data. Colorful because while Facebook itself might not sell user data — it just rents access to your data and thereby sells your attention — the company has built a platform that others have repurposed as a marketplace for exactly that, and done so right under its nose…

Screenshot 2019 07 25 at 12.40.29

The SEC complaint also reveals that more than 30 Facebook employees across different corporate groups learned of Kogan’s platform policy violations — including senior managers in its comms, legal, ops, policy and privacy divisions.

The U.K.’s data watchdog previously identified three senior managers at Facebook who it said were involved in email exchanges prior to December 2015 regarding the GSR/Cambridge Analytica breach of Facebook users data, though it has not made public the names of the staff in question.

The SEC complaint suggests a far larger number of Facebook staffers knew of concerns about Cambridge Analytica earlier than the company narrative has implied up to now. Although the exact timeline of when all the staffers knew is not clear from the document — with the discussed period being September 2015 to April 2017.

Despite 30+ Facebook employees being aware of GSR’s policy violation and misuse of Facebook data — by April 2017 at the latest — the company leaders had put no reporting structures in place for them to be able to pass the information to regulators.

“Facebook had no specific policies or procedures in place to assess or analyze this information for the purposes of making accurate disclosures in Facebook’s periodic filings,” the SEC notes.

The complaint goes on to document various additional “red flags” it says were raised to Facebook throughout 2016 suggesting Cambridge Analytica was misusing user data — including various press reports on the company’s use of personality profiles to target ads; and staff in Facebook’s own political ads unit being aware that the company was naming Facebook and Instagram ad audiences by personality trait to certain clients, including advocacy groups, a commercial enterprise and a political action committee.

“Despite Facebook’s suspicions about Cambridge and the red flags raised after The Guardian article, Facebook did not consider how this information should have informed the risk disclosures in its periodic filings about the possible misuse of user data,” the SEC adds.

This solar array expands itself at the right temperature

By Devin Coldewey

Wouldn’t it be nice to have a solar panel that’s only there when the sun shines on it? That’s the idea behind this research project, which uses shape-shifting materials to make a solar panel grow from a compressed state to an expanded one with nothing more than a change in temperature.

The flower-like prototype device is made of what’s called a “shape-memory polymer,” a material that can be shaped when cool to one form, then when heated will attempt to return to its original, natural configuration. In this case the cool form is a compressed disc, and the warm one is a much wider one.

The transition (demonstrated here in warm water for simplicity) takes less than a minute. It’s guided by a network of hinged joints, the structure of which was inspired by the children’s toy known as a Hoberman sphere, which changes from a small, spiky ball to a larger spherical one when thrown.

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The cooled-down material would stay rigid during, say, deployment on a satellite. Then when the satellite encounters the sun, the mechanism would bloom into the full-sized array, no power necessary. That would potentially save space on a satellite that can’t quite fit a battery or spare solar array to kick-start a larger one.

For now the transformation is one-way; the larger disc must be manually folded back into the smaller configuration — but one can imagine how once powered up, a separate mechanism could accomplish that, stowing itself away until the next chance to absorb some sunlight appears.

Don’t expect to see this on any spacecraft next year, but it’s definitely a cool (and warm) idea that could prove more than a little useful for small satellites and the like in the future. And who knows? Maybe you’ll have a garden of these little blooming arrays on your roof before that.

The research, from Caltech and ETHZ, is documented in the journal Physics Review Applied.

Why eVTOLs could be providing regional air service sooner than you think

By Darrell Etherington

At Uber’s Elevate summit in Washington, DC earlier this month, researchers, industry leaders and engineers gathered to celebrate the approaching advent of on-demand air service. For Dr. Anita Sengupta, co-founder and Chief Product Office at Detroit’s Airspace Experience Technologies (abbreviated ASX), it was an event full of validation of her company’s specific approach to making electric vertical take-off and landing craft a working, commercially viable reality.

ASX’s eVTOL design is a tilt-wing design, which is distinct from the tilt-rotor design you might see on some of the splashier concept vehicles in the category. As you might’ve inferred from the name of each type of aircraft, with tilt-wing designs the entire wing of the aircraft can change orientation, while on tilt-rotor, just the rotor itself adjust independent of the wing structure.

The benefits of ASX’s tilt-wing choice, according to Sengupta, is speed to market and compatibility with existing regulatory and pilot licensing frameworks – and that’s why ASX could be providing cargo transport service relatively quickly for paying customers, with passenger travel to follow once regulators and the public get comfortable with the idea.

ASX founding team Jon Rimanelli and Dr. Anita Sengupta. Credit: ASX

“Depending upon the aircraft configuration you selected, like us, for example, we’re basically a fixed wing aircraft,” Sengupta explained. “So we would not be classified as a rotorcraft, we’d be classified as a fixed wing aircraft with multi-engine, just with obviously special certification features for the VTOL capability. And of course, special check out for the pilots, but the pilots also would be fixed wing aircraft, pilots, they wouldn’t be helicopter pilots.”

ASX’s vehicle design means that it can either take off vertically when space is tight, or do a more traditional short horizontal take off like the airplanes we use every day. That not only makes it easier to use for pilots with more conventional training and experience, but it also means it can slot into existing infrastructure relatively easily and make use of underused regional airports that already dot the U.S.

“Most people who don’t fly for fun don’t realize that there are general aviation airports all over the place, that are underutilized, because only people like me, who fly for fun [Sengupta is also a pilot], use them frequently,” she said. ” Like where we’re located at Detroit City Airport, on a given day, there could sometimes only be like three planes that go in and out of it. So this is infrastructure, which is already funded, paid for and operated by governments, but isn’t utilized. And you can use them in this new UAM [Urban Air Mobility] space, whether it’s for people or for cargo, it’s actually a really good thing, because the challenge of any new transportation system is the cost of infrastructure.”

ASX has also moved quickly to get aircraft up in the sky, which is better help in terms of its own path to commercialization. It’s built six scaled down demonstration and testing aircraft, including five one-fifth scale and one that’s one-third the size of the eventual production version. These testing aircraft can demonstrate all their modes of flight within easy view of the Detroit City Airport airspace control and monitoring.

“We believe, and when you’re really cash strapped your small company, getting a lot of work at the subscale just allows you to do a lot more iterating, prototyping, and learning, basically how to control the vehicle,” Sengupta told me. “From a software perspective, it’s only when you get to that point, when you’re comfortable with a configuration, that it’s really worth your while to go off and build the full scale one. So with this next round [of funding, ASX’s second after raising just over $1 million last year]we’re going to go off and build this out at scale.”

Ultimately, Sengupta and ASX want to help usher in an era of air travel that creates efficiencies by changing the economics of regional and electric flight, and its attracting interest from investors and industry partners alike, including global transportation service provider TPS Logistics, with which it just signed a new MOU to work together on sussing out the opportunities of the eVTOL logistics market.

“Right now you you see a lot of congestion in airports, within beings, you’re going to have congestion coming in, you’re going to have to build a different professional parking lots and runways and all kinds of huge expense, if you can use these general aviation airports as regional centers to do that travel, you can take it away from the commercial, so they actually solve a lot of other problems,” Sengupta said. “For routes of let’s say 300 miles, you probably would need to do a hybrid power solution first, just because the energy density better isn’t there yet. But that’s the whole nicer than having it be fully fueled. And then hopefully […] hydrogen fuel cells is obviously something where you can get the energy needed in each of those regional flights. So by kick-starting this electric aviation use case for the shorter range, urban flights, you kind of kickstart the industry to push it over to fully electric vehicles for regional travel.”

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