Start up: Spotify hits 30m, Google’s Syria wish, Apple’s iPhone aim, the truth behind Powa, and more

Is it really a good idea to do a charity parachute jump? Photo by puritani35 on Flickr.

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A selection of 11 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Spotify hits 30 million subscribers » The Verge

Micah Singleton:

»Spotify has 30 million paid subscribers, CEO Daniel Ek announced today in a tweet. This is the first subscriber update Spotify has given out since it announced it had 20m subscribers days before Apple Music hit the market last June, and shows the increased competition has had little to no effect on Spotify’s growth.

In the nine months that Apple Music has been available, the service has picked up 11 million subscribers. Spotify has added 10m paid subscribers in the same time.

The Swedish streaming service is now adding an average of 10m paid customers a year — it only had 10m subscribers total in 2014— a growth rate it will need to maintain as it goes up against Apple Music and its substantial marketing war chest.

What’s also notable is the flood of exclusive content put out by Apple Music and Tidal over the past few months seemingly hasn’t harmed Spotify’s user retention.

«

It was going so well until that last sentence. Singleton has no idea what has happened to Spotify’s user retention; it might be seeing colossal churn (people joining while others leave) or be rock steady. The raw numbers don’t tell you. It’s a reasonable guess, but that’s all it is – a guess.

That might seem like nitpicking, but it matters: it’s key to knowing whether Spotify really does have loyal users, or just fly-by-nights. And it’s also a bad idea to state things as fact that you don’t know directly.
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Apple: the mother of all iPhone installed base models, via Stifel » Barrons.com

Tiernan Ray:

»After combining the installed base numbers, churn, new sales, upgrade rates, and such, Rakers arrives at a “guesstimate model” for how the Apple installed base may expand, and how that trickles down to potential iPhone sales.

That results in numbers that would be above his own estimates. For example, Rakers figures if Apple’s installed base total 625m units in 2015, if Apple maintains an 18.8% share of the global smartphone market this year, which is projected to be 3.958bn units, and it if gets 19.6% of the expansion of that total smartphone market, it would bring Apple’s installed base to 744m units.

Rakers then backs out of that an “implied gross change” of 144m units, backs out of that refurbished sales of 95 million, and comes up with 49 million “implied net new iPhone installed base shipments.” He then combines that with “new iPhone shipments into prior year installed base,” and comes up with a potential sales level of 239m iPhones this year.

That’s above Rakers’s own estimate for 217.4m units, and above what he deems Street consensus of 208m units. It would also be growth from last year, versus the decline everyone’s expecting this year.

«

The pricing for the new iPhone SE, lower than any new iPhone, could make a difference there.
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US top court agrees to hear Samsung-Apple patent fight » Reuters

Lawrence Hurley and Andrew Chung:

»The US Supreme Court on Monday stepped into the high-profile patent fight between the world’s two fiercest smartphone rivals, Apple and Samsung, agreeing to hear Samsung’s appeal of what it contends were excessive penalties for copying the patented designs of the iPhone.

Samsung Electronics paid Apple more than $548m in December related to a jury verdict from 2012. It is seeking to pare back the $399m of that amount that was awarded for infringing on the designs of the iPhone’s rounded-corner front face, bezel and colorful grid of icons, saying they contributed only marginally to a complex device.

Apple sued in 2011, claiming the South Korean electronics company stole its technology and ripped off the look of the iPhone.

«

The Jarndyce and Jarndyce of the digital world. But it also matters (notes Neil Cybart) because it affects how one values design. Google and Facebook wanted the Supreme Court to hear it; Apple didn’t, he says.
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Trump supporters aren’t stupid » Medium

Emma Lindsay with a terrific insight:

»Normally, when liberals talk about racism, they use “racist” as an end point. “Trump is racist” is, by itself, a reason not to vote for him, and “being racist” is an indicator of a person who is morally deficient.

But, if you don’t take this as an end point — if you instead ask “what do people get out of being racist?” — you’ll start to unravel the emotional motivations behind it. One of the best unpacking of this I have read is Matt Bruenig’s piece Last Place Avoidance and Poor White Racism. To summarize, no one wants to occupy the “last” place in society. No one wants to be the most despised. As long as racism remains intact, poor white people are guaranteed not to be “the worst.” If racism is ever truly dismantled, then poor white people will occupy the lowest rung of society, and the shame of occupying this position is very painful. This shame is so painful, that the people at risk of feeling it will vote on it above all other issues.

«

And as she also points out, “America is terrible at giving its citizens dignity and meaning.” This should be required reading in many places.
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Parachuting for charity: is it worth the money? » PubMed

»All parachute injuries from two local parachute centres over a 5-year period were analysed. Of 174 patients with injuries of varying severity, 94% were first-time charity-parachutists. The injury rate in charity-parachutists was 11% at an average cost of 3751 Pounds per casualty. 63% of casualties who were charity-parachutists required hospital admission, representing a serious injury rate of 7%, at an average cost of £5,781 per patient. The amount raised per person for charity was £30. Each pound raised for charity cost the NHS £13.75 in return.

«

Caveat: it’s from 1999. Even so, you can’t be too careful. (You can read the paper in full for $31.50. Perhaps raise the money through a sponsored parachu..? OK then.)
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Why we should fear a cashless world » The Guardian

Dominic Frisby:

»We already live in a world that is, as far as the distribution of wealth is concerned, about as unequal as it gets. It may even be as unequal as it’s ever been. My worry is that a cashless society may exacerbate inequality even further.

It will hand yet more power to the financial sector in that banks and related fintech companies will oversee all transactions. The crash of 2008 showed that, when push comes to shove, banks have already been exempted from the very effective regulation that is bankruptcy – one by which the rest of us must all operate. Do we want this sector to have yet more power and influence?

In a world without cash, every payment you make will be traceable. Do you want governments (which are not always benevolent), banks or payment processors to have potential access to that information? The power this would hand them is enormous and the potential scope for Orwellian levels of surveillance is terrifying.

Cash, on the other hand, empowers its users. It enables them to buy and sell, and store their wealth, without being dependent on anyone else. They can stay outside the financial system, if so desired.

«

The two opposing viewpoints are: in a world where corporations try to avoid tax and there might be a dwindling workforce, it’s important to have visibility of every transaction so that the taxable ones are visible. Alternatively, as Frisby argues, the ability to spend shouldn’t depend on access to technology which can be denied, or surveilled at will.
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Clinton email reveals: Google sought overthrow of Syria’s Assad » Washington Examiner

Rudy Takala:

»Google in 2012 sought to help insurgents overthrow Syrian President Bashar Assad, according to State Department emails receiving fresh scrutiny this week.

Messages between former secretary of state Hillary Clinton’s team and one of the company’s executives detailed the plan for Google to get involved in the region.

“Please keep close hold, but my team is planning to launch a tool … that will publicly track and map the defections in Syria and which parts of the government they are coming from,” Jared Cohen, the head of what was then the company’s “Google Ideas” division, wrote in a July 2012 email to several top Clinton officials.

“Our logic behind this is that while many people are tracking the atrocities, nobody is visually representing and mapping the defections, which we believe are important in encouraging more to defect and giving confidence to the opposition,” Cohen said, adding that the plan was for Google to surreptitiously give the tool to Middle Eastern media.

«

The headline is overwritten: Google wasn’t seeking Assad’s overthrow. It was seeking to provide help to those inside Syria who wondered how many were really defecting. As the story points out, though, the anti-Assad movement helped create the conditions for ISIS to become strong.

And it’s really not good for Google to be visible as having tried to influence the internal affairs of a Middle Eastern state – even in this roundabout way. Now one begins to wonder where else it might have tried to be “helpful”.
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Powa: The start-up that fell to earth » BBC News

Rory Cellan-Jones spoke to multiple people who had worked for Powa, a British company run by Dan Wagner which once claimed a $2.7bn valuation but collapsed into administration in February:

»What those people have told me is that Powa was an almost textbook case of how not to run a company – no clear strategy, directionless management, overblown claims about the technology and a reckless attitude to money.

For the last couple of years, I’ve been receiving emails from Powa’s PR agency urging me to cover the company’s ground breaking technology the PowaTag which “allows users to purchase anytime, anywhere in just three seconds by simply scanning an item or advertisement with their smartphone”.

Eventually, the company claimed that it had 1,200 businesses signed up to use the PowaTag.

I was not particularly impressed. I saw little evidence that the technology was being used, but one investor did bite. A Boston-based firm Wellington Management invested a sizeable sum in Mr Wagner’s venture. Eventually they along with other investors poured more than $200m into Powa.

It seems likely they were told the same story that was peddled to journalists – that the PowaTag was going to be used by some of the world’s leading brands including L’Oreal and Carrefour.

But what’s emerged since the collapse of the business is that none of those companies had signed contracts, merely “letters of intent”, which did not commit them to anything. One senior figure in the company told me that young inexperienced sales staff were rewarded with a £2,000 bonus every time one of these letters was signed “so they weren’t particularly concerned about the quality of the deal”.

«

Textbook piece of investigative journalism where you talk to people and gather facts and talk to more people. (The headline is also clever – read all the way to the article’s end to find out why.) I bet there’s plenty more that Cellan-Jones couldn’t include because the BBC’s lawyers wouldn’t let it past. (Notably, FT Alphaville puts Powa’s real value at $106m, based on court documents filed in the US.) None of it looks good for Dan Wagner. Speaking of whom..
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Talk:Dan Wagner » Wikipedia

From the Talk (discussion about editing/content) page relating to Wagner:

»Wikipedia definition of Vandalism = Vandalism is any addition, removal, or change of content, in a deliberate attempt to compromise the integrity of Wikipedia. [[2]]

The amends I made that Techtrek has reverted as being “vandalism” were externally sourced, and links provided. I ask Techtrek to explain on what basis they consider them to be vandalism? It has been requested that any changes are raised and can be discussed on here so that we can get consensus.

It is my belief that by reverting any negative and independantly verified and sourced updates Techtrek is responsible for vandalism as they are deliberately attempting to compromise Wikipedias integrity. They have made a number of unsourced claims to the re-write and repeatedly used language that is not in keeping with Wikipedias guidelines [3]. It has been claimed on User talk:Techtrektalk page the they are Flame PR [[4]] if so then this must be disclosed. I ask Techtrek to please respond otherwise I will revert the change. Ol king col (talk) 09:26, 21 June 2014 (UTC)

«

That’s a busy PR company if it’s burnishing a client’s personal Wikipedia page. Wonder how much of the VC money went to Flame PR? Though the fact that the Wikipedia user only edits Wagner’s page is… notable.
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An iCloud scam that may be worse than ransomware » Malwarebytes Labs

Thomas Reed was contacted by a woman who said her iMac was hit by “ransomware”:

»From the screenshots she sent me, it soon became clear what had happened. The hacker had somehow gotten access to Ericka’s iCloud account.

Using this, he was able to remotely lock her computer using iCloud’s Find My Mac feature, with a ransom message displayed on the screen. (For some reason, the iPhone did not actually end up locked, but displayed the same message.)

The message read: “Contact me: hblackhat(at)mail.ru All your conversation sms+mail, bank, computer files, contacts, photos. I will public + send to your contacts.”

She also received an e-mail message, in similarly broken English, from her own iCloud address. The message said he had access to all her bank accounts, personal information, etc, and would publish it if she didn’t respond within 24 hours.

This is a pretty serious threat, and quite different from the typical Windows malware. Unfortunately, the story doesn’t end there. Apple designed Find My Mac/iPhone as an anti-theft feature. It is intended to allow you to take a number of actions on a lost or stolen device, including displaying a message, locking it, locating it physically and even remotely erasing it.

«

As Reed points out, the same happened previously in Australia in 2014. Perils of the connected world: do you want to be able to find your machine if it’s stolen? But then, how secure is your cloud account?
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What Americans don’t understand about Nordic countries » Business Insider

Anu Partanen moved to the US seven years ago:

»Americans are not wrong to abhor the specters of socialism and big government. In fact, as a proud Finn, I often like to remind my American friends that my countrymen in Finland fought two brutal wars against the Soviet Union to preserve Finland’s freedom and independence against socialism. No one wants to live in a society that doesn’t support individual liberty, entrepreneurship, and open markets.

But the truth is that free-market capitalism and universal social policies go well together—this isn’t about big government, it’s about smart government. I suspect that despite Hillary Clinton’s efforts to distance herself from Sanders, she probably knows this. After all, Clinton is also endorsing policies that sound an awful lot like what the Nordics have done: paid family leave, better public schools, and affordable day care, health care and college for all.

The United States is its own country, and no one expects it to become a Nordic utopia. But Nordic countries aren’t utopias either. What they’ve done has little to do with culture, size, or homogeneity, and everything to do with figuring out how to flourish and compete in the 21st century.

«

The article originally appeared at The Atlantic, but the comments at BusinessInsider show how incredibly difficult Americans find it to grasp the idea of everyone benefiting from everyone paying more general taxes. While they defend their terrible healthcare system. And overlook the products that the Nordics have produced, such as Ikea and Lego and Linux.
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Errata, corrigenda and ai no corrida: none notified.

Start up: sexism in funding, Powa struggles, China’s smartphone rat race, Apple software, and more

Good password on paper

A bit dated? Doesn’t matter, password crackers are after you. Photo by Simon Lieschke on Flickr.

It’s a secret, but you can sign up to receive each day’s Start Up post by email. Tell no one.

A selection of 9 links for you. Plaited in plaid. I’m charlesarthur on Twitter. Observations and links welcome.

VCs- don’t compare me to your wife, just don’t » Medium

Sarah Nadav:

Investors, you should know that the only thing that I have in common with your wife is a vagina. You need to know that because the women who are sitting in front of you to pitch are Entrepreneurs – and we are a totally different breed of human being than just about anyone else.

Your wife may or may not be an entrepreneur. But the extent to which she is founding a company is the extent to which I have something in common with her.

When you ask me about having it all, or how am I going to manage my kids, I seriously think that you are insane. Because in my head, I can’t imagine a scenario where you trust someone with millions of dollars to run a business but think that they don’t know how to deal with childcare.

Oh, but you have to read the message exchange with one venture capitalist about A Woman’s Place. According to him it definitely isn’t in the boardroom.
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China smartphone market sees its highest shipment ever of 117.3m in 2015Q4 » IDC

Shipments grew 8% year-on-year in the quarter:

“Xiaomi, Huawei and Apple are the top smartphone players in 2015. This is a stark contrast to the top players in 2013, which was Samsung, Lenovo and Coolpad – with Samsung clearly dominating other players. With operators reducing smartphone subsidy and given the volatility of consumers’ brand preference in the market, the smartphone scene has changed significantly since then,” says Tay Xiaohan, Senior Market Analyst with IDC Asia/Pacific’s Client Devices team.

“Xiaomi entered the market at a time when the China smartphone market was still growing, and was able to capture a significant market share with its disruptive sales model. Huawei, with its investments in R&D, strong products, branding and channel connections, saw it having significant growth in 2015. Apple, on the other hand, continues to be a strong and desirable brand in the eyes of the Chinese consumers. With the Chinese market now slowing down, it is unlikely that we will see any new players making a big impact on the smartphone market compared to the way Xiaomi did in the previous years,” adds Ms. Tay.

So the door is shut to new entrants. Remember that scene in Skyfall where Javier Bardem is describing rat removal to James Bond? (Here’s the link if you’d forgotten.) The smartphone business in China now turns into that scenario.
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The superhero of artificial intelligence: can this genius keep it in check? » The Guardian

Clemency Burton-Hill on DeepMind’s Demis Hassabis. The interview with him is OK – though mostly dead-bat responses from him – but I thought this was more indicative of the challenge, and potential for the company:

Upstairs, wrapping the original building, is a modern open-plan structure featuring a deck with undeniably magnificent views of London’s rooftops.

It’s up here, on Friday nights, that the DeepMinders gather for drinks. One employee describes the ritual to me enthusiastically as a way “to end the week on a high”. Socialising is an intrinsic way of life: I’m told of the DeepMind running club, football team, board games club. (“That one gets pretty competitive.”) A wall chart with moveable photographs indicates where everyone is hot-desking on any given day. It’s aggressively open-plan. The engineers – mostly male – that I pass in the corridors shatter the stereotype of people working in the nerdier corners of human endeavour: these guys look fit, happy, cool. A certain air of intellectual glamour, it has to be said, vibrates in the atmosphere. And no wonder. The smartest people on the planet are queuing up to work here, and the retention rate is, so far, a remarkable 100%, despite the accelerating focus on AI among many of Google’s biggest competitors, not to mention leading universities all over the globe.

“We’re really lucky,” says Hassabis, who compares his company to the Apollo programme and Manhattan Project for both the breathtaking scale of its ambition and the quality of the minds he is assembling at an ever increasing rate. “We are able to literally get the best scientists from each country each year. So we’ll have, say, the person that won the Physics Olympiad in Poland, the person who got the top maths PhD of the year in France. We’ve got more ideas than we’ve got researchers, but at the same time, there are more great people coming to our door than we can take on. So we’re in a very fortunate position. The only limitation is how many people we can absorb without damaging the culture.”

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Powa Technologies missed staff and contractor payments » FT.com

Kadhim Shubber and Murad Ahmed:

Powa has raised about $175m, mainly from Boston-based investment fund Wellington Management, which the company says values it at $2.7bn.

Its headquarters are spread over two floors in what Mr Wagner called in one of the videos “the opulent surroundings” of Heron Tower, a skyscraper in the heart of City of London. A person with knowledge of the matter said that Powa could be paying as much as £2.5m a year.

When Powa was founded in 2007, it planned to develop a mobile payments system. More recently it has focused on its PowaTag product, a mobile platform that allows people to buy and order a product by photographing an image of it with their mobile phones.

Mr Wagner has predicted that the business will be bigger than Google or Alibaba, the Chinese ecommerce group. “What we’re building here is the biggest tech company in living memory,” he told the Financial Times in April last year.

But in the video to staff, Mr Wagner said that the company was “basically pre-revenue”, a term that refers to a lack of sales. “As we go forward from here that revenue will start to flow in meaningful ways but right now it isn’t,” he said.

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Dan Lyons’ HubSpot book ‘Disrupted’: a few predictions » BostInno

Kyle Alspach on the forthcoming book from “Fake Steve Jobs”, aka Lyons, who worked for a while at Hubspot:

• The book is going to accuse HubSpot’s management of being hypocritical—touting how the company is making a positive difference in the world when in reality, according to Lyons at least, they’re not much better than spammers. We already knew this from the shorter description that was posted previously, but the superlatives from other authors suggest just how central the theme will be to the book:

– “Dan Lyons goes deep inside a company that uses terms like ‘world class marketing thought leaders’ to show us how ridiculous, wasteful, and infantile tech start-ups like this can be.”―Nick Bilton (author of “Hatching Twitter”)

– Disrupted “just might tell us something important about the hypocrisy and cult-like fervor inside today’s technology giants.”―Brad Stone (author of “The Everything Store”)

– “Disrupted explores the ways in which many technology companies have come to fool the public and themselves.”—Ashlee Vance (author of “Elon Musk”)

• Some HubSpot executives will definitely be singled out. Such as: “Dan’s absentee boss sent cryptic emails about employees who had ‘graduated’ (read: been fired).”

Waiter! Popcorn!
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Password cracking attacks on Bitcoin wallets net $103,000 » Ars Technica

Dan Goodin:

Hackers have siphoned about $103,000 out of Bitcoin accounts that were protected with an alternative security measure, according to research that tracked six years’ worth of transactions. Account-holders used easy-to-remember passwords to protect their accounts instead of the long cryptographic keys normally required.

The heists were carried out against almost 900 accounts where the owners used passwords to generate the private encryption keys required to withdraw funds. In many cases, the vulnerable accounts were drained within minutes or seconds of going live. The electronic wallets were popularly known as “brain wallets” because, the thinking went, Bitcoin funds were stored in users’ minds through memorization of a password rather than a 64-character private key that had to be written on paper or stored digitally. For years, brain wallets were promoted as a safer and more user-friendly way to secure Bitcoins and other digital currencies, although Gregory Maxwell, Gavin Andresen, and many other Bitcoin experts had long warned that they were a bad idea.

Here’s a paper about what happened; to crack the wallets, tables with as many as billions of potential passwords may have been deployed against them. Yes, billions.
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New finding may explain heat loss in fusion reactors » MIT News

The expectation by physicists for more than a decade had been that turbulence associated with ions (atoms with an electric charge) was so much larger than turbulence caused by electrons — nearly two orders of magnitude smaller — that the latter would be completely smeared out by the much larger eddies. And even if the smaller eddies survived the larger-scale disruptions, the conventional thinking went, these electron-scale whirls would be so much smaller that their effects would be negligible.

The new findings show that this conventional wisdom was wrong on both counts. The two scales of turbulence do indeed coexist, the researchers found, and they interact with each other so strongly that it’s impossible to understand their effects without including both kinds in any simulations.

However, it requires prodigious amounts of computer time to run simulations that encompass such widely disparate scales, explains Howard, who is the lead author on the paper detailing these simulations.

Accomplishing each simulation required 15 million hours of computation, carried out by 17,000 processors over a period of 37 days at the National Energy Research Scientific Computing Center — making this team the biggest user of that facility for the year. Using an ordinary MacBook Pro to run the full set of six simulations that the team carried out, Howard estimates, would have taken 3,000 years.

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Apple’s elephant in the room » Medium

Alexandra Mintsopoulos on the meme about Apple’s “declining” software quality:

If the biggest example that can be pointed to is iTunes or its back-end (which seem to generate the most criticism) then there isn’t any validity to the idea that Apple’s software quality is declining. iTunes has been the target of complaints for as long as anyone can remember and it seems clear that it will be reworked much like Photos, iWork, or Final Cut have been (and likely receive the same backlash for missing functionality). The reason it hasn’t been done sooner is obvious: it has hundreds of millions of users and transacts billions of dollars in sales, revamping it from the ground up is akin to fixing an airplane while it’s in flight and won’t be done lightly.

There is a massive disconnect between enthusiasts and Apple’s broader customer base on the perception of Apple’s software quality. That is a PR problem for Apple to solve, not a software one.

I thought it was pretty clear in Eddy Cue’s appearance on John Gruber’s podcast (linked here yesterday) that Cue said iTunes is being redesigned, but you don’t do that sort of thing in an afternoon. The vast majority of iTunes-on-desktop users are not using Apple Music. The problem that then needs to be solved is to what extent iTunes could, or should, be broken into multiple apps.
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My Telltale heart: From Monkey Island to the Walking Dead – games matter » The Malcontent

Mic Wright, arguing (on yesterday’s point) that yes, video games are a cultural product:

Most of the brain trust from LucasArts ended up in a berth at TellTale games, where the rabbit and pooch P.I team of Sam & Max and Guybrush Threepwood, the protagonist of the Monkey Island games, also ended up.

Preempting a question I have just imagined Charles – who commissioned my first ever piece for The Guardian – asking, Telltale/LucasArts has also delivered more serious and dramatic gaming experiences. The Game of Thrones and Walking Dead games developed by the studio drop the player into storylines where moral and tactical decisions are at the heart of the gameplay.

In the branching narratives, you’re forced to decide which friends or allies to sacrifice among other pretty gut-wrenching choices. Both sets of titles fundamentally dive into the nature of what it is to be a human in society and, through your choices, end up making you think about your real life character and behaviour.

Of course lots of games are just games, but then what does the average Adam Sandler movie or Dan Brown novel tell us about the human experience?

Touché on that last one. I remain sceptical; I’m not saying that video games cannot be cultural, emotional experiences. However, I don’t think they’ve generally achieved that yet. The question is whether they will continue to remain at the Sandler/Brown end of the spectrum, where I think they are.

After all, very few “games” (chess, squash, football) achieve “cultural event” status. The only ones I can think off immediately are the 1972 Fischer-Spassky chess match (west v east, a cold war fought with chess pieces) and 1997’s chess match of Kasparov v Deep Blue (humans v machines – disappointing outcome). Wimbledon finals, World Cup finals, some Olympic events do manage a “where were you when..?” status, but that’s not quite the same as having cultural impact – i.e. showing us something about where we really are. Any other suggestions?
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Errata, corrigenda and ai no corrida: none notified.