TikTok and WeChat show up Silicon Valley apps
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The jockeying by Microsoft and possibly other US companies to buy TikTok’s US operations shines a harsh light on how the country’s domestic technology giants are falling behind on innovation in social media and other areas of opportunity.
Both ByteDance’s TikTok and Tencent’s WeChat are living on borrowed time in the US after President Donald Trump signed executive orders last week effectively banning the apps after 45 days. The renewed focus brings to the forefront how badly US social media apps have lagged their Asian counterparts.
Consider Twitter, for example. Despite spending about $700m a year on research & development, the microblogging company’s main offering has stayed virtually the same over the past decade. Amazingly, its biggest innovation may be doubling the character count for each tweet in 2017. That is not an impressive return on large amounts of investment spending. Similarly, Facebook’s and Google’s platforms have not been much better. The core functionality of Instagram’s photo-sharing scrollable feed and YouTube’s video search interface have not changed much over the past few years.
In contrast, TikTok has brought significant innovations to short-form videos. Its personalisation algorithm surfaces the most relevant entertaining content for its users, driving the app to be the most downloaded in the world thin 2020; it now reaches 100-million Americans. And while US services languished, WeChat has also become a super-app, expanding from messaging to payment, shopping, gaming and many other features.
Nowhere is the gap more apparent than in the critical and attractive growth market of video games. Demand has soared as consumers turn to video games for in-home entertainment under shelter-in-place orders. According to the NPD Group, US video-game sales rose 30% in the second quarter compared with those a year earlier. And the industry growth spurt may just be starting. Technology advances from cloud computing, semiconductors and gaming engines coming soon are positioning the industry on the cusp of a multiyear wave of innovation. Research firm Newzoo projects the gaming market will grow from about $160bn this year to nearly $200bn by 2023.
And the impressive growth in video games may be more sustainable because they are becoming the social networks of the future. Last week, Activision Blizzard CEO Bobby Kotick talked about this important trend on a call with investors: “Games provide social interactions that connect people more deeply than any other form of entertainment,” he said. “We expect that as new players ...
Both ByteDance’s TikTok and Tencent’s WeChat are living on borrowed time in the US after President Donald Trump signed executive orders last week effectively banning the apps after 45 days. The renewed focus brings to the forefront how badly US social media apps have lagged their Asian counterparts.
Consider Twitter, for example. Despite spending about $700m a year on research & development, the microblogging company’s main offering has stayed virtually the same over the past decade. Amazingly, its biggest innovation may be doubling the character count for each tweet in 2017. That is not an impressive return on large amounts of investment spending. Similarly, Facebook’s and Google’s platforms have not been much better. The core functionality of Instagram’s photo-sharing scrollable feed and YouTube’s video search interface have not changed much over the past few years.
In contrast, TikTok has brought significant innovations to short-form videos. Its personalisation algorithm surfaces the most relevant entertaining content for its users, driving the app to be the most downloaded in the world thin 2020; it now reaches 100-million Americans. And while US services languished, WeChat has also become a super-app, expanding from messaging to payment, shopping, gaming and many other features.
Nowhere is the gap more apparent than in the critical and attractive growth market of video games. Demand has soared as consumers turn to video games for in-home entertainment under shelter-in-place orders. According to the NPD Group, US video-game sales rose 30% in the second quarter compared with those a year earlier. And the industry growth spurt may just be starting. Technology advances from cloud computing, semiconductors and gaming engines coming soon are positioning the industry on the cusp of a multiyear wave of innovation. Research firm Newzoo projects the gaming market will grow from about $160bn this year to nearly $200bn by 2023.
And the impressive growth in video games may be more sustainable because they are becoming the social networks of the future. Last week, Activision Blizzard CEO Bobby Kotick talked about this important trend on a call with investors: “Games provide social interactions that connect people more deeply than any other form of entertainment,” he said. “We expect that as new players ...
