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Snapchat loses 2M more users in Q3 as shares sink to new low

Snapchat continued to shrink in Q3 2018 but its business is steadily improving. Snapchat’s daily active user count dropped again, this time by 1 percent to 186 million, down from 188M and a negative 1.5 percent growth rate in Q2. User count is still up 5 percent year-over-year, though. Snapchat earned $298 million in revenue with an EPS loss of $0.12, beating Wall Street’s expectations of $283 million in revenue and EPS loss of $0.14, plus a loss of a half a million users.

Snap entered earnings with a $6.99 share price, close to its $6.46 all-time low and way down from its $24 IPO opening price. Snap lost $325 million this quarter compared to $353 million in Q2, so it’s making some progress with its cost cutting. That briefly emboldened Wall Street, which pushed the share price up 8.3 percent to around $7.57 right after earnings were announced.

But then Snap’s share price came crashing down to -9.3 percent to $6.31 in after-hours trading. The stock had been so heavily shorted by investors that it only needed modest growth in its business for shares to perk up, but the fear that Snap might shrink into nothing has investors weary. Projections that Snap will lose users again next quarter further scared off investors.

Worringly, Snapchat’s average revenue per user dropped 12.5 percent in the developing world this quarter. But strong gains in the US and Europe markets grew global ARPU by 14 percent. Snap projects $355 million to $380 million in holiday Q4 revenue, in line with analyst estimates.

In his prepared remarks, CEO Evan Spiegel admitted that “While we have incredible reach among our core demographic of 13- to 34-year-olds in the US and Europe, there are billions of people worldwide who do not yet use Snapchat.” He explained that the 2 million user loss was mostly on Android where Snapchat doesn’t run as well as on iOS. Noticibly absent was an update on monthly active users in the US and Canada. Snap said that was over 100 million monthly users last quarter, probably in an effort to distract from the daily user shrinkage. The company didn’t update that stat, but did say the “over 100 million” stat was still accurate.

Snap CEO Evan Spiegel

Spiegel had said in a memo that his stretch goal was break-even this year and full-year profitability in 2019. But CFO Tim Stone said that “Looking forward to 2019, our internal stretch output goal will be an acceleration of revenue growth and full year free cash flow and profitability. Bear in mind that an internal stretch goal is not a forecast, and it’s not guidance.”

During the call, Spiegel responded to questions about the Android overhaul’s schedule saying, “Quality takes time. We’re going wait until we get it right”. But analysts piled on with inquiries about how Snap would turn things around in 2019. He admitted Snaps created per day had dropped from 3.5 billion to 3 billion per day, but tried to reassure investors by saying over 60% of our users are still creating snaps every day.

Spiegel said that expanding beyond the 13 to 34-year-old age group in the US and Europe, plus scoring more users in the developing world via the improved Android app would be how it restores momentum. But the problem is that courting older users could sour the perception of its younger users who don’t want their parents, teachers, or bosses on the app.

Now down to $1.4 billion in cash and securities, Snap will need to start reaching more of those international users or improving monetization of those it still has to keep afloat without outside capital.

An Uphill Battle

Q3 saw Snapchat’s launch its first in-house augmented reality Snappable games, while plans for an third-party gaming platform leak.  The Snappable Tic-Tac-Toe game saw 80 million unique users, suggesting gaming could be the right direction for Snap to move towards.

It launched Lens Explorer to draw more attention to developer and creator-built augmented reality experiences, plus its Storyteller program to connect social media stars to brands to earn sponsorship money. It also shut down its Venmo-like Snapcash feature. But the biggest news came from its Q2 earnings report where it announced it’d lost 3 million users. That scored it a short-lived stock price pop, but competition and user shrinkage has pushed Snap’s shares to new lows.

Snapchat is depending on the Project Mushroom engineering overhaul of its Android app to speed up performance, and thereby accelerate user growth and retention. Snap neglected the developing world’s Android market for years as it focused on iPhone-toting US teens. Given Snapchat is all about quick videos, slow load times made it nearly unusable, especially in markets with slower network connections and older phones.

Looking at the competitive landscape, WhatsApp’s Snapchat Stories clone Status has grown to 450 million daily users while Instagram Stories has reached 400 million dailies — much of that coming in the developing world, thereby blocking Snap’s growth abroad as I predicted when Insta Stories launched.. Snap Map hasn’t become ubiquitous, Snap’s Original Shows still aren’t premium enough to drag in tons of new users, Discover is a clickbait-overloaded mess, and Instagram has already copied the best parts of its ephemeral messaging. Snap could be vulnerable in the developing world if WhatsApp similarly copies its disappearing chats.

At this rate, Snap will run out of money before it’s projected to become profitable in 2020 or 2021. That means the company will likely need to sell new shares in exchange for outside investment or get acquired to survive.

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White House belatedly begins planning for 5G with memo asking for policy recommendations

The White House has issued a memorandum outlining the need for a new national wireless connectivity strategy; the document doesn’t really establish anything new, but does request lots of reports on how things are going. Strangely, what it proposes sounds a lot like what the FCC already does.

The memorandum, heralded by a separate post announcing that “America Will Win the Global Race to 5G,” is not exactly a statement of policy, though it does put a few things out there. It’s actually more of a request for information on which to base a future policy — apparently one that will win us a global race that began years ago.

In fact, the U.S. has been pursuing a broad 5G policy for quite a while now, and under President Obama we were the first country to allocate spectrum to the nascent standard. But since then progress has stalled and we have been overtaken by the likes of South Korea and Spain in policy steps like spectrum auctions.

After some talk about the “insatiable demand” for wireless spectrum and the economic importance of wireless communications, the memo gets to business. Reports are requested within 180 days from various Executive branch departments and agencies on “their anticipated future spectrum requirements,” as well as reviews of their current spectrum usage.

The Office of Science and Technology Policy is asked to report in the same time period on how emerging tech (smart homes and grids, for instance) could affect spectrum demand, and how research and development spending should be guided to improve spectrum access.

Another report from the Secretary of Commerce will explain “existing efforts and planned near- to mid-term spectrum repurposing initiatives.”

Then, 270 days from today the various entities involved here, including the National Telecommunications and Information Administration and the FCC, will deliver a “long-term National Spectrum Strategy” that hits a number of targets:

  • Increase spectrum access, security and transparency
  • Create flexible spectrum management models, including standards, incentives and enforcement mechanisms
  • “Develop advanced technologies” to improve spectrum access and sharing
  • Improve the global competitiveness of U.S. “terrestrial and space-related industries” (which seems to encompass all of them)

It’s not exactly ambitious; the terms are vague enough that one would expect any new legislation or rules to accomplish or accommodate these things. One would hardly want a spectrum policy that decreased access and transparency. In fact, the previous administration issued spectrum memos much like these, years ago.

Meanwhile, this fresh start may frustrate those in government who are already doing this work. The FCC has been pursuing 5G and new spectrum policy for years, and it’s been a particular focus of Chairman Ajit Pai. He proposed a bunch of rules months ago, and just yesterday there was a proposal to bring Wi-Fi up to a more compatible and future-proof state.

It’s entirely possible that the agency may have to justify and re-propose things it’s already doing, or see those actions and rules questioned or altered by committees over the next year. From what I heard this whole effort from the White House was pursued without much participation from the FCC. I’ve contacted the Chairman’s office for details (he’s out of the country presently and had no prepared statement, which may give you an idea of his level of involvement).

FCC Commissioner Jessica Rosenworcel was not enthusiastic about the memo.

“We are ripping up what came before and starting with a new wireless policy sometime late next year. But the world isn’t going to wait for us,” she said in a statement provided to TechCrunch. “Other nations are moving ahead with strategies they are implementing now while we’re headed to study hall — and in the interim we’re slapping big tariffs on the most essential elements of 5G networks. If you stand back and survey what is happening, you see that we’re not expediting our 5G wireless leadership, we’re making choices that slow us down.”

Whether this new effort will yield worthwhile results, we’ll know in 270 days. Until then the authorities already attempting to make the U.S. the leader in 5G will continue doing what they’re doing.

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Fleksy’s keyboard grabs $800k+ via equity crowdfunding

The dev team that’s now engineering the Fleksy keyboard app has raised more than $800,000 via an equity crowdfunding route.

As we reported a year ago, the development of Fleksy’s keyboard has been taken over by the Barcelona-based startup behind an earlier keyboard app called ThingThing.

The team says their new funding raise — described as a pre-Series A round — will be put towards continued product development of the Fleksy keyboard, including the core AI engine used for next word and content prediction, plus additional features being requested by users — such as swipe to type. 

Support for more languages is also planned. (Fleksy’s Android and iOS apps are currently available in 45+ languages.)

Their other big push will be for growth: Scaling the user-base via a licensing route to market in which the team pitches Android OEMs on the benefits of baking Fleksy in as the default keyboard — offering a high degree of customization, alongside a feature-set that boasts not just speedy typing but apps within apps and extensions. 

The Fleksy keyboard can offer direct access to web search within the keyboard, for example, as well as access to third party apps (in an apps within apps play) — to reduce the need for full app switching.

This was the original concept behind ThingThing’s eponymous keyboard app, though the team has refocused efforts on Fleksy. And bagged their first OEMs as licensing partners.

They’ve just revealed Palm as an early partner. The veteran brand unveiled a dinky palm-sized ‘ultra-mobile’ last week. The tiny extra detail is that the device runs a custom version of the Fleksy keyboard out of the box.

With just 3.3 inches of screen to play with, the keyboard on the Palm risks being a source of stressful friction. Ergo enter Fleksy, with gesture based tricks to speed up cramped typing, plus tried and tested next-word prediction.

ThingThing CEO Olivier Plante says Palm was looking for an “out of the box optimized input method” — and more than that “high customization”.

“We’re excited to team up with ThingThing to design a custom keyboard that delivers a full keyboard typing experience for Palm’s ultra mobile form factor,” adds Dennis Miloseski, co-founder of Palm, in a statement. “Fleksy enables gestures and voice-to-text which makes typing simple and convenient for our users on the go.”

Plante says Fleksy has more OEM partnerships up its sleeve too. “We’re pending to announce new partnerships very soon and grow our user base to more than 25 million users while bringing more revenue to the medium and small OEMs desperately looking to increase their profit margins — software is the cure,” he tells TechCrunch.

ThingThing is pitching itself as a neutral player in the keyboard space, offering OEMs a highly tweakable layer where the Qwerty sits as its strategy to compete with Android’s keyboard giants: Google’s Gboard and Microsoft-owned SwiftKey. 

“We changed a lot of things in Fleksy so it feels native,” says Plante, discussing the Palm integration. “We love when the keyboard feels like the brand and with Palm it’s completely a Palm keyboard to the end-user — and with stellar performance on a small screen.”

“We’ve beaten our competitor to the punch,” he adds. 

That said, the tiny Palm (pictured in the feature image at the top of this post) is unlikely to pack much of a punch in marketshare terms. While Palm is a veteran — and, to nerds, almost cult — brand it’s not even a mobile tiddler in smartphone marketshare terms.

Palm’s cute micro phone is also an experimental attempt to create a new mobile device category — a sort of netbook-esque concept of an extra mobile that’s extra portable — which looks unlikely to be anything other than extremely niche. (Added to its petite size, the Palm is a Verizon exclusive.)

Even so ThingThing is talking bullishly of targeting 550M devices using its keyboard by 2020.

At this stage its user-base from pure downloads is also niche: Just over 1M active users. But Plante says it has already closed “several phone brands partnerships” — saying three are signed, with three more in the works — claiming this will make Fleksy the default input method in more than 20-30 million active users in the coming months. 

He doesn’t name any names but describes these other partners as “other major phone brands”.

The plan to grow Fleksy’s user-base via licensing has attracted wider investor backing now, via the equity crowdfunding route. The team had initially been targeting ($300k). In all they’ve secured $815,119 from 446 investors.

Plante says they went down the equity crowdfunding route to spread their pitch more widely, and get more ambassadors on board — as well as to demonstrate “that we’re a user-centric/people/independent company aiming big”.

“We are keen to work and fully customize the keyboard to the OEM tastes. We know this is key for them so they can better compete against the others on more than simply the hardware,” he says, making the ‘Fleksy for OEMs’ pitch. “Today, the market is saturated with yet another box, better camera and better screen…. the missing piece in Android ecosystem is software differences.”

Given how tight margins remain for Android makers it remains to be seen how many will bite. Though there’s a revenue share arrangement that sweetens the deal.

It is also certainly true that differentiation in the Android space is a big problem. That’s why Palm is trying its hand at a smaller form factor — in a leftfield attempt to stand out by going small.

The European Union’s recent antitrust ruling against Google’s Android OS has also opened up an opportunity for additional software customization, via unbundled Google apps. So there’s at least a chance for some new thinking and ideas to emerge in the regional Android smartphone space. And that could be good for Spain-based ThingThing.

Aside from the licensing fee, the team’s business model relies on generating revenue via affiliate links and its fleksyapps platform. ThingThing then shares revenue with OEM partners, so that’s another carrot for them — offering a services topper on their hardware margin.

Though that piece will need scale to really spin up. Hence ThingThing’s user target for Fleksy being so big and bold.

“We’re working with brands in order to bring them into any apps where you type, which unlocks brand new use cases and enables the user to share conveniently and the brand to drive mobile traffic to their service,” says Plante. “On this note, we monetize via affiliate/deep linking and operating a fleksyapps Store.”

ThingThing has also made privacy by design a major focus — which is a key way it’s hoping to make the keyboard app stand out against data-mining big tech rivals.

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Dropbox expands Paper into planning tool with timelines

Dropbox has been building out Paper, its document-driven collaboration tool since it was first announced in 2015, slowly but surely layering on more functionality. Today, it added a timeline feature, pushing beyond collaboration into a light-weight project planning tool.

Dropbox has been hearing that customers really need a way to plan with Paper that was lacking. “That pain—the pain of coordinating all those moving pieces—is one we’re taking on today with our new timelines feature in Dropbox Paper,” the company wrote in a blog post announcing the new feature.

As you would expect with such a tool, it enables you to build a timeline with milestones, but being built into Paper, you can assign team members to each milestone and add notes with additional information including links to related documents.

You can also embed a To-do lists for the person assigned to a task right in the timeline to help them complete the given task, giving a single point of access for all the people assigned to a project

Gif: Dropbox

“Features like to-dos, @mentions, and due dates give team members easy ways to coordinate projects with each other. Timelines take these capabilities one step further, letting any team member create a clean visual representation of what’s happening when—and who’s responsible,” Dropbox wrote in the blog post announcement.

Dropbox has recognized it cannot live as simply a content storage tool. It needs to expand beyond that into collaboration and coordination around that content, and that’s what Dropbox Paper has been about. By adding timelines, the company is looking to expand that capability even further.

Alan Lepofsky, who covers the “future of work” for Constellation Research sees Paper as part of the changing face of collaboration tools. “I refer to the new breed of content creation tools as digital canvases. These apps simplify the user experience of integrating content from multiple sources. They are evolving the word-processor paradigm,” Lepofsky told TechCrunch.

It’s probably not going to replace a project manager’s full-blown planning tools any time soon, but it at least the potential to be a useful adjunct for the Paper arsenal to allow customers to continue to find ways to extract value from the content they store in Dropbox.

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Daily Crunch: Tesla is profitable again

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here:

1. Tesla earns its first profit in two years

Tesla reported a profit in the third quarter, reversing seven consecutive quarters of losses. This is only the third time in the company’s history that it has achieved this milestone.

The turnaround was driven by sales of the Model 3. The company said customers are trading up their relatively cheaper vehicles to buy a Model 3, even though there is not yet a leasing option and the starting price was $49,000.

2. Trump has two ‘secure’ iPhones, but the Chinese are still listening

A new report by The New York Times puts a spotlight on the president’s array of devices and how he uses them. However, both Trump and a spokesperson for China’s foreign ministry have denied the story.

(BRENDAN SMIALOWSKI/AFP/Getty Images)

3. Red Dead Redemption 2 sets the bar high for the next generation of open world games

Tomorrow, Red Dead Redemption 2 goes live after months of breathless speculation. And according to Devin Coldewey and Jordan Crook, it’s as good as you’ve been hoping.

4. Facebook is building Lasso, a video music app to steal TikTok’s teens

Facebook is building a standalone product where users can record and share videos of themselves lip syncing or dancing to popular songs, according to information from current and former employees.

5. One-year-old Ribbon raises $225m to remove the biggest stress of home buying

The startup wants to replace the incredible stress of securing a mortgage during the home-buying process with a Ribbon Offer: If a buyer can’t secure a mortgage in time for close, Ribbon will pay for the house itself and give the buyer extra time to get financing.

6. Twitter beats Wall St Q3 estimates with $758M in revenue

Twitter reported a 29 percent increase in ad revenue to $650 million, and the company says total ad engagements increased 50 percent year over year. However, user growth didn’t quite match expectations.

7. Confirmed: ShopRunner acquires Spring, raises $40M

ShopRunner is announcing its first infusion of venture funding under CEO Sam Yagan, plus an acquisition of the shopping app Spring. Sources also say it’s readying a major overhaul of its mobile app.

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This is the Fortnite Nerf gun

Short of an actual apocalypse (which should be coming any day now), this Nerf-branded gun from Hasbro is (thankfully) probably the closest you’re going to come to any real life Fortnite action in the near future.

The dart-firing gun was announced recently, alongside a Fortnite version of Monopoly (which launched earlier this month), and now we’ve got some pictures and a June 1 release date. The AR-L Blaster was inspired by the firearm in the wildly popular sandbox survival game and has the giant Fortnite branding across its body to provide it.

The gun has a 10-dart clip, flip-up sight and runs on 4 AA batteries. It’s priced at $50 USD — V-Bucks not accepted, apparently. It’s set to be the first of a series of Nerf blasters inspired by the game, according to Hasbro.

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YouTube is closing the gap with Twitch on live streaming, report finds

Twitch continues to dominate the live streaming market, with approximately 2.5 billion hours watched by viewers in the third quarter of 2018, according to a new industry report out this morning. While YouTube still trails, it’s begun to close the gap with Twitch, it appears. YouTube’s live streaming platform, YouTube Live, started the year with 15 percent of the overall live streaming market’s viewership, but by September 2018, it had grown to roughly 25 percent of all live streaming hours viewed.

These findings, and more, were the subject of a “state of the industry” report released today by StreamElements, which also dug into what’s making these live streaming sites tick.

Of course, Twitch is still the market leader, with around 750 million monthly viewers, on average, who watched over 813 million hours in September. YouTube Live, by comparison, saw over 226 million hours that month, and Microsoft’s Mixer saw just 13+ million.

Also of note is that Twitch’s growth is now coming from the long tail, the report claims. Its top 100 channels haven’t grown much since the beginning of the year – in fact, they’re down a bit, according to the findings. In January 2018, viewers watch around 262 million hours on the top 100, which dropped to 254 million in September.

In addition, Twitch is growing viewership thanks to its expanded focus outside of gaming content. IRL streaming – meaning, watching creators “in real life” going about their day, vlogging, or participating in other activities, for example – is now one of the site’s most consistently growing categories, with 41 million more hours watched in Q3 2018 than in Q1.

This growth likely impacted Twitch’s recent decision to do away with the overarching “IRL” category to instead break down the content into subcategories like music, food & drink, ASMR, beauty, and more, and other organizational changes to its site.

StreamElements also claims that game streams and other content – but not the competitions known as “esports” –  are what’s attracting viewers.

Esports viewership now makes up 9 to 17 percent of overall Twitch viewership, the report says. (This is consistent with findings Newzoo has reported in past years, as well.)

The report’s data, however, is not first-party – it comes from StreamElements’ position as a production and community management solutions provider for live streamers, which allows it some insight into live streaming trends. The company also partnered with streaming analysts StreamHatchet to compile this report, it says.

That being said, it’s not the only one to point to YouTube’s more recent growth. In StreamLabs’ Q2 report this year, it also found that YouTube’s live gaming streams were on the rise, as was viewership. But StreamLabs tends to look at concurrent streams and viewership, so it’s not a direct comparison.

YouTube recently did away with its standalone YouTube Gaming app, and incorporated gaming content more directly into its main site. This could impact its future growth even more than is reflected in this Q3-focused report.

Finally, the report also found that Fortnite’s popularity may have peaked – it’s still the most watched game on Twitch, but since reaching over 151 million hours watched in July, it’s been shedding viewers. The game saw 20 million fewer hours viewed in August, then dropped by another 25 million hours in September.

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Google Maps takes on Facebook Pages with new ‘Follow’ feature for tracking businesses

Google Maps has been steadily rolling out new features to make its app more than just a way to find places and navigate to them. In recent months, it’s added things like group trip planningmusic controls, commuter tools, ETA sharing, personalized recommendations, and more. Now, it’s introducing a new way for users to follow their favorite businesses, as well – like restaurants, bars, or stores, for example – in order to stay on top of their news and updates.

If that sounds a lot like Google Maps’ own version of Facebook Pages, you’re right.

Explains the company, once you tap the new “follow” to track a business, you’ll then be able to see news from those places like their upcoming events, their offers, and other updates right in the “For You” tab on Google Maps.

Events, deals and photo-filled posts designed to encourage foot traffic? That definitely sounds like a Facebook Page competitor aimed at the brick-and-mortar crowd.

Businesses can also use the Google Maps platform to start reaching potential customers before they open to the public, Google notes.

After building a Business Profile using Google My Business which includes their opening date, the business will then be surfaced in users’ searches on mobile web and in the app, up to three months before their opening.

This profile will display the opening date in orange just below the business name, and users can save the business to one of their lists, if they choose. Users can also view all the other usual business information, like address, phone, website and photos.

The new “follow” feature will be accessible to the over 150 million places already on Google Maps, as well as the millions of users who are seeking them out.

The feature has been spotted in the wild for some time before Google’s official announcement this week, and is rolling out over the next few weeks, initially on Android.

The “For You” tab is currently available in limited markets, with more countries coming soon, says Google.

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Xiaomi opts for sliding camera and no notch for new bezel-less Mi Mix phone

Xiaomi has announced the newest version of its bezel-less Mi Mix family, and it doesn’t sport a notch like its Mi 8 flagship. Indeed, unlike the Mi 8 — which I called one of Xiaomi’s most brazen Apple clones — there’s a lot more to get excited about.

The Mi Mix 3 was unveiled at an event in Beijing and, like its predecessor, Xiaomi boasts that it offers a full front screen. Rather than opting for the near-industry standard notch, Xiaomi has developed a slider that houses its front-facing camera. Vivo and Oppo have done similar using a motorized approach, but Xiaomi’s is magnetic while it can also be programmed for functions such as answering calls.

That array gives it a claimed 93.4 percent screen-to-body ratio and a full 6.4-inch 1080p AMOLED display. The slider, by the way, is good for 300,000 cycles, according to Xiaomi’s lab testing.

The device itself follows the much-lauded Mi Mix aesthetic with a Snapdragon 845 processor and up to 10GB in RAM (!) in the highest-end model. Xiaomi puts plenty of emphasis on cameras. The Mi Mix 3 includes four of them: a 24-megapixel front camera paired with a two-megapixel sensor and on the back, like the Mi 8, a dual camera array with two 12-megapixel cameras.

Xiaomi has also snuck an ‘AI button’ on the left side of the phone, a first for the company. That awakens its Xiao Ai voice assistant, but since it only supports Chinese don’t expect to see that on worldwide models.

The 10GB version — made in partnership with Palace Museum, located at the Forbidden City where the device was launched — also packs 256GB of onboard storage and is priced at RMB 4,999, or $720. That’s in addition to a ceramic design that Xiaomi says is inspired by the museum… better that than a fruity-sounding U.S. company.

That’s the special model, and the more affordable options include 6GB + 128GB for RMB 3,299 ($475), 8GB +128G for RMB 3,599 ($520) and 8GB + 256GB for RMB 3,999 ($575). The company also plans to introduce a 5G version in Europe sometime early next year.

Xiaomi said the phones will go on sale in China from 1 November, there’s no word on international availability or pricing right now.

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Red Dead Redemption 2 sets the bar high for the next generation of open world games

It’s been nearly a decade since Rockstar Games introduced Red Dead Redemption, a massive open world game with a story about as reflective of American culture as the Grand Theft Auto franchise.

Tomorrow, Red Dead Redemption II goes live after months of breathless speculation. And yes, it’s as good as you dreamed it. That’s not to say that the layers of interactivity, which are a huge step forward for the next generation of open world games, are not without their faults. But the level of attention to detail, the way that the various components of the game work in conjunction, and the intricacy of even the most mundane activities makes playing Red Dead Redemption 2 feel as authentic as being Arthur Morgan yourself.

But before we dive into the review, it’s worth noting that Devin and I each spent less than a dozen hours playing this game before sitting down to write. In fact, according to the progress bar in my game, I’m less than 20 percent of the way through the story, with even less completed of the challenges and the Compendium (index of items discovered/found). This game is so massive, it would be impossible to bring you thoughtful analysis of the story. We haven’t finished it yet.

We do, however, have some early impressions of the game below. For those looking to avoid spoilers, don’t worry — everything we talk about takes place in the first couple hours of the game and we’ve shied away from naming places, characters, and missions.

A world of details

For a game this big, it kind of makes sense to start with the details. It’s evident that this is an environment not just crafted with care, but presented with directorial intent. That’s important to say right off the bat — this isn’t just a big chunk of land for you to wander, but the stage for a story, and a stage that has been dressed with more care than perhaps any game to date.

It’s easy to talk about square mileage, about how many buildings can be entered, about the hours of dialogue you may encounter. But those are quantitative measures when what matter are the qualitative ones.

The details are what set RDR2 apart. Everywhere you look there are details, from the seams and rips on the dozens of coats you’ll see and wear, to the fact that you have to clean and oil your gun regularly, to how the items you buy are actually on the walls of the general store you visit. The dialogue too is remarkably consistent and well acted, and largely free from anachronism while retaining personality and a sense of humor.

Look at that SNOW.

Although it’s difficult to forget that you’re playing a game, these details make it very easy to fool yourself that the world in which you’re playing is a real place. Nearly everything you do, and how you do it, retains the conceit of the Old West.

I can’t even begin to wonder how much work it took to put this together. I had similar thoughts when I was playing Assassin’s Creed: Odyssey, but while the scale and visual grandeur of that game impressed me, RDR2 hits those same notes while also hitting home in the much more difficult areas of authenticity, believability, and consistent direction.

From RDR to L2

One of the loveliest characteristics of RDR2 is how reminiscent it is of the original Red Dead. Riding my horse along a beaten path, normally near a railway, takes me back to 2010. All the things players have done before — shooting, riding, walking through the world — feel similar to the last game, albeit slightly smoother. The cinematic camera (a page out of the GTA playbook) is particularly delightful, especially in autopilot alongside NPCs leading the way.

The world itself is far more alive and full of detail, and this time around, there is something deeper behind each item, NPC, and animal in the game. Red Dead Redemption taught us that our left trigger button was about aim, and aim only. In the next iteration of the game, L2 opens the door to everything else that this immersive world has to offer.

And it’s this untethering of every single object and character in the game that pushes RDR2 steps toward reality, and leaps forward for gaming.

During Story missions, Arthur can use L2 to make real-time decisions about how to ambush a camp. If he focuses on an item on a shelf in the store, the player can open up a menu through L2 to buy or inspect that item. Focus on an NPC walking around camp, and L2 opens up the options to greet or antagonize them. Approach Arthur’s horse, and L2 opens up a larger menu to feed the horse, brush the horse, or pat the horse. But these aren’t just empty actions. Feeding and cleaning the horse fill her health and stamina cores, and patting the horse increases her bond with Arthur, all of which affect the quality of the horse as a tool.

It’s important to note that, if Arthur gun is equipped, L2 defaults to aiming down sights, which sure can frighten a horse or an innocent NPC.

Like a crow bar, L2 cracked open the whole world of Red Dead Redemption. If you can inspect a letter on a nightstand, flip it over and read the back, and put it down again, what should stop you from inspecting a live animal to see if it’s worth hunting. L2 brings up information about the animal like its name, its quality, and what you can get from it.

Intuitive until it isn’t

You can look up from a treasure map (handy) but have to dig through menus to pull it out in the first place.

Not all of the game’s interfaces are so fluid and convenient. Trotting along through town in my horse, I tap L2 to see if I can sketch a bird flying by, or study a farm dog, or hail a passerby (“hey, pardner!”). But then I see my horse is tired and I want to feed it an apple.

To do this I have to hold L1 to open the radial menu, then simultaneously hit R1 twice to get to the horse menu. Then I hold the right stick down in the direction of the item category I want to use, then (while holding L1 and the stick direction) pull the right and left triggers to find the item I want, and let go of L1 (but still hold the stick!) to use it (X and other normal “OK” buttons don’t do it). Are you kidding me?

Meanwhile time continues to pass in the background, albeit slowly, so you’re doing all this under pressure. Hell, someone might even be shooting at you and you’re trying to quaff a health tonic before returning to the weapon menu to pull out the rifle from your horse storage before you get gunned down.

It seems to me that although much of the world and your interactions with it are smoothed and interpreted from context, whenever that wasn’t possible the developers crammed it into this overworked radial menu system. I’ve gotten more used to it as I’ve played, but it still feels like something that started simple and quickly lost its elegance as it turned into a catch-all bucket for “video game stuff.”

There are also systems that are inadequately explained even when there’s opportunity for it. An early mission has you traveling with one of your bandit companions to hunt a big bear he saw a day’s ride away.

I happened to succeed in killing the bear, and loaded my ‘legendary bear pelt’ on the back of my horse. What was I supposed to do with it? Make a rug? I’d heard a little about pelts but precious little. Then I saw on my map that there was a trapper nearby — surely he would provide the tutorial I needed! But although the item’s description specifically said a trapper could turn it into a talisman, the trapper seemed to be able to do no such thing

Did I need to park my horse closer and hail him with it nearby? Did I “have” the pelt, or did it need to be there? Did I need to sell it to him first? Did I have to craft something on my own? Did I need to talk to my mission guy, or the cook who handles pelts in the camp? I had no clue and the game gave me no indication either. I couldn’t just keep it, since it took up valuable space on my horse — I had to turn down giving a lady a ride home because I’d have had to leave the pelt behind.

Ultimately I brought it back to camp, but couldn’t make anything out of it there either. Carts and boxes were everywhere but I couldn’t store the pelt in any of them. I dropped it on the ground and found myself and it teleported to the edge of camp; a message told me that “items dropped in camp will appear in a convenient place” or something. Oh, so the whole camp is a storage area! Nope. As soon as I rode away I was told I’d “abandoned” the pelt and some of its parts would go to the nearest trapper. What?

I don’t envy the developers and the info dumps they have to place like mines throughout this enormous world and story, but it felt like this was just one stumble after another, with relatively core gameplay elements that were almost completely unexplained. It’s an unexpected and forgivable failure given how much goes right, but the contrast is all the more jarring when it happens.

Nothing mundane about it

Eating stew with a beautiful view

RDR2 sets the bar high in a number of ways, but the overarching achievement is how closely this game tries to mimic reality. In some ways, this opens the world up, and in others, it limits you.

Arthur can’t carry around seven guns at once, so his horse stores the guns he can’t carry. If he forgets to equip his guns before running into a shootout on foot, he’s probably in trouble. Likewise, if Arthur goes hunting and loads a bear skin on the back of his horse, there isn’t any room to bring back a bounty target.

But Arthur isn’t just hunting for sport, or even for food. Whereas the last Red Dead focused on hunting as a way to make money, eat, or simply collect animals in the index, hunting now comes with its own system similar to Dead Eye and is paired together with crafting (which I’ll get to shortly).

The hunting system is called Eagle Eye, and it’s slightly reminiscent of the Instinct mode in Hitman. This system lets Arthur track animal trails, paw prints, animal dung, etc. to find his desired prey. Clicking L3 and R3 simultaneously activates Eagle Eye, and then pressing R1 lets you follow the track without remaining in the slow-mo world of Eagle Eye.

Tracking doesn’t work so well for aquatic animals like fish and alligators, but fishing is an easy, laid-back way to gather food or turn a small profit.

Inspecting animals, via L2, ensures Arthur is targeting the right size and quality of animal, and the method by which Arthur hunts affects the quality of the skins. This seems unimportant, but in the exotic world of crafting, you might find yourself caring a lot.

Crafting allows Arthur or other NPCs (like the Trapper, or the camp cook Pearson) to create new items from stuff they’ve gathered in the wilderness. That could mean mixing up some meat with an herb to create a specific dish, which would have its own specific effect on health and stamina, or bringing back a few pelts to have more comfortable and colorful accommodations around camp.

Again, this method of hunting and crafting is more in line with how an outlaw might actually live off of the land in 1899. And in adding Eagle Eye and the ability to craft, the more mundane parts of Red Dead Redemption have come alive. In the last game, hunting was something you stumbled upon. The most interactive piece of it was buying and setting bait. In RDR2, hunting big game like bears and buffalo is nearly as enjoyable an activity as the story missions.

Stone cold or heart of gold?

The honor system from Red Dead Redemption is alive and well in RDR2, but with some added flare. Because the game tries to mimic real life, with all its opportunities and limitations, the honor system is even more consequential now.

Deeper interactivity through L2 allows you to interact with almost every NPC, even those that aren’t involved in challenges or side missions or story missions. What’s more, those NPCs remember you.

In one instance, a man had been bit by a snake and was screaming out nearby a road. I stopped to help him, sucked the poison out, and went on my way. Later, when I rode into town, he was sitting on a bench outside the gunsmith and he called out to me. He said thanks and offered to pay for any gun I’d like to buy inside the gunsmith. My decision to save him, instead of killing him and looting his body, not only gave me honor points but resulted in a reward.

In another instance, I accidentally pulled out my knife when I got in a bar fight. Instead of innocently beating a dude up, I killed him. The townspeople mentioned the murder the next time I came into town, and the only way to get rid of the bounty on my head was to pay it off at the Post Office.

These decisions and their respective results are pretty straight forward. More nuanced, however, is the effect that Arthur’s honor has on the atmosphere of the game. Honor level changes the way that the story plays out, affects the kill cams, alters the music in the game, and changes the way Arthur dreams and writes in his journal.

In the short time we’ve been able to play the game, it’s hard to tell how extremely this affects the game. I did notice, however, when my honor was at its highest level that one of the shootouts was accompanied by up-tempo (almost celebratory) banjo music, and that kill cams had a goldish tint to them. It’s unclear if that was directly related to my honor or not, but it felt like a subtle dynamic change.

This game offers no shortage of customization options, from your horse to your gun to your clothes to your camp. But there is perhaps no more influential factor that separates one player’s experience of the game from another than Honor.

Dear diary

I want to give an especial callout to the detail lavished on the catalogs and books in the game, as well as Arthur’s journal. The tongue-in-cheek period-style descriptions of equipment and clothing items sometimes run to multiple paragraphs, and as there’s no particular hurry for much of the game, why not take the time to read them?

Arthur’s journal is a treat as well. Although it is in some ways just a way to recap the story for you, it’s a pleasure to read the hand-written entries and the main character’s thoughts on events as they played out; missions will be described differently depending on how they ended or choices you made. And meanwhile every place you visit, and every critter you “study” will be sketched in the book in the order you see them.

This isn’t explained or anything, and I was tickled when I figured it out. I had made a long trek back from a mission and stopped by a few places, scoped out a squirrel, some chickens, a deer and some other things in passing. When I went to my journal a few game days later, there they all were in order, as if (as is the intent) Arthur had in fact been jotting them down while I wasn’t looking.

It’s a shame the journal and books aren’t more prominently presented — the journal is in your horse’s pack, or that’s where it ended up for me. Take the time to read it and anything else you come across; as much effort was put into the writing here as it was everywhere else in the game.

Not-so-final word

Needless to say RDR2 gets a hearty recommendation from us despite some nitpicks and even a couple serious cracks in the carefully-constructed facade. It’s a landmark game in the open world genre and an artistic achievement in its own right. It’s worth your money.

That said, our limited time with the game, and choice to play it as though we were regular players and not blast through to the end, means we’re unable to evaluate the entirety of the game. I find it exceedingly unlikely that the game gets worse — if anything, it likely gets better as the story and gameplay concepts progress.

Still, there are a few specifics we should mention that we plan to look at over the next few weeks.

Online isn’t live yet and won’t be for a while. This isn’t core to the main game but will surely be a huge draw as the game ages and its quality will affect whether it’s worth picking up again or recommending to a friend a year or two from now.

The honor system, though we touched on it, is pretty hard to test thoroughly even with two people playing in parallel. We haven’t been able to experience how the game changes significantly to accommodate your choice of amorality or virtue.

The story is in many ways just beginning, not to mention the side stories of your camp members and other figures you encounter. Did Rockstar frontload all the good acting and setpieces? Does it fizzle out at the end? Doubtful but we can’t say one way or the other. Once we’ve both finished the game or gotten far enough to feel confident in our opinions we’ll issue a followup review and link it here.

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