Daily Crunch: Apple Arcade expands with classic games

Apple adds classic titles to Apple Arcade, Microsoft experiences an outage and Coinbase is going public. This is your Daily Crunch for April 2, 2021.

The big story: Apple Arcade expands with classic games

Until now, Apple’s game subscription service was limited to exclusive new titles, but today it’s introducing two new categories: App Store Greats (popular iPhone games like Monument Valley+, Fruit Ninja Classic+, Cut the Rope Remastered and Badland+) and Timeless Classics (board games and puzzle games, such as Backgammon+ and Chess Play and Learn+).

This is a major expansion to the Apple Arcade back catalog, but it’s not simply a matter of putting previously free games behind a paywall. The Arcade versions of these titles will be ad-free and without in-app purchases — you’re never paying anything beyond the $4.99 monthly subscription fee. Also, some of these games had become unavailable in their original forms due to iOS and hardware updates.

The tech giants

Microsoft outage knocks sites and services offline — Microsoft stumbled back online Thursday after an hours-long outage in the middle of the U.S. west coast working afternoon.

Startups, funding and venture capital

Coinbase to direct list on April 14th, provide financial update on April 6th — The company will trade under the ticker symbol “COIN.”

Uruguayan payments startup dLocal quadruples valuation to $5B with $150M raise — This means that the five-year-old Uruguayan company has effectively quadrupled its valuation in a matter of months.

Backflip offers an easier way to turn used electronics into cold, hard cash — The company offers customers cash on delivery for their used electronics, which could be anything from iPhones to Game Boys.

Advice and analysis from Extra Crunch

How is edtech spending its extra capital? — Edtech M&A activity has continued to swell.

Tech in Mexico: A confluence of Latin America, the US and Asia — LatAm entrepreneurs seem to be looking to Asian tech giants for product inspiration and growth strategies.

RPA market surges as investors, vendors capitalize on pandemic-driven tech shift — Robotic process automation came to the fore during the pandemic as companies took steps to digitally transform.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

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Apple expands Apple Arcade with classic App Store games

Apple has announced an expansion for its subscription gaming service Apple Arcade. In addition to exclusive game releases, the company is adding two new categories — Timeless Classics and App Store Greats.

In the ‘App Store Greats’ category, you can find some well-known iPhone games that have been released over the past decade, such as Threes+, Mini Metro+, Monument Valley+, Fruit Ninja Classic+, Cut the Rope Remastered and Badland+.

This is an interesting move as Apple has focused on exclusive titles so far. Arguably, some Apple Arcade games are sequels of popular App Store games — I’d put Mini Motorways and Rayman Mini in this category for instance.

But Apple is changing its stance and essentially buying a back catalog of App Store games. Some of them are still available on the App Store, while others have become incompatible with modern iOS versions due to framework and hardware updates. 64-bit processors have rendered many games incompatible for instance.

As always, Apple isn’t just putting free games behind a paywall. These are brand new downloads on the App Store. You get the full game without any ad or in-app purchase.

In addition to old school App Store games, Apple is also adding ‘Timeless Classics’ games. It’s a selection of board games and classic puzzle games that are included in your subscription. Games include Backgammon+, Chess Play & Learn+, Good Sudoku+, Tiny Crossword+, etc.

Those games should definitely help when it comes to reducing churn. Some people just like playing chess over and over again. They might start subscribing to play some chess and pay an Apple Arcade subscription just to keep using the same app.

Overall, Apple is dropping 32 games today and Apple Arcade has more than 180 games in its catalog. Apple originally launched the service in September 2019. You can download Apple Arcade games for $4.99 per month and there’s no additional in-app purchases. Games are available on the iPhone, the iPad, the Apple TV and macOS. Up to six family members can play with a single Apple Arcade subscription and you can also access Apple Arcade with an Apple One subscription.

Apple has been betting heavily on subscription services, such as Apple Music, Apple TV+, Apple Fitness+ and Apple News+. While some of those services have been very successful, such as Apple Music, the company is still adding more and more content to other services to prove that you should subscribe over the long haul. And today’s Apple Arcade update should definitely help for its game subscription service.

Image Credits: Apple

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US iPhone users spent an average of $138 on apps in 2020, will grow to $180 in 2021

U.S. consumers spent an average of $138 on iPhone apps last year, an increase of 38% year over year, largely driven by the pandemic impacts, according to new data from app store intelligence firm Sensor Tower. Throughout 2020, consumers turned to iPhone apps for work, school, entertainment, shopping and more, driving per-user spending to a new record and the greatest annual growth since 2016, when it had then popped by 42% year over year.

Sensor Tower tells TechCrunch it expects the trend of increased consumer spend to continue in 2021, when it projects consumer spend per active iPhone in the U.S. to reach an average of $180. This will again be tied, at least in part, to the lift caused by the pandemic — and, particularly, the lift in pandemic-fueled spending on mobile games.

Image Credits: Sensor Tower

Last year’s increased spending on iPhone apps in the U.S. mirrored global trends, which saw consumers spend a record $111 billion on both iOS and Android apps, per Sensor Tower, and $143 billion, per App Annie, whose analysis had also included some third-party Android app stores in China.

In terms of where U.S. iPhone consumer spending was focused in 2020, the largest category was, of course, gaming.

In the U.S., per-device spending on mobile games grew 43% year over year from $53.80 in 2019 to $76.80 in 2020. That’s more than 20 points higher than the 22% growth seen between 2018 and 2019, when in-game spending grew from $44 to $53.80.

U.S. users spent the most money on puzzle games, like Candy Crush Saga and Gardenscapes, which may have helped to take people’s minds off the pandemic and its related stresses. That category averaged $15.50 per active iPhone, followed by casino games, which averaged $13.10, and was driven by physical casinos closures. Strategy games also saw a surge in spending in 2020, growing to an average of $12.30 per iPhone user spending.

Image Credits: Sensor Tower

Another big category for in-app spending was Entertainment. With theaters and concerts shut down, consumers turned to streaming apps in larger numbers. Disney+ launched in late 2019, just months ahead of the pandemic lockdowns and HBO Max soon followed in May 2020.

Average per-device spending in this category was second-highest, at $10.20, up 26% from the $8.10 spent in 2019. For comparison, per-device spending had only grown by 1% between 2018 and 2019.

Other categories in the top five by per-device spending included Photo & Video (up 56% to $9.80), Social Networking (up 41% to $7.90) and Lifestyle (up 14% to $6.50).

These increases were tied to apps like TikTok, YouTube, and Twitch. Twitch saw 680% year-over-year revenue growth in 2020 on U.S. iPhones, specifically. TikTok, meanwhile, saw 140% growth. In the Lifestyle category, dating apps were driving growth as consumers looked to connect with others virtually during lockdowns, while bars and clubs were closed.

Overall, what made 2020 unique was not necessarily what apps people where using, but how often they were being used and how much was being spent.

App Annie had earlier pointed out that the pandemic accelerated mobile adoption by two to three years’ time. And Sensor Tower today tells us that the industry didn’t see the same sort of “seasonality” around spending in certain types of apps, and particularly games, last year — even though, pre-pandemic, there are typically slower parts of the year for spending. That was not the case in 2020, when any time was a good time to spend on apps.

NFTs could bridge video games and the fashion industry

 

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Collaborative iOS app Craft Docs secures $8M, led by Creandum and a ‘Skyscanner Mafia’

Launched in only November last year, the Craft Docs app — which was built from the ground up as an iOS app for collaborative documents — has secured an $8 million Series A round led by Creandum. Also participating was InReach Ventures, Gareth Williams, former CEO and co-founder of Skyscanner, and a number of other tech entrepreneurs, many of whom are ex-Skyscanner.

Currently available on iOS, iPadOS and MacOS, Craft now plans to launch APIs, extended integrations, and a browser-based editor in 2021. It has aspirations to become a similar product to Notion, and the founder and CEO Balint Grosz told me over a Zoom call that “Notion is very much focused around writing and wikis and all that sort of stuff. We have a lot of users coming from Notion, but we believe we have a better solution for people, mainly for written content. Notion is very strong with its databases and structural content. People just happen to use it for other stuff. So we are viewed as a very strong competitor by our users, because of the similarities in the product. I don’t believe our markets overlap much, but right now from the outside people do switch from Notion to us, and they do perceive us as being competitors.”

He told me this was less down to the app experience than “the hierarchical content. We have this structure where you can create notes within notes, so with every chunk of text you add content and navigate style, and add inside of that – and notion has that as well. And that is a feature which not many products have, so that is the primary reason why people tend to compare us.”

Craft says it’s main advantages over Notion are UX; Data storage and privacy (Craft is offline first, with real-time sync and collaboration; you can use 3rd party cloud services (i.e. iCloud); and integrations with other tools.

Orosz was previously responsible for Skyscanner’s mobile strategy after the company acquired his previous company, Distinction.

Fredrik Cassel, General Partner at Creandum, said in a statement: “Since our first discussions we’ve been impressed by both the amount of love users have for Craft, as well as the team’s unique ability to create a product that is beautiful and powerful at the same time. The upcoming features around connectivity and data accessibility truly set Craft apart from the competition.”

Craft ipad app

Roberto Bonazinga, Co-founder at InReach Ventures, added: “We invested in Craft on day zero because we were fascinated by the clarity and the boldness of Balint’s vision – to reinvent how millions of people can structure their thoughts and write them down in the most effective and beautiful way.”

The launch and funding of the Craft startup suggests there is something of a “Skyscanner Mafia” emerging, after its acquisition by Trip.com Group (formerly Ctrip), the largest travel firm in China, $1.75 billion in 2016.

Other backers of the company include Carlos Gonzalez (former CPO at Skyscanner, CTPO at GoCardless), Filip Filipov (former VP Strategy at Skyscanner), Ross McNairn (former CEO at Dorsai, CPO at TravelPerk), Stefan Lesser (former Technology and Partnership Manager at Apple) and Akos Kapui (Former Head of Technology at Skyscanner, VP of Engineering at Shapr3D).

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Bilibili ups the ante in games with $123 million investment in TapTap

Competition in China’s gaming industry is getting stiffer in recent times as tech giants sniff out potential buyouts and investments to beef up their gaming alliance, whether it pertains to content or distribution.

Bilibili, the go-to video streaming platform for young Chinese, is the latest to make a major gaming deal. It has agreed to invest HK$960 million (about $123 million) into X.D. Network, which runs the popular game distribution platform TapTap in China, the company announced on Thursday.

Dual-listed in Hong Kong and New York, Bilibili will purchase 22,660,000 shares of X.D.’s common stock at HK$42.38 apiece, which will grant it a 4.72% stake.

The partners will initiate a series of “deep collaborations” around X.D.’s own games and TapTap, without offering more detail.

Though known for its trove of video content produced by amateur and professional creators, Bilibili derives a big chunk of its income from mobile games, which accounted for 40% of its revenues in 2020. The ratio had declined from 71% and 53% in 2018 and 2019, a sign that it’s trying to diversify revenue streams beyond distributing games.

With 170M users, Bilibili is the nearest thing China has to YouTube

Tencent has similarly leaned on games to drive revenues for years. The WeChat operator dominates China’s gaming market through original titles and a sprawling investment portfolio whose content it helps operate and promote.

X.D. makes games, too, but in recent years it has also emerged as a rebel against traditional game distributors, which are Android app stores operated by smartphone makers. The vision is to skip the high commission fees charged by the likes of Huawei and Xiaomi and monetize through ads. X.D.’s proposition has helped it attract a swathe of gaming companies to be its investors, including fast-growing studios Lilith Games and miHoYo, as well as ByteDance, which built up a 3,000-people strong gaming team within six years.

Bilibili’s investment further strengthens X.D.’s matrix of top-tier gaming investors. Tencent is conspicuously absent, but it’s no secret that ByteDance is its new nemesis. The TikTok parent recently outbid Tencent to acquire Moonton, a gaming studio that has gained ground in Southeast Asia, according to Reuters. Douyin, the Chinese version of TikTok, is also vying for user attention away from content published on WeChat.

How ByteDance plans to crack the gaming industry

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Consumers spent $32B on apps in Q1 2021, the biggest quarter on record

The pandemic’s remarkable impact on the app industry has not slowed down in 2021. In fact, consumer spending in apps has hit a new record in the first quarter of this year, a new report from App Annie indicates. The firm says consumers in Q1 2021 spent $32 billion on apps across both iOS and Google Play, up 40% year-over-year from Q1 2020. It’s the largest-ever quarter on record, App Annie also notes.

Last year saw both app downloads and consumer spend increase, as people rapidly adopted apps under coronavirus lockdowns — including apps for work, school, shopping, fitness, entertainment, gaming and more. App Annie previously reported a record 218 billion in global downloads and record consumer spend of $143 billion for the year.

Image Credits: App Annie

These trends have continued into 2021, it seems, with mobile consumers spending roughly $9 billion more in Q1 2021 compared with Q1 2020. Although iOS saw larger consumer spend than Android in the quarter — $21 billion vs. $11 billion, respectively — both stores grew by the same percentage, 40%.

But the types of apps driving spending were slightly different from store to store.

On Google Play, Games, Social and Entertainment apps saw the strongest quarter-over-quarter growth in terms of consumer spending, while Games, Photo & Video, and Entertainment apps accounted for the strongest growth on iOS.

By downloads, the categories were different between the stores, as well.

On Google Play, Social, Tools, and Fiance saw the biggest download growth in Q1, while Games, Finance and Social Networking drove download growth for iOS. Also on Google Play, other top categories included Weather (40%) and Dating (35%), while iOS saw Health and Fitness app downloads grow by a notable 25% — likely a perfect storm as New Year’s Resolutions combined with continued stay-at-measures that encouraged users to find new ways to stay fit without going to a gym.

Image Credits: App Annie

The top apps in the quarter remained fairly consistent, however. TikTok beat Facebook, in terms of downloads, and was followed by Instagram, Telegram, WhatsApp and Zoom. But the short-form video app only made it to No. 2 in terms of consumer spend, with YouTube snagging the top spot. Tinder, Disney+, Tencent Video, and others followed. (Netflix has dropped off this chart as it now directs new users to sign up directly, rather than through in-app purchases).

Image Credits: App Annie

Though Facebook’s apps have fallen behind TikTok by downloads, its apps — including Facebook, WhatsApp, Messenger and Instagram — still led the market in terms monthly active users (MAUs) in the quarter. TikTok, meanwhile, ranked No. 8 by this metric.

Up-and-comers in the quarter included privacy-focused messaging app Signal, which saw the strongest growth in the quarter by both downloads and MAUs — a calculation that App Annie calls “breakout apps.”  Telegram closely followed, as users bailed from mainstream social after the Capitol riot. Another “breakout” app was MX TakaTak, which is filling the hole in the market for short-form video that resulted from India’s ban  of TikTok.

Image Credits: App Annie

Gaming, meanwhile, drove a majority of the quarter’s spending, as usual, accounting for $22 billion of the spend — $13 billion on iOS (up 30% year-over-year) and $9 billion on Android (up 35%). Gamers downloaded about a billion titles per week, up 15% year-over-year from 2020.

Among Us! dropped to No. 2 in the quarter by downloads, replaced by Join Clash 3D, while DOP 2: Delete One Part jumped 308 places to reach No. 3.

Image Credits: App Annie

Roblox led by consumer spend, followed by Genshin Impact, Coin Master, Pokemon Go and others. And although Among Us! dropped on the charts by downloads, it remained No. 1 by monthly active users in the quarter, followed by PUBG Mobile, Candy Crush Saga, Roblox and others.

App Annie notes that the pandemic also accelerated the mobile gaming market, with game downloads outpacing overall downloads by 2.5x in 2020. It predicts that mobile gaming will reach  $120 billion in consumer spending this year, or 1.5x all other gaming formats combined.

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Apple adds two brand new Siri voices and will no longer default to a female or male voice in iOS

Apple is adding two new voices to Siri’s English offerings, and eliminating the default ‘female voice’ selection in the latest beta version of iOS. This means that every person setting up Siri will choose a voice for themselves and it will no longer default to the voice assistant being female, a topic that has come up quite a bit with regards to bias in voice interfaces over the past few years.

The beta version should be live now and available to program participants.

I believe that this is the first of these assistants to make the choice completely agnostic with no default selection made. This is a positive step forward as it allows people to choose the voice that they prefer without the defaults bias coming into play. The two new voices also bring some much needed variety to the voices of Siri, offering more diversity in speech sound and pattern to a user picking a voice that speaks to them.

In some countries and languages Siri already defaults to a male voice. But this change makes the choice the users’ for the first time.

“We’re excited to introduce two new Siri voices for English speakers and the option for Siri users to select the voice they want when they set up their device,” a statement from Apple reads. “This is a continuation of Apple’s long-standing commitment to diversity and inclusion, and products and services that are designed to better reflect the diversity of the world we live in.”

The two new voices use source talent recordings that are then run through Apple’s Neural text to speech engine, making the voices flow more organically through phrases that are actually being generated on the fly.

I’ve heard the new voices and they sound pretty fantastic, with natural inflection and smooth transitions. They’ll be a welcome addition of choice to iOS users. I’ll embed some samples here after the beta drops.

This latest beta also upgrades the Siri voices in Ireland, Russia and Italy to Neural TTS, bringing the total voices using the new tech to 38. Siri now handles 25 billion requests per month on over 500M devices and supports 21 languages in 36 countries.

The new voices are available to English speaking users around the world and Siri users can select a personal preference of voice in 16 languages.

It seems very likely that these two new voices are just the first expansion in Siri’s voice selections. More diversity in voice, tone and regional dialect can only be a positive development for how inclusive smart devices feel. Over the past few years we have finally begun to see some movement from Amazon, Google and Apple to aggressively correct situations where the assistants have revealed bias in their responses to queries that use negative or abusive language. Improvements there, as well as in queries on social justice topics and overall accessibility improvements are incredibly key as we continue to see an explosion of voice-first or voice-native interfaces. These kinds of choices matter, especially at a scale of hundreds of millions of people.

 

Article updated to note that in some countries and languages Siri currently defaults to a male voice. 

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