The UpStream (Page 164)

Zynga Still in Trouble After Second Straight Quarter of Missed Projections

posted Sunday Aug 10, 2014 by Nicholas DiMeo

Zynga Still in Trouble After Second Straight Quarter of Missed Projections

It's possible that former Xbox exec and current Zynga CEO Don Mattrick might not be able to turn the company around. Even after huge executive changes a few months ago, the game studio is still rolling down hill and both stock and morale are dropping fast.

After not reaching sales predictions for the second consecutive quarter, Mattrick was quick to point out that Zynga's best days are still ahead.

We aspire to do better and improve execution across our business. We are in the midst of a multiyear transformation, and we are building Zynga and NaturalMotion against a growing market opportunity.

What worked for Zynga this past quarter? Words with Friends is apparently still popular and reached its sales target, and the casino and farm games also did quite well. Zynga Poker's delayed launch didn't help sales though, as the game is still undergoing testing and development even though it was supposed to launch a month ago. On top of that, Mattrick mentioned that a handful of other games that were supposed to launch by holiday wouldn't come out until 2015. The good news is that mobile games continued to be a success for the company. Zynga's mobile sales surpassed those of its Web games for the first time in company history.

Zynga is also banking on its first sports game, NFL Showdown, which is currently in testing in select markets. In fact, many of Zynga's games currently reside in limited market testing, as the company believes in gaining tons of feedback from its current customer base before launching a title full-scale. Additionally, Zynga will be trying out other licensing projects too, with something possibly coming out of the Tiger Woods camp, as well as the Looney Toons franchise.

Can these games get Zynga past what Mattrick is calling "that awkward transition period" and keep its 2,000 employees working at the studio? Do you even still play Zynga games? Let us know your thoughts in the comments below.

A Rough, But Expected, Week for Twitch

posted Sunday Aug 10, 2014 by Scott Ertz

A Rough, But Expected, Week for Twitch

When Google purchased Twitch we all knew we were in for some changes. Twitch proves our point this week by announcing a number of policy changes. As you would expect, most of these changes do not make Twitch users happy.

Let's start with the positive. You can now export your videos directly to YouTube. Send YouTube is Google's one stop video repository, this addition make sense. But with Google any new addition means a loss somewhere else. That loss is on Twitch native storage.

Recorded content will now stay on Twitch for only 14 days, unless you're a paying subscriber in which case you'll get 60 days. With limited Twitch storage it will force users to move their videos to YouTube. I suppose thankfully Google has made that easy.

Unfortunately this is going to create a fracture in the ecosystem. Currently if you're looking for a Twitch streamer's content you know where to go; old, new and live alike are all in one place. Now you're going to have to look on YouTube for their previous content and Twitch for their current and live. Luckily Google is an expert on fractured ecosystems.

Next, Twitch will now mute videos that contain copyrighted music. It does make sense that copyrighted music would be muted considering Google's plan is to move the record and content to YouTube, which already has this feature. This does not apply to live streams, however, so get your fill while you're live.

Finally, Twitch's saying goodbye to its founding site After 7 years in service at the site has been shut down permanently. The farewell video from the original founders was posted on Vimeo, not YouTube.

As you might expect the Twitch community is not happy with these changes. In fact many of the high profile broadcasters are looking at other options. The site is advertising directly to Twitch's customer base, posting a blog titled, "Time to switch."

What will happen to the very loyal Twitch fans? Will they stay with Google or move to a competitor? What are your plans? Let us know in the comments.

Microsoft Sues Samsung for Missing Patent Royalty Payments

posted Saturday Aug 9, 2014 by Nicholas DiMeo

Microsoft Sues Samsung for Missing Patent Royalty Payments

It is a sad time when best friends needs to face off in legal battles, but when it comes to royalty payments, Microsoft doesn't play around. The software giant is suing Samsung after the South Korean hardware manufacturer did not pay its royalties in full last fall.

Samsung is supposed to pay Microsoft on patent licenses and stopped doing so after Microsoft made its announcement to acquire Nokia. The lawsuit papers filed on Friday in Manhattan state that the company is seeking the money owed but do not disclose the actual amount.

After the papers were filed, Microsoft took to its corporate blog to talk about the matter. David Howard, Microsoft's deputy general counsel, posted a full assessment of what went down. He mentions how Microsoft doesn't like to fight, especially with its partners, but will do so when agreements are broken.

We don't take lightly filing a legal action, especially against a company with which we've enjoyed a long and productive partnership. Unfortunately, even partners sometimes disagree. After spending months trying to resolve our disagreement, Samsung has made clear in a series of letters and discussions that we have a fundamental disagreement as to the meaning of our contract...

Since Samsung entered into the agreement, its smartphone sales have quadrupled and it is now the leading worldwide player in the smartphone market. Consider this: when Samsung entered into the agreement in 2011, it shipped 82 million Android smartphones. Just three years later, it shipped 314 million Android smartphones...

After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its agreement with Microsoft. In September 2013, after Microsoft announced it was acquiring the Nokia Devices and Services business, Samsung began using the acquisition as an excuse to breach its contract.

Howard goes on to mention that Samsung did not ask the courts if the acquisition was indeed a breach of contract and instead simply stopped paying. So to combat this, Microsoft is asking the courts to settle the issue that Samsung seems to have a problem with. All things considered, it makes sense for Microsoft to go after this money, especially when sales have almost quadrupled and those patent license payments are directly tied to sales and performance.

With the smartphone market shifting after Samsung has taken the top spot and Microsoft has acquired a huge competitor, the ruling here will be a crucial one. Microsoft is still in battle with Motorola over the Android patent royalties and have been since 2010. Up until now, Samsung, LG and HTC have all agreed to the fees. If Samsung comes out the victor, it could be the catalyst for the rest of the group to stop paying as well.

Beats Exec Heads Up iTunes Radio After Apple Acquisition

posted Friday Aug 8, 2014 by Nicholas DiMeo

Beats Exec Heads Up iTunes Radio After Apple Acquisition

With the $3 billion acquisition now in the past, Apple is looking ahead with Beats Electronics. Aside from a possible lawsuit with Bose looming, Apple is quickly blending Beats into its everyday business operations. So much so that former head of Beats Music, Ian Rogers, will now be running iTunes Radio.

We knew that Interscope Records founder Jimmy Iovine and hip hop icon Dr. Dre were already joining the Apple family but now with Rogers coming on to lead the failing Apple music-streaming service, three of the most important people that made Beats successful are now within the Apple empire. Apple posted on its site about the acquisition, saying that,

Today we are excited to officially welcome Beats Music and Beats Electronics to the Apple family. Music has always held a special place in our hearts, and we're thrilled to join forces with a group of people who love it as much as we do. Beats cofounders Jimmy Iovine and Dr. Dre have created beautiful products that have helped millions of people deepen their connection to music. We're delighted to be working with the team to elevate that experience even further. And we can't wait to hear what's next.

So what's next? We're not sure yet. All we know is Rogers has extensive background in running media businesses, as he used to run Yahoo's media operations before moving over to Beats. Sources say that his role will include bringing iTunes Radio to the forefront of the iTunes business model to compete with Pandora and Spotify.

On top of the announcement, Apple is also slashing 200 jobs out of the 700 employees coming over from Beats. The departments losing its positions will be from HR, financing and customer support, all departments where Apple already has covered. Apple has gone on record to say it is looking for new positions for those losing their jobs.

Prenda Law Dealt Final Blow in Appeals Court

posted Sunday Aug 3, 2014 by Scott Ertz

The process of dealing with a troll can be arduous. If you need proof, ask those involved in a Prenda Law suit. The company filed suit against thousands of individuals for illegally downloading pornography owned by Lightspeed Media. Soon after, it was alleged that they themselves planted the torrents with intent to file these suits. Shortly after, Comcast confirmed this theory, ending any chance they had of a legal success. Their appeals cases have not gone better, with even judges harassing them in court.

This week, a seemingly final blow was dealt to the trio of nut jobs, Paul Duffy, John Steele, and Paul Hansmeier - they will be forced to pay full legal fees for successful defendant Anthony Smith, as well as Comcast and SBC Internet, who were regretfully dragged into the ridiculous suit. A lower court already passed this judgment but, as Chief Judge Diane Wood put it,

They did not, however, file a motion either to clarify the nature of the sanctions or to stay the order. Instead, they simply did not pay.

These fees, which have had a 10% idiot fee added, now add up to $287,000. With a ruling this high up, it will set a good precedent for further appeals cases. Maybe one day the copyright trolls will end their insane attacks on individuals, but it doesn't seem like it will happen soon. The concept is not new; RIAA sued people over illegally downloading music, often targeting people who had no physical capability.

In this case, however, the brazen disregard for the legal system, not to mention the intelligence of the individuals involved, might well poison the legal system against the trolling concept. Where RIAA was respectful, Prenda has been truly insane. This might be frustrating for the people currently involved, it could help finally put the whole concept to rest.

ICANN Says Countries Don't Own Their Top-Level Domains

posted Saturday Aug 2, 2014 by Scott Ertz

ICANN Says Countries Don't Own Their Top-Level Domains

A weird series of circumstances has led to a request to the Internet Corporation for Assigned Names and Numbers, which oversees the Internet on behalf of the US government, to turn over ownership of the country code Top-Level Domains for Iran (.ir), North Korea (.kp) and Syria (.sy). The request comes as part of a financial judgment against the countries for sponsoring terrorism. Unfortunately for them, this might not be possible.

ccTLDs are the easily recognized as the two letter suffix at the end of many websites. In the United States, the most common you might come in contact with are .us (United States), .tv (Tuvalu), .fm (Federated States of Micronesia) and .ly (Libya). Obviously some ccTLDs are highly sought-after for their English meanings, with common websites like, and taking advantage of these country codes. All of these suffixes, however, are either managed by someone in the nations in question or on behalf of the country (.tv is managed by GoDaddy).

These ccTLDs are not owned by the countries, though. In fact, they are not owned by anyone. The ICANN describes ccTLDs as "simply the provision of routing and administrative services for the domain names registered within that ccTLD." In other words, they are essentially nothing more than an Internet version of postal codes - a way of describing where the website resides, not who "owns" them. This makes sense, of course, as new TLDs have been added that are not country code related.

The group says that changing the master management would radically change the way the Internet works.

Forced re-delegation of these ccTLDs would destroy whatever value may exist in these ccTLDs, would wipe out the hundreds of thousands of domain name registrations in the ccTLDs, and could lead to fragmentation of the Internet.

There is very little chance that ICANN would agree to change the management if the registrations under those TLDs would be damaged, even if there was a technological way to accomplish this, which it would appear there is not. This is precisely why ICANN made the decision to de-centralize the infrastructure in the first place.

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