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Foxconn pulls back on its $10 billion factory commitment – TechCrunch

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Well that didn’t last long.

In 2017, Foxconn announced the largest investment of a foreign company in the United States when it selected Mount Pleasant, Wisconsin for a new manufacturing facility. Buttressed by huge economic development grants from Wisconsin, an endorsement from President Trump, and Foxconn CEO Terry Gou’s vision of a maker America, the plant was designed to turn a small town and its environs into the futuristic “Wisconn Valley.”

Now, those dreams are coming apart faster than you can say “Made in America.”

In an interview with Reuters, a special assistant to Gou says that those plans are being remarkably scaled back. Originally designed to be an advanced LCD factory, the new Foxconn facility will instead be a much more modest (but still needed!) research center for engineers.

It’s a huge loss for Wisconsin, but the greater shock may be just how obvious all of this was. I wrote about the boondoggle just a few weeks ago, as had Bruce Murphy at The Verge a few weeks before that. Sruthi Pinnamaneni produced an excellent podcast on Reply All about how much the economic development of Mount Pleasant tore the small town asunder.

The story in short: the economics of the factory never made sense, and economics was always going to win over the hopes and dreams of politicians like Wisconsin governor Scott Walker, who championed the deal. Despite bells and whistles, televisions are a commodity product (unlike, say, airfoils), and thus the cost structure is much more compatible with efficient Asian supply chains than with American expensive labor.

Yet, that wasn’t the only part of the project that never made any sense. Foxconn was building in what was essentially the middle of nowhere, without the sort of dense ecosystem of suppliers and sub-suppliers required for making a major factory hum. (Plus, as a native of Minnesota, I can also attest that Wisconsin is a pile of garbage).

Those suppliers are everything for manufacturers. Just this past weekend, Jack Nicas at the New York Times observed that Apple’s advanced manufacturing facility in Austin, Texas struggled to find the right parts it needed to assemble its top-of-the-line computer, the Mac Pro:

But when Apple began making the $3,000 computer in Austin, Tex., it struggled to find enough screws, according to three people who worked on the project and spoke on the condition of anonymity because of confidentiality agreements.

In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas, where they say everything is bigger, it turned out the screw suppliers were not.

There are of course huge manufacturing ecosystems in the United States — everything from cars in Detroit, to planes in Washington, to advanced medical devices in several major bio-hubs. But consumer electronics is one that has for the most part been lost to Singapore, Taiwan, Korea, and of course, China.

Geopolitically, Foxconn’s factory made a modicum of sense. With the increasing protectionism emanating from Western capitals, Foxconn could have used some geographical diversity in the event of a tariff fight. The company is Taiwanese, but manufacturers many of its products on the mainland.

And of course, a research center is still an enormous gain for a region of Wisconsin that could absolutely use high-income, professional jobs. Maybe the process of rolling out a next-generation manufacturing ecosystem will take more time than originally anticipated, but nothing is stopping further expansion in the future.

Yet, one can’t help but gaze at the remarkable naïveté of Wisconsin politicians who offered billions only to find that even massive subsidies aren’t enough. It’s a competitive world out there, and the United States has little experience in these fights.

India may put friction on foreign firms to protect domestic startups

Indian Prime Minister Narendra Modi. (MONEY SHARMA/AFP/Getty Images)

One of the major battles for tech supremacy is over the future of the Indian IT market, which is rapidly bringing more than a billion people onto the internet and giving them robust software services. I’ve talked a bit about data sovereignty, which mandates that Indian data be stored in Indian data centers by Indian companies, pushing out foreign companies like Amazon, Google, and Alibaba.

Now, it looks like India is taking a page from the Asian tiger-school of development, and is going to increasingly favor domestic firms over foreign ones in key industries. Newley Purnell and Rajesh Roy report in the WSJ:

The secretary of India’s Telecommunications Department, Aruna Sundararajan, last week told a gathering of Indian startups in a closed-door meeting in the tech hub of Bangalore that the government will introduce a “national champion” policy “very soon” to encourage the rise of Indian companies, according to a person familiar with the matter. She said Indian policy makers had noted the success of China’s internet giants, Alibaba Group Holding Ltd. and Tencent Holdings Ltd. , the person said. She didn’t immediately respond to a request for more details on the program or its timing.

The idea of national champions is simple. Unlike the innovation world of Silicon Valley, there are obvious sectors in an economy that need to be fulfilled. Food and clothes have to be sold, deliveries made, all kinds of industrial goods need to be built. Rather than creating a competitive market that requires high levels of duplicate capital investment, the government can designate a few companies to take the lead in each market to ensure that they can invest for growth rather than in, say, marketing costs.

If done well, such policies can rapidly industrialize a country’s economic base. When done poorly, the lack of competition can create lethargy among entrepreneurs, who have already won their markets without even trying.

The linchpin is whether the government pushes companies to excel and sets aggressive growth targets. In Korea and China, the central governments actively monitored corporate growth during their catch-up years, and transferred businesses to new entrepreneurs if business leaders failed to perform. Can India push its companies as hard without market forces?

As the technology industry matures in the West, entrepreneurs will look for overseas as their future growth hubs. The challenge is whether they will be let in at all.

Video game geopolitics

Nexon’s MapleStory2 game is one of its most profitable (Screenshot from Nexon) .

Korea and Japan are two of the epicenters of the video game industry, and now one of its top companies is on the auction block, raising tough questions about media ownership.

Nexon founder Kim Jung Ju announced a few weeks ago that he was intending to sell all of his controlling $9 billion stake in the leading video game company. The company has since executed something of a multi-stage auction process to determine who should buy those shares. One leading candidate we’ve learned is Kakao, the leading internet portal and chatting app in Korea.

The other leading candidate is China-based Tencent, which owns exclusive distribution rights in China of some of Nexon’s most important titles.

Tencent has been increasingly under the sway of China’s government, which froze video game licensing last year as it worked to increase content regulation over the industry. Now the question is whether it will be politically palatable to sell a leading star of Korea’s video game industry to its economic rival.

From the Financial Times:

Mr Wi added that Nexon would be an attractive target for Tencent, which pays about Won1tn in annual royalties to the South Korean game developer. But selling the company to Tencent would be “politically burdensome” for Mr Kim, given unfavourable public opinion in South Korea towards such a sale, he cautioned.

“Political risks are high for the deal. Being criticised for selling the company to a foreign rival, especially a Chinese one, would be the last thing that Mr Kim wants,” said Mr Wi.

Such concerns around Chinese media ownership have become acute throughout the world, but we haven’t seen these concerns as much in the video game industry. Clearly, times have changed.

TechCrunch is experimenting with new content forms. This is a rough draft of something new – provide your feedback directly to the author (Danny at danny@techcrunch.com) if you like or hate something here.

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This newsletter is written with the assistance of Arman Tabatabai from New York

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Internal Activision Blizzard petition rebukes “abhorrent, insulting” leadership

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In the wake of a sexual harassment and pay-disparity lawsuit filed against Activision Blizzard, an internal petition has begun circulating at the gaming company. Its text, as independently verified by multiple outlets, comes down against leadership’s public and private response to the suit’s allegations.

Bloomberg’s Jason Schreier and Kotaku’s Ethan Gach reprinted content from the same petition, and both reporters claim that the petition has racked up “over 1,000 signatures” from current and former Activision Blizzard staffers as of press time. The petition begins by describing a public company statement offered in the wake of July 20’s lawsuit, and a private, staffwide memo sent by Activision executive vice president Frances Townsend, as “abhorrent and insulting to all that we believe our company should stand for.”

“We will not be silenced”

Activision Blizzard’s statements from lawyers and executives last week alleged that the California State’s lawsuit’s allegations were “distorted, and in many cases false,” and the petition aims its words squarely at that characterization. The letter argues that such a corporate response “creates a company atmosphere that disbelieves victims” and “casts doubt on our organizations’ ability to hold abusers accountable for their actions and foster a safe environment for victims to come forward in the future.”

The petition continues:

Our company executives have claimed that actions will be taken to protect us, but in the face of legal action—and the troubling official responses that followed—we no longer trust that our leaders will place employee safety above their own interests. To claim this is a “truly meritless and irresponsible lawsuit,” while seeing so many current and former employees speak out about their own experiences regarding harassment and abuse, is simply unacceptable.

It concludes with a call for the company to make public statements that acknowledge “the seriousness of these allegations” and for Townsend to “step down” from her position at the Activision Blizzard King Employee Women’s Network. “We will not be silenced, we will not stand aside, and we will not give up until the company we love is a workplace we can all feel proud to be a part of again,” the petition adds in closing. “We will be the change.”

After the lawsuit was filed, many former Activision Blizzard staffers used social media to add their own allegations to the public record and confirm their individual contributions to the California State investigation. In one of the longest and most detailed lists of recent public allegations, a former Blizzard staffer (and creator of the company’s first internal “Women@Blizzard” mailing list) alleged the following:

  • A repeated experiment proved that a project director would turn down ideas proposed by a woman, then would approve the same ideas as offered by male colleagues days later.
  • A senior white male engineer had a reputation for unsnapping women’s undergarments through their shirts at the workplace, and concerned staffers were told to “get over it” as they watched said engineer get “repeatedly promoted and rewarded.”
  • Leadership refused a staffer’s use of Blizzard branding to create an “It Gets Better” video that supported LGBTQIA youth—and was told “We won’t be doing that, here.”

“You told me to stick to what I’m good at”

The linked thread points to other public allegations made by former staffers, which range from individual allegations to larger complaints about staffwide culture at Blizzard and Activision. One of these is a reply to former Blizzard executive Chris Metzen, who used Twitter to distance himself from Alex Afrasiabi—himself a former leader of the World of Warcraft team, who is named in the California State lawsuit as an alleged perpetrator of sexual harassment and assault. The reply to Metzen, from ex-Blizzard staffer Connie Griffith, alleged that “you are the one who told me I should stick to what I’m good at, which was apparently taking notes and organizing meetings. Way to mentor junior female talent.”

Speaking of Afrasiabi, an unearthed video from BlizzCon 2010 began circulating shortly after the lawsuit was filed. It showed Afrasiabi, current Blizzard President J. Allen Brack, and other WoW leadership responding to a woman’s question about wanting characters in the game that “don’t look like they stepped out of a Victoria’s Secret catalog.” The all-male panel responded with multiple jokes disparaging the question, with one in particular asking, “which catalog would you like them to step out of?”

This video’s recirculation prompted one of the panel’s members, former WoW lead designer Greg Street, to acknowledge the video on Twitter and reply flatly, “Look, it was a shitty answer at the time, and it certainly hasn’t aged well. I wish I had said something better back then.” He proceeded to insist that, “no doubt, that won’t be my last shitty answer,” then doubled down and claimed that “the only way to get better is to [talk to players] a lot,” without acknowledging one key allegation brought up again and again in the wake of the Golden State lawsuit: that Blizzard leadership often failed to listen to, acknowledge, and make space for women’s concerns—and even retaliated against those who did so.

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Valve promises Steam Deck will run “the entire Steam library” at 30+ fps

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Valve expects that its recently announced Steam Deck portable gaming console will be able to run “really the entire Steam library” on its 1280×800 LCD screen at frame rates of 30 fps or higher.

That’s according to a recent IGN video interview in which Valve Hardware Engineer Yazan Aldehayyat said that “all the games that we wanted to be playable had really good [performance], a really good experience” in Steam Deck testing. Valve developer Pierre-Loup Griffais expanded on that by saying that “all the games that we wanted to be playable” means “really the entire Steam library. We haven’t really found something we could throw at this device that it couldn’t handle yet.”

Griffais said initial prototype testing for the Steam Deck focused on older games in the Steam catalog and that there were “games that were coming out last year that just couldn’t really run very well on the previous types of prototypes and architectures we were testing.” On the finalized version of the hardware, though, he said the company has “achieved the level of performance that is required to run the latest generation of games without a problem.”

“The entire Steam catalog is available to people who have this device,” Aldehayyat added. “That’s where we knew we had a product that was going to deliver the experience we were looking for.”

Aldehayyat attributed Steam Deck’s wide compatibility in part to “future-proofing” internals that include a custom APU incorporating AMD’s latest generation of GPU and CPU technology, as well as 16GB of LPDDR5 RAM. Griffais added that the extreme performance scalability of modern PC games also helps Steam Deck achieve a playable frame rate at its native 800p resolution (which is relatively low compared to desktop gaming PCs).

“If people are still valuing high frame rates and high resolutions on different platforms, I think that content will scale down to our 800p, 30Hz target very well,” he said. “If people start heavily favoring image quality, we might be in a position where we might have tradeoffs, but we’re not in a position where we really see that yet.”

In a follow-up tweet late last week, Griffais clarified that the 30 fps target is the “floor” for what Valve considers playable: “games we’ve tested and shown have consistently met and exceeded that bar so far. There will also be an optional built-in FPS limiter to fine-tune perf[ormance] vs. battery life.”

Steam Deck will come preinstalled with Valve’s Linux-based SteamOS, which can run native Linux games as well as thousands of Windows-based games through a Proton-powered compatibility layer. Steam Deck owners will also be able to install their own OS on the device, including Windows.

Elsewhere in the interview, Aldehayyat said Valve spent a lot of time optimizing Steam Deck’s SD card connection so that games stored there should be “comparable” to those stored on the internal SSD storage. He added that the NVMe storage was connected in a separate module and not directly on the motherboard, which could suggest it will be possible to replace as time goes on.

Listing image by Valve

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MS Flight Simulator on consoles: Finally, a next-gen game for Xbox Series X/S

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When I think of the history of game consoles, I think of flight simulators.

Nintendo in particular has leveraged the “Pilotwings” name not once, not twice, but thrice to show off brand-new tech over various generations. I have long loved that approach. Pilotwings games err on the side of minimal challenge and maximum relaxation, arguably to let players calmly absorb the newest 3D-rendering tricks of each era.

I think about that strategy now because Microsoft Flight Simulator is launching on Xbox Series X/S this week. Since it’s roughly eight months out from those consoles’ launches, it doesn’t count as a “launch” game. But Microsoft Flight Simulator is honestly the first true “next-gen” first-party console game in Xbox’s latest era. Part of that next-gen quality is because this game, unlike other first-party fare, has no “backwards compatibility” path to the older Xbox One family.

It doesn’t take long to realize why. After a tremendous launch on PCs last year, MSFS has now emerged as a living room game with an emphasis on relaxed, Pilotwings-like trips across the entire globe. In good news, it sets a new bar for 3D rendering performance on consoles, and it stands head and shoulders above all other console games at this time. But its PC heritage lingers in the form of some clunkiness. Flight-sim novices—particularly those who claim the game as part of their Game Pass subscriptions—should brace themselves for control- and interface-related turbulence.

Getting up to speed—and that’s a lot of knots

If you’re unfamiliar with MSFS‘s latest incarnation, my report on its reveal nearly two years ago is a good starting point. Much of what I said then (and what I said in a follow-up look at its 2020 beta) is still true. MSFS 2020 combines Bing’s world-mapping data, Azure’s data-processing centers, and some fantastic rendering engine technology to open the entire Earth to unfettered flight. That dev team, lead by the French studio Asobo, employs a lot of clever procedural generation to turn blurry map data into convincing cities, forests, oceans, and valleys for you to fly over.

Since the game’s launch on PC, Asobo has been vocal and transparent about its efforts to spruce up and fine-tune its plane physics simulations, which account for air pressure, heat, and other weather variables. The results have been generally well received by the flight-sim community, and the trade-off for so much beauty and world detail by default is milder physics realism and fewer customization options than rival PC flight sims like X-Plane 11 or Prepar3D. Still, this version of MSFS is Microsoft’s most competent flyer yet.

One point of community contention, however, is MSFS‘s notoriously uneven performance across a variety of PCs. Performance hitches and stutters are more often the rule rather than the exception, while massive download requirements for various patches haven’t necessarily curried favor with PC players. MS and Asobo have promised PC version optimization as far back as the game’s July 2020 beta period, yet to this day, the PC version pulls powerful CPUs and GPUs to their knees at even “mid-high” settings, let alone with unnecessarily maxed graphics sliders.

In terms of CPU optimization, we’re now in “better late than never” territory, because the Xbox Series X/S ports are clearly running on an updated, focused version of the engine. Holy cow, are the results tremendous.

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