APPLE UPSTAGES AMAZON IN SELECTING NEW TECH HUB LOCATIONS
One tech giant strung dozens of North American cities through a circus-like contest that led mayors and governors to desperately pitch their regions — and offer huge sums of public money — in hopes of landing a gleaming new corporate campus. The other swept in quietly before making its big move.
The outcome was largely the same: Amazon and Apple are running out of room in their West Coast hometowns and establishing a major foothold in a handful of U.S. cities already known as second-tier technology hubs.
But this week, at least, Apple may have won the prize for completing its search with the fewest hurt feelings.
Apple announced plans to build a $1 billion campus in Austin, Texas, that will create at least 5,000 jobs ranging from engineers to call-center agents while adding more luster to a city that has already become a destination for tech startups and bigger companies.
The decision comes 11 months after Apple CEO Tim Cook disclosed plans to open a major office outside California on the heels of a massive tax cut on overseas profits, which prompted the company to bring about $250 billion back to the U.S.
The company said it will also open offices in Seattle, San Diego and Culver City, California, each employing at least 1,000 workers over the next three years. Apple also pledged to add hundreds of jobs each in New York; Pittsburgh; Boston; Boulder, Colorado; and Portland, Oregon.
“They are just picking America’s most established superstar cities and tech hubs,” said Richard Florida, an urban development expert at the University of Toronto.
Apple’s scattershot expansion reflects the increasing competition for engineers in Silicon Valley, which has long been the world’s hightech capital. The bidding for programmers is driving salaries higher, which in turn is catapulting the average prices of homes in many parts of the San Francisco Bay Area above $1 million. Many high-tech workers are thus choosing to live elsewhere, causing major tech employers such as Apple, Amazon and Google to look in new places for the employees they need to pursue their future ambitions.
“Talent, creativity and tomorrow’s breakthrough ideas aren’t limited by region or ZIP code,” Cook said in a statement.
Cities around the country offered financial incentives in an attempt to land Apple’s new campus, but Cook avoided a high-profile competition that pitted them against one
another, as Amazon had before deciding to build huge new offices in New York and Virginia.
Amazon could receive up to $2.8 billion in incentives in New York, depending on how many it ultimately hires there, and up to $750 million in Virginia. Apple will receive up to $25 million from a jobs-creation fund in Texas in addition to property-tax rebates, which still need approval. The figure is expected to be a small fraction of what Amazon received.
The government incentives offered to Apple seem “more in the line of normal business site selection” compared with Amazon’s public “shakedown,” said Mark Muro, a senior fellow at the Brookings Institution’s Metropolitan Policy Center.
“There’s a growing backlash in the country against the entire process of subsidies and relocation inducements,” Muro said. “That said, the Apple numbers for a very significant increase in jobs are much less eye-popping than the Amazon numbers.”
The spots where Amazon and Apple decided to expand were obvious choices, based on an analysis released earlier this year by CBRE Research. Washington, D.C., ranked as the third best place in North America for tech talent, behind Silicon Valley and Seattle. New York ranked fifth and Austin sixth. No. 4 was outside the U.S.: Toronto.
The new Austin campus, with about 3 million square feet (nearly 280,000 square meters) of office space, will be about a mile from another large office that Apple opened five years ago. Apple currently employs about 6,200 workers in Austin, making it the company’s largest hub outside Silicon Valley even before the expansion.
The new jobs are expected to mirror the same mix Apple already has at its Cupertino, California, headquarters, ranging from jobs in technology and research that pay well over $100,000 to lower-paying positions in customer call centers.
Cities have been eager to bring in more tech employers because their hires often make six-figure salaries. That can ripple through the economy, with new employees filling restaurants and theaters, buying property and paying taxes.
But an influx of affluent tech workers can also drive up rent and home prices, making it more difficult for those in lower-paying jobs to make ends meet.
“When tech companies invest in a place and try to hire thousands of workers, it is of course good news for tech workers who are already there and want to be there,” said Jed Kolko, chief economist for employment website Indeed.com. “But it can put a strain on the housing market and transportation.”
Texas Gov. Greg Abbott hailed Apple’s new campus as a milestone development that “truly elevates Austin as one of the premier technology hubs in the entire world.”
Apple’s move was cheered by President Donald Trump, who thanked Cook in a tweet for “agreeing” to expand its U.S. operations. It was sharp change in tone from September, when Trump responded to Cook’s concerns about tariffs by telling Apple to make its products in the U.S. instead of China. Apple uses plants in China and elsewhere to produce components and assemble its products.
2018’s biggest gaming titles revealed evolutions in the iOS mobile gaming market. From subscriptions and intellectual property to ad revenue and cross-platform promotions, take a closer look at the changing gaming landscape, and see what the future holds for the industry.
THE BIGGEST YEAR
Whether you consider yourself a hardcore Fortnite player or you just enjoy a game of Candy Crush from time to time, it’s hard to deny that 2018 has been an incredible year in the world of mobile gaming. This year, more than 2.3 billion of us have tapped, shook, and flicked our smartphones and 46% of us - 1.1 billion - have spent money paying for premium addons. That’s not all - for the first time ever, we’ve helped mobile gaming take over desktop and console gaming, with tablet and smartphone gaming increasing more than 25% and adding an eye-watering $70.3 billion to the coffers of big names and independents.
Interestingly, it’s not just the United States and Western markets that have been spending big money on their favorite games. China comes out on top of the Game Revenues Ranking, spending an incredible $37.9 billion on mobile games this year. The US and Japan follow in second and third on mobile spend, splashing out $30.4 billion and $19.2 billion respectively. European markets are catching up, too, with Germans spending close to $5 billion this year on iPhone and Android games, while South Korea spent $5.6 billion on mobile games and add-ons.
With smartphone adoption at its highest level (32.3% of citizens worldwide have a phone)
since records began, and affordable smartphone manufacturers dominating the mobile market, more and more of us have access to the Google Play Store and App Store and are spending our hard-earned cash on entertainment. Huawei, for example, is set to grow to $100 billion in revenue before the New Year after investing in marketing around the world, and is not only challenging the likes of Samsung and Apple but is providing consumers in both Asian and Western markets with low-cost, high-powered phones suitable for gaming.
According to some technology journalists and gaming analysts, 2018 was the year when the mobile gaming market finally started to take itself seriously. Indeed, we’ve gone years trying out one-hit wonders such as Flappy Bird and Temple Run, but with serious game developers now turning their attention to the market in a bid to create the next global smash, we have experienced a whole wave of innovation in 2018 - one that will follow into the years to come.
GOT THE POWER
Although smartphones have been arguably the most popular gaming platform for the past couple of years, they haven’t been able to compete with the likes of the XBox, PlayStation or desktop computers. Until now, that is. In 2018, many news outlets reported on the fact that it makes more sense to buy an iPhone XS for $1,000 than it does to buy a $1,000 MacBook, as the former offers more power and functionality and is more likely to be used to its potential.
Some technology analysts say that the processors in the latest iPhones are ‘paving the
way’ for a hybrid iPhone and MacBook line, with the latter using the same Apple A12X chip to power its PCs. Indeed, a comparison of the XS Max and MacBook Pro from technology fan Alex B showed very little difference between the two devices’ CPU and GeekBench specs, which means that many are now abandoning their desktop computers and laptops and choosing smartphones instead.
In 2018, the computers in our pockets are just as powerful - if not more powerful - than the computers we use in the gaming room, and developers are cashing in on the ever-closing technological gap. Games that five years ago would only have been available on PC are now being released to our smartphones, which is making the industry more exciting than ever before. Fortnite, for example, is arguably the biggest gaming hit of the year - in May of 2018 alone, a month after launching on iOS, developers generated a record-breaking $318 million and end-of-year turnover is set to be in the hundreds of millions, all thanks to a single game.
What’s so interesting about Fortnite, however, is that the Fortnite Battle Royale was originally released to games consoles and computers in 2017, but it was only when it was ported to iOS and Android this year that it really took off. Rather than being a watered-down version of its desktop experience, the mobile game is an identical port and it’s cross-platform; you can do everything on Fortnite on iOS that you’d be able to do on Fortnite on the computer, which transformed the industry and is spearheading wider change. PlayerUnknown’s Battlegrounds (PUBG) is following the same business plan and
also generated incredible profits in the first month following its port to iOS. In March of this year alone, PUBG generated $103 million in sales through one-off $30 software licenses that it made available for purchase on Steam, but is now looking to new revenue streams such as in-app purchases to take the business to the next level and to diversify its offering.
In-app purchases have been the big topic of the year, with gaming developers moving away from the premium or subscription-based model and allowing consumers to access its content for free, with the option of paying for additional features. Fortnite’s Battle Pass is the biggest success story in this niche, allowing developer Epic to enjoy ongoing profitability from its game, rather than offering one-time purchases or useless in-game currency that is devalued through promotions and discounts. The game adopts a unique microtransaction system, which allows players to spend $10 on a Battle Pass that unlocks new emotes, skins, pets, and cosmetics in the game - and the best part is, players still have to work to access them. The Passes are addictive, rely on users engaging with the game, and play on the Fear of Missing Out - limited time outfits and cosmetics are in high-demand amongst players, which is only heightened amongst the younger generation who are following successful streamers and YouTubers who are making millions off of streaming games like Fortnite.
TRAPPING AND PHISHING
2018 hasn’t been an entirely positive year in the mobile gaming market, however. Just as legitimate developers are spending all of their
time coming up with new ways to get players to part with their cash, ‘bad actors’ are spending their time trying to phish users and capture their data and money. According to data from mobile security company Wandera, 25% of all webbased mobile phishing attacks come from developers creating fake games, only to trap users into signing up for in-app subscriptions or phishing data to use on other sites. Many have created knock-off versions of popular games, or add-ons designed to offer free currency or exclusive benefits, and young and inexperienced users are downloading them without understanding the potential consequences. Remember to only use the dedicated App Store and download apps that are from trusted and known developers with lots of reviews and comments.
But developers should also take some of the blame. Back to Fortnite, who was criticized by Google when it encouraged users to download its game outside of the Google Play Store in an attempt to keep more of its inapp purchase profits; if it was to appear on the Play Store, Google would take 30%. This led to a whole host of fake Fortnite APK packages being distributed online, with some gamers inputting their personal data and Fortnite passwords, only to be then hacked.
Reporting phishing scams to Apple or Google and remaining vigilant is key. Always rely on the App Store and Google Play Store for inapp purchases, and never hand over sensitive information or enter your passwords on websites or on social media unless it’s through verified and official sources. Better still, take advantage of two-factor authentication and only
play games on a trusted device that only you have access to, or your progress could be lost.
2019 IN MOBILE GAMING
Xbox and PlayStation, between them, still generate hundreds of millions in revenue, but new players like the Nintendo Switch are entering the fold and encouraging users to look outside of their traditional gaming setups. Mobile gaming, too, will continue to add to the mix, and the success of 2018 will no doubt help to change the industry. Blizzard, for example, recently announced plans for a new game in the Diablo series that will be exclusive to mobile devices - although the announcement received significant backlash from fans and hardcore players. With more and more gaming studios taking their titles to smartphones and tablets, and with both Android and iOS offering new advancements in augmented reality to power the next generation of games, like the ever-popular Pokemon Go and iOS 12-exclusive LEGO AR Studio, the industry is set to continue to grow at new speeds and utilize the hardware on our latest smartphones to maximize gameplay performance and deliver next-generation experiences.
Also set to make a splash in 2019 is the port. Some of the world’s most iconic gaming titles, like PAC-MAN, Sonic The Hedgehog 2 and RollerCoaster Tycoon have been ported to mobile, sparking a wave of new releases and satisfying cravings from older players. On top of that, online games will also make a splash in the mobile market in 2019, with titles such as OldSchool RuneScape, one of the world’s most successful MMORPGs, on iOS and Android. The cross-platform title has attracted more than 100,000 players since expanding to mobile.
Whether you’re into shooters and strategy games, or you prefer something more lowkey, there is no denying that mobile gaming is changing. No longer does an iOS game have to be a watered-down version of a popular intellectual property title, nor does a tablet gaming experience have to be clunky and littered with ads. With new business models, investments, and innovations across the sector, mobile gaming has never been so exciting. Time to play!