Digital advertising in a post-cookie world

Written by Pim Korsten
April 2, 2021

As Google is slowly phasing out cookies on Chrome and Apple is making the Identifier for Advertisers (IDFA) opt-in, the online advertising landscape is slowly moving to a post-cookie world. Overall, this will be an improvement for consumers. The cookie era has created an opaque system of programmatic advertising between advertisers and consumers. The incomprehensible mire of players and mechanisms has led to two decades of hardly effective marketing and a strong invasion of the privacy of uninformed or ignorant consumers.

So, what will be next? The industry is already on its way to finding alternatives that bundle data across sites and apps, such as Unified ID 2.0. Furthermore, as first-party data and alternative identifiers such as email and phone number become more relevant, the dominant ad networks of Google and Facebook are likely to benefit and strengthen their duopoly. Third, Google, Apple and others are claiming that they will bring privacy-friendly advertising and metric measurement tools to the market, using cohorts instead of individuals to target audiences and decentralizing the storage of data. Fourth, we might see a partial return to the roots of advertising, with contextual data and situation taking precedence over personal data.

Burning questions:

  • How will small publishers, websites and app developers, who strongly rely on third party trackers and cookies to function or grow, survive in this world? Is an alternative subscription-based business model a viable option for these smaller players of the internet?
  • Which problems will be solved and which new problems will arise when companies such as Google and Apple use cohorts instead of individuals to target audiences?
  • Will the world be better or worse off in terms of privacy if the duopoly of Facebook and Google benefits from this shift to a post-cookie world?

Crowdsourcing morality for autonomous systems

Written by Sjoerd Bakker
February 25, 2021

With the advent of autonomous machines, such as autonomous vehicles, robots and even weapons, comes a need to embed some kind of morality into these machines. By definition, autonomous systems have to make choices of their own accord, to go left or right, to kill or not to kill, and we want these choices to reflect our own values and norms. One way of achieving this is for developers to translate explicit normative rules into code. Another way, arguably more democratic, is to crowdsource morality. For instance, by asking the public to “vote” on all sorts of moral dilemmas (e.g. the well-known trolley problem) or to let autonomous systems learn from our actual behavior (e.g. from observing how we drive). Interestingly, such forms of crowdsourcing could actually result in autonomous systems whose behavior aligns with local values and norms, instead of some kind of desired universal morality. The downside, however, would be that those systems, especially those that mimic our behavior, would not be able to make “better” decisions than we humans can.

Burning questions:

  • Would these forms of crowdsourcing morality lead to increased public trust in autonomous systems and allow for greater societal acceptance?
  • Is the end-goal of moral AI systems to have them align with our norms and values, or is there potential for robots to behave better than we do?
  • Could machines ever become morally superior to humans and what would this mean for the future of humanity?

Democratization of finance

Written by Sebastiaan Crul
February 25, 2021

A lot has been written recently to explain and clarify the GameStop rally. The important reasons are clear: a bunch of new retail investors and young traders were welcomed on financial markets last year. Furthermore, the pandemic breeds boredom and the lockdown forced savers to stockpile money. An already famous revolt against financial elites is what followed. But more important is that these events should be seen in the context of an underlying long-term trend: the democratization of finance. As a consequence of financial innovations (since the 80s), securities have become increasingly easy to access and tradeable with (almost) zero transaction costs.

This has upsides and downsides. More inclusion, liquid stocks and a power shift away from intermediaries have some clear benefits. However, those who think the defeat and big losses of some hedge funds are a prefiguration of the New Financial World, may be in for a disappointment. In the long run, financially illiterate persons will most likely bear the most risk and collect the most losses. Furthermore, if the product is free (trading), you are the product. If there is one important lesson to be drawn from recent events, it would be that the democratization of finance should comprise more than easy access, low fees, and playful interfaces. The challenge ahead will be to create new forms of protection and regulation without being paternalistic.

Burning questions:

  • Is the GameStop Rally ultimately a consequence of animal spirits, mass hysteria, market manipulation or imperfect market structure?
  • Where are we to look for protection of retail investors and regulation of democratized markets: central or decentral governance?
  • At which point do the downsides of extreme liquid markets and zero commission trading (e.g. order flow, investor sentiment, speculation, etc.) outweigh the clear benefits?
  • How can finance be responsibly and durably democratized?

How do we distil a good narrative from 2020?

Written by Pim Korsten
January 14, 2021

2020 was the year of the coronavirus crisis and in 2021, we’ll hopefully be able to leave this crisis behind. How we do that depends on the story we create about it, and the language, metaphors, narratives we want to use. From the perspective of philosophical hermeneutics, we can consider the structure of this story, and how we can actively build a post-corona future.

Our observations

  • In his book Epidemics and Society: From the Black Death to the Present (2020), historian Frank Snowden writes that epidemics have led to large public investments. The plague, for instance, led to the beginnings of public healthcare, as the temporary agencies and emergency ordnances gradually changed into permanent institutions. In his book Epidemics and the Modern World (2020), Mitchell Hammond writes that such initiatives and the first iterations of public administration were therefore of great importance to the modern state.
  • According to French philosopher Michel Foucault, the Enlightenment and modernity were both a curse and a blessing. On the one hand, modernity has brought us much prosperity, in the form of disposable income, better healthcare, better social and physical infrastructure, and new innovations that make our daily lives better and more enjoyable. At the same time, Foucault contends modernity and the Enlightenment have also brought us a new form of power and discipline, “biopower”, and he viewed the new forms and institutions of public healthcare as laboratories for experimenting with new forms of social control.
  • In their book Metaphors We Live By (2003), George Lakoff and Mark Johnson pose that the metaphors we use in our language also influence our direct physical and social experiences. According to them, the conceptual framework from which we interpret and approach reality is metaphorical by nature, and thus subconsciously influences our thinking and actions. Metaphors aren’t fully rational but integrate feelings, thought structures and our imagination into a figurative “image of thought”.
  • Many contemporary thinkers emphasize that humans are a “story-telling being”, and that narratives are a fundamental determinant of how we relate to reality and are able to shape the future. Think of Yuval Harari in Sapiens, Alex Rosenberg in How History Gets Things Wrong, Jordan Peterson in Maps of Meaning, Jeremy Lent in The Patterning Instinct. The base unit of a narrative is a “narreme”, comparable to the “phoneme” (a unit of sound) in phonology (the linguistic study of sound). A narreme relates to the state of affairs in the world and the positioning of story development and events within a certain wider narrative framework.
  • In his magnus opus Truth and Method (1960), Hans Georg Gadamer poses that different domains of life and various sciences have a different understanding of truth and method from a merely scientific one. The humanities have their method of hermeneutics – the art of interpretation – in which meaning is sought. In his final chapter “Language as horizon of a hermeneutic ontology”, Gadamer contends that meaning is always linguistic in nature as man has always interpreted reality and himself from the perspective of a historical and cultural tradition.

Connecting the dots

In our Retroscope, in which we looked back on 2020, we wrote about the term “crisis”: a moment of truth when we must make decisive judgments on what is actually important and what isn’t. A crisis also always forces us to make a political and ethical choice to transform the current situation into a brighter, more positive future. This makes the coronavirus crisis a real crisis, which has set in motion important choices and developments in the domains of geopolitics, technology and culture. The question now is: how do we interpret the events of 2020, and how will we develop a narrative? This is a matter of how the coronavirus crisis can lead to a new consciousness and how we should understand ourselves. Firstly, we could characterize the coronavirus crisis as a “formative experience”, as a consequence of which a new generation will adopt a new set of values, norms and ideas. This is apparent in our scenarios from the Resilient World in the domains of technology, culture and geopolitics. The coronavirus crisis could also leave an imprint on our political, technical and social systems (just as the Second World War left an imprint on our socio-technical systems). “Imprint” is a term from biology and psychology, which refers to changing behavioral processes of humans (and animals) as a consequence of being exposed to external stimuli (e.g. imprinting in genetics and developmental psychology). The coronavirus crisis will also leave such an imprint on our subjective and objective consciousness.

It’s important how we formulate and understand this in language and concepts, express it in metaphors, media and stories. For example, think of the long-term consequences of pandemics on the development of modern institutions and public government services such as healthcare, and how we should understand and assess these new forms of “biopower”. What’s crucial in this is the narreme we develop; the wider framework from which we consider and position the coronavirus crisis and its consequences within a narrative axis. Northrop Frye (1912-1991) was an important thinker in the comparative narratology in literature. In his masterpiece Anatomy of Criticism (1957), Frye analyzes the narrative categories and patterns in different literary traditions, and devises an “anatomy” of historical modes, ethical symbols and archetypical myths and rhetorical genres.  How does this relate to the coronavirus crisis? And what can we expect from the so-called “post-corona narratives”?

The coronavirus crisis is best perceived from the tragic mode. The Ancient tragedy is about how people relate to their fate and ill-fortune, which serves to inspire pity and fear in the audience in order to achieve “catharsis”: emotional purification. The comedy, by contrast, is marked by protagonists making blunders and mistakes, while still ending happily, thus achieving catharsis in the audience through laughter, humor and enjoyment. The coronavirus crisis caught many people off guard, and is often seen as a manifestation of Fate (e.g. as a religious reprimand or nature’s pushback against the hubris of modern man). In this tragedy, we may apply the framework from Frye’s first essay to distinguish various tropes, such as the highly mimetic coronavirus tragedy (marked by the sacrifices people such as nurses make to fight the coronavirus) or the ironic tragedy (man’s weakness in the face of nature or other lifeforms). When we consider different types of “coronavirus symbols”, the first one we notice is the descriptive symbol of the virus that’s bringing humankind, and even entire “superorganisms” such as economic systems (e.g. healthcare or the economy) to their knees.

The visual symbol ties in closely with the use of metaphors, such as the prison as a metaphor for working from home, or the desert for the empty cities during lockdown. The mythical symbol displays the relationship to other symbols of our time that, as we’ve argued before, are metamodern in nature. The anagogic symbol represents the spiritual value of the coronavirus crisis, and whether it will lead to a better, more enlightened future or not. The mental side of the experience of the coronavirus crisis is also considered, such as the moods inspired by the coronavirus or our ideals in this post-corona world.

This brings us to the archetypical myths: which original images, figures and ideas emerge in our visualization of the coronavirus crisis? Describing these moods, ideals, experiences, in short: the mental side of the coronavirus, isn’t about explaining or categorizing various psychological phenomena – the cognitive and neurosciences are much better equipped to do this – but helps reveal the meaning of our world and existence in society. This means we can expect new media that – implicitly or explicitly – are a result of the moods of the coronavirus crisis and quarantine, in the same vein as the “post-9/11 media” or the “atomic culture” that arose after the bombings in Japan and the critical philosophy (e.g. the Frankfurter Schule) that came into being in response to the Second World War.

This shows that our visualization of the coronavirus crisis and the narrative we create about it is ultimately the product of how we interpret the historicity of the coronavirus crisis: is it the end of the world as we know it, thus an epoch of decay, or in fact the beginning of a better world and thus of spiritual reassessment? It’s interesting to see that “cyclical theories” such as the generational dynamics of Strauss and Howe, the theory concerning technological revolutions and hegemonic cycles and economic paradigm shifts point to such a turning point. They highlight that a post-corona world might look radically different, and that such a narrative might be constitutive or even performative in creating a better future.

Implications

  • The coronavirus crisis could become a new “grand narrative” with which rifts could be closed. This will probably be utopian in content, as a response to postmodern skepticism and modern naiveté. For this narrative to be told, it’s crucial that creative artists can get to work on this. Especially now that many of us are in social isolation, stuck at home without the possibility of seeing friends and family, it’s conceivable that the coronavirus crisis may lead to a period of enormous creativity and invention. Film makers, for example, now have the time to consider new formats and pieces. We’ve written before that the Zeitgeist and a “structure of feeling” are manifesting in art, media and popular culture.

  • Another important aspect of this visualization is speculative design. Precisely because the coronavirus crisis is a real crisis that’s changing the course of the world and humankind, we can’t extrapolate the past and have to experiment with new images and forms of visualization. What scenario thinking is to theoretical thinking, speculative design is to visualization.

Trump is making opposition media great (the platform becomes the bubble)

On November 5th, CNN interrupted a speech by President Trump because he was making unfounded claims about electoral fraud. Twitter and Facebook have also repeatedly labeled statements by Trump as misinformation. Moreover, Twitter has announced that it will not grant him anymore special treatment when he is no longer president and will delete his account if necessary. Supporters of Trump and his ideas have long sought alternative news sources and platforms where they can freely express their views.

When Trump began retweeting Newsmax, a conservative American news and opinion website that refuses to acknowledge Biden winner of the elections, it saw its visitor numbers soar (from an average 500,000 to 7.3 million a week). Conservative Twitter alternative Parler is currently even the most downloaded app in the U.S. Trump may start his own media outlet, but in any case, his departure from the White House will considerably boost these existing “opposition media”. Slowly but surely, completely separate universes will arise, even more so than now, with different groups each inhabiting their own platforms.

Who do we trust in the stack war?

Short Insight written by Arief Hühn
October 7, 2020

After threats from Trump to ban TikTok on security grounds, Oracle, Walmart and TikTok’s mother company Bytedance have proposed a deal in which the U.S. will have a 20% stake in TikTok Global. Furthermore, Oracle will host the service for the U.S. as a ‘trusted technology provider’, in order to guarantee the safety of U.S. citizens’ data. However, the deal will not involve the transfer of the service’s algorithms.

The fight over services and underlying algorithms and user data seems to be a progression of the tech war that mostly has been focusing on lower layers of the stack, whether it be rare-earth metals, hard infrastructure (Huawei) or soft infrastructure (new IP). Even though the deal still has to be approved by the U.S. and China, we can already expect that the dependency on trusted providers and tech could become a future template for popular services that aim to operate across adversarial national stacks. In fact, Apple and Amazon are already subjected to a similar treatment for their services in China.

Racial representation in Hollywood

Written by Joep Schot, september 25 2020

The Academy of Motion Picture Arts and Sciences recently announced that, from 2024 onward, movies must meet newly imposed diversity criteria to be considered for Best Picture, the final and most prestigious Oscar of the world-famous award ceremony. To be precise, at least 30% of cast members, production and distribution teams must be part of underrepresented groups based on race, gender, sexuality and disability status to evade ineligibility.

The announcement coincided with the premiere of Disney’s live-action remake of Mulan, which stars Chinese-American actress Yifei Liu. Many celebrated the casting of Liu, mindful of the successful anti-whitewashing petition and #OscarsSoWhite activism that preceded it. Mulan does, however, cover another chapter of racial supremacy, namely China’s oppression of its northern, Mongolic peoples, to which many historians believe Hua Mulan belonged. Liu, conversely, belongs to the hegemonic Han people. The financial advantages of appeasing the Chinese government impede the ethnic representation the very same industry is trying to foster at home. Unsurprisingly, there seems to be no easy fix in this complicated world of race politics.

Is the meme culture causing an increase in widespread stereotypes?

Written by Jessica van der Schalk, september 9 2020

Some think it’s funny, others deem it yet another example of the stigmatization of women. In any case, the internet meme “Karen” has become world-famous. It’s the stereotype of an entitled white woman who feels aggrieved and expresses this in a slightly hysterical way by invoking her rights. The deployment of a proper name to signify a stereotype is not new: consider the widespread use of “Scrooge” to refer to an avaricious person. But the possibilities of the digital meme culture might lead to a rapid surge in the forming of such stereotypes.

Our observations

  • The term internet meme generally refers to an image, short video or audio recording in which an idea (e.g. that denying climate change is idiotic), certain type of behavior (e.g. when a “boomer” expresses views considered outdated) or style trend (e.g. that of the hipster) is humorously depicted and subsequently shared so often that the message quickly spreads among a large group of people.
  • It’s become difficult to imagine our daily digital communication without the use of internet memes. This can partly be explained by the visual culture in which we communicate less with language and more with images, and by the fact that our attention span has shortened. A meme is a way to bring across ideas that befitting our time: they’re easy to “consume”, require little to no effort to read and can easily be opened on any smartphone.
  • Because memes provide an effective way to spread ideas, they’re increasingly used in political debate. They allow for a political message to be quickly communicated and spread. President Donald Trump, for example, is known for using memes to send a specific message.
  • As we wrote before, the “Karen” meme is currently one of the most widespread and widely discussed internet memes. The American literary-cultural magazine The Atlantic, for instance, wrote a critical piece about this meme, because in a sexist way, it ascribes certain universal behaviors exclusively to middle-aged white women. The stereotype arising from this is more negative than funny, in contrast to many other memes which are more funny than negative.

Connecting the dots

The use of a proper name to invoke a certain stereotype is not new. “Scrooge” is one of the most well-known examples of this. Ebenezer Scrooge is a character from Charles Dickens’ famous A Christmas Carol, who is guilty of greed, selfishness and believes the poor get what they deserve. Likewise, “Don Juan” is known to signify a man only interested in seducing as many women as he can. There are also less widely known examples used more locally, such as the Dutch “Sjonnie and Anita”, referring to a vulgar boy and girl from lower social strata who often drive around on a moped or motor scooter. A stereotype is generally negative, if only because it reduces a person to a limited set of qualities. But in internet meme culture, the point is to also highlight a funny aspect.

Although most memes don’t cause any controversy because of their humorous approach, the general criticism is that they can contribute to the polarization of public debate both on and off social media. A stereotype generally effectively puts a stop to any conversation; when someone is dismissed as being a Scrooge, it becomes very difficult for that person to credibly explain why he is careful with his money other than out of sheer selfishness. One of the most recent and widespread memes is the Karen meme, which invokes a negative stereotype about middle-aged white women. This is one of the few memes that was subject to much reflection in renowned newspapers and magazines. Karen symbolizes a white middle-aged woman who unpleasantly attempts to exercise her rights, is racist, doesn’t believe in vaccinations and resists coronavirus measures. The reason this meme has come under such scrutiny is not merely its popularity, but also the sexist way it dismisses women.

And yet there are more memes like this, such as “Kyle”, an angry and aggressive white teenager who drinks Monster energy drinks and uses Axe body spray.

In the past, it was more difficult for a stereotype to become as widespread as they are now. First, one had to understand the content of the stereotype, which was only possible through clarification. Scrooge, for example, is well-known because A Christmas Carol is a worldwide childhood classic, but the Lolita stereotype isn’t as prominent, as this derives from the similarly titled novel by Russian-American writer Vladimir Nabokov, which isn’t nearly as widely read as A Christmas Carol. Contrary to the stereotypes with proper names that predate the digital era, internet memes are much more easily distributed across the world. Moreover, and importantly, internet memes are far easier to understand as they are comprised of images, creating a recognizable type within seconds, as opposed to an entire book or essay one has to read first. In addition, the humoristic aspect of memes makes them fun to look at, which also contributes to their popularity. And, in conclusion, more people have access to memes than to written text in a book or newspaper, as they are easy to open on any smartphone. The popularity of internet memes may therefore result in a rapid increase in such use of proper names worldwide.

Implications

  • With the accumulation of internet memes like “Karen”, “OK Boomer” and “Kyle”, negative stereotypes about specific groups will become more common. The humorous nature of internet memes and their potential ubiquity on social media make it difficult to shed a certain stereotype once it’s been expressed.

  • As a communication tool, the use of a meme like “Karen” or “Kyle” is very similar to a fallacy. In general, a fallacy refers to an argument that is incorrect, but seems plausible. There are different types of fallacies, of which “ad hominem” (attacking the person making an argument, rather than the argument itself) and “slippery slope” (the argument that a small step will or must lead to a certain chain of events, with each link in the chain erroneously accepted as a given) are arguably the most well-known types. Deploying the stereotype of “Karen”, for example, is similar to the use of ad hominem: the argument made by the woman in question is immediately disqualified because she is a Karen, regardless of whether her argument is sound. If the internet meme culture does lead to an increase of this type of communication tool, this could hamper and stall public debate, as there will be more tolerance for unsound but seemingly plausible reasoning.

Blurring boundaries with mixed reality toys

Written by Arief Hühn, september 9 2020

What happened?

In the past few months we have seen the launch of a range of toys that aim to introduce digital elements in the physical realm and vice versa. After the introduction of Nintendo Labo, which allowed gamers to build their own card box interfaces with which they can play digital minigames, the company has launched Mario Kart Live, which combines virtual racing with a remote-controlled physical toy car. Additionally, the car records video, which is blended into the virtual gaming world on the console screen. Nintendo and Lego have also launched Lego Mario, which integrates screens, sensors and connectivity to physical Mario-themed Lego pieces, allowing the player to reenact the platform game physically. Previously, Lego also introduced its Hidden Side series, in which its Lego sets are enriched with AR content through a mobile app. Soon, the company will also launch the next generation of programmable Lego Mindstorms with improved sensors and actuators. It is noteworthy that Nintendo and Lego, who have a track-record in innovating gameplay, once again seem to be the main drivers in this mixed reality toy market.

What does this mean?

Although the combination of physical toys and digital elements is not necessarily new, it seems that toymakers and game developers are exploring the possibilities of this new generation of mixed reality toys in a more creative way. Whether it be by revaluing physical properties (e.g. tactility, scarcity, friction) within a virtual context (i.e. augmented virtuality) or by further experimenting with how the virtual can augment the physical (e.g. augmenting storytelling, expressions, social sharing, programmability, etc.). On the other hand, mixed reality toys also open the door to hacks, surveillance and data misuse.

What’s next?

Toy makers will increasingly experiment with the boundaries between the digital and the physical. Currently, the playful interaction between the virtual and physical seems to be limited to small-scale objects. However, as mentioned earlier, these interactions, with the right enabling technology in place, could also involve everyday objects in our homes and cities. On a more fundamental level, these playful experiments could implicitly nurture a different understanding and experience of the digital world among younger generations, in which the distinction between the digital and the physical might be replaced by a more integrated hybrid worldview.  

The resistance to the hegemony of the App Store

Written by Sebastiaan Crul, august 26 2020

The gloves are off between tech companies Epic and Apple. Epic recently tried to avoid paying the App Store’s commission in the game Fortnite and Apple responded by, among other things, banning Fortnite from the App Store. This battle of the tech titans is exemplary of the growing resistance to the platform hegemony of app stores. Epic is among an illustrious list of powerful tech companies (Netflix, Spotify, Matchgroup, etc.) that increasingly oppose the tech superpowers. These aren’t innovative start-ups challenging the incumbents, but powerful tech companies acting as a strong counterforce to Big Tech. This trend points to a possible turnabout in the economic relations between large tech companies and the alternative digital platforms that are emerging in the gaming world.

Our observations

  • To use their Platforms and operating software, Apple and Google require that apps pay 30% fee for app downloads and most virtual in-app purchases. They claim that the 30% commission is necessary to keep the app store up and running and ensure users’ safety. Furthermore, Apple refuses to offer flexible rates for valuable customers. In their opinion this leads to unfair competition. But this argument lost a lot of credibility when it became known during the Congress hearing that other companies such as Amazon pay vastly lower rates (15%).
  • Apple is facing the most pressure. Spotify was one of the first companies to openly defy Apple. The streaming service filed a complaint and launched a campaign to inform users of Apple’s unfair policy. Spotify’s complaint mainly pertains to unfair competition; not only does the streaming service depend on the platform to reach users, it also has to compete with Apple’s own music service.
  • In the past, Netflix has also attempted to lure customers directly to its website to avoid paying commission. Direct payment through the Netflix website could save hundreds of millions of dollars per year.
  • The App Store is also criticized for the arbitrary difference between physical and virtual goods sold through apps. When, for example, a hamburger is purchased from a delivery service, no commission is paid, whereas Apple does demand its share with every virtual item sold. Because of corona, many physical services were forced to enter the virtual domain, and much to their dismay, companies such as Airbnb and ClassPass suddenly had to pay 30% commission for their virtual services.

Connecting the dots

The dispute between app stores and app suppliers has been underway for ten years already, but now seems to be undergoing reconfiguration. There’s growing resistance among tech companies that, although they are largely dependent on the mobile platform of Apple or Google, have a strong market position, a gargantuan customer base and are worth billions moreover (e.g. Netflix, Spotify, Epic and Matchgroup). These days, an Iphone without access to Netflix, Spotiy or Tinder would be hard to imagine. Consequently, it’s a battle of powers against superpowers. Epic is currently leading the latest attack from this front but belongs to a larger group of companies that became strong through the services and media platform they operate on top off the operating software of Apple and Google and now have the courage to undertake steps. These are companies that have grown considerably in the past decade, partly by virtue of big tech, and are now looking for ways to reshape power relations.

Epic’s timing seems a cunning strategy: the desire of governments and overseers to break up big tech appears to be reaching a new high, fully in line with American tradition. But the challengers are also turning to the customer directly with a bona fide charm offensive, a logical choice for parties that excel at customer relations and together reach billions of users each day. The campaign consists of clear websites with explainers, satirical videos and hashtags on social media. Especially Apple is under fire, once itself champion of ideals such as freedom and creativity, now portrayed as a totalitarian monopolist.

What’s remarkable is Epic’s frontal attack on Apple, while Google is mainly spared criticism, and gaming computer platforms are getting off scot-free. The latter (i.e. Microsoft, Sony and Nintendo), for instance, charge the same rate for microtransactions as Apple does, but have not faced the same disapproval. A simple explanation for this could be that Epic deems the console makers’ commission legitimate, as this hardware is sold below cost and pushing it requires expensive marketing campaigns. But matters are probably a bit more complicated; for a player base for its cash cow Fortnite, Epic is still mainly dependent on game consoles (71%) rather than mobile devices (12%), besides which it needs partners in its battle against the hegemony of the mobile platform. It’s been at odds with Microsoft, but they seem to have buried the hatchet and intensified their cooperation on Hololens 2. Epic has managed to get Sony to support cross-play and the latter recently became an investor in Epic. The novel cooperation with Sony’s music branch is one of the pillars of this renewed alliance. Finally, Epic has made clear that its game engine Unreal, one of the company’s most important assets, will mainly be geared towards next-generation game consoles.

There are ideological motives at play as well. These alliances not only strengthen the economic front against the mobile platforms of Google and Apple, they also allow for an alternative digital ecosystem that doesn’t run on iOS or Android and embodies different values. With standards such as cross-play, lower commissions for creators and developers, sustainable revenue models and interoperable platforms and hardware, Epic and its partners are anticipating an alternative future for the digital world. This is the infrastructure on which Epic CEO Tim Sweeney would gladly realize his ideal of the Metaverse: connected virtual worlds where we play games with a virtual replica of ourselves, but also attend concerts, hang out with friends and purchase items of virtual clothing. In his blueprint of the future, the infrastructure is facilitated by different platforms, but our avatar won’t notice this when he “walks” frictionlessly from world to world and from service to service. This alternative ecosystem has its roots in the gaming world and in the coming years, monetization of games will be the focal point for providers on the platform, but other industries are gradually becoming interested. The music industry, clothing industry, film industry and advertising industry are all watching the rise of these alternative digital platforms with great interest. In this regard, Epic’s successful game Fortnite can be situated as a facet of a much broader movement of alternative digital ecosystems becoming fierce competitors to tech giants of the likes of Apple, Google and Facebook.

The resistance seems to form a powerful front, but some nuance is appropriate here concerning the first American company to reach the $2 trillion market cap last week. What Apple is under attack for – a closed ecosystem with unfair conditions for providers and developers – also encompasses the roots of its core competence and the winning formula to its growth of the past two decades. The vertical integration of hardware and control software, the foundation of the App Store, facilitated an unprecedented degree of security and trust in the digital world. Moreover, it brought order and simplicity to the digital economy and Apple reached new levels of customer friendliness and ease of use. Then there’s also large economic potential in the bundling and integration of digital services and Apple’s current strategy is to double down on this bundling to generate constant revenue, since competition on the smartphone market has become fierce.

That’s why Apple won’t simply give way to the resistance and has plenty of reasons to continue to believe in its own competencies and philosophy. But the time of tacit acceptance and some grumbling from the sidelines appears to have come to a definite end, now that anti-monopoly sentiment is becoming more widespread and users are presented with viable alternatives.

Implications

  • With its cooperation with Microsoft on the Hololens 2, Epic might have set sights on the next dominant platform after mobile. The combination of game engines and controllers from the gaming world with Microsoft’s AR technology is a powerful combination of assets. It’s a hybrid medium that appears to be able to unbundle the smartphone and its touchscreen while retaining the visual lavishness and user-friendly tactile aspect of the touchscreen.