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Improbable Worlds’ dream of revolutionising gaming is fading

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Nostos, a video game where players roam a vast “open world”, was launched in December 2019 as a vindication of the cutting-edge technology developed by one of Britain’s brightest prospects: Improbable Worlds.

Improbable, co-founded by 32-year-old Herman Narula, the son of a billionaire construction magnate, hailed the game as a showcase of what developers could do with its software. But 15 months after launch, Nostos has been cancelled.

Nostos is the latest in a string of scrapped games built with Improbable’s SpatialOS software, raising questions about a technology that won a $500m investment from SoftBank in 2017, then the biggest ever investment into a UK start-up.

Improbable’s original goal was to help video games developers build vast online worlds where thousands of players could interact and see their actions persist after they logged off.

Narula also had grander ambitions to apply these huge simulations across government, academia and business that he said could make Improbable a global tech giant akin to Google or Alibaba. “We are building something like The Matrix,” he said in 2017. 

Since the SoftBank round, Improbable has struggled to generate organic gaming revenues while losing half a dozen executives, according to their LinkedIn profiles. It has incurred losses of at least £144m, though the 800-employee start-up still has plenty of funding, according to its latest accounts.

Nostos, by the Chinese gaming giant NetEase — which bought $100m of Improbable shares at a $2bn valuation in 2018 including from shareholders such as Narula — had been the only SpatialOS game active this year.

After the Financial Times contacted NetEase querying the lack of recent updates for the game, the Chinese company announced this month that Nostos would be taken offline in June citing “changes in business development”.

Twenty games developers, former Improbable employees and other people with knowledge of the company pointed to the difficulties some developers have faced in using its technology.

Improbable’s efforts to secure a hit SpatialOS game have left Narula with an unimpressive record to-date, in the view of one industry veteran.

“He wants to change how games are made, but he hasn’t really made any games,” said Hilmar Veigar Petursson, chief executive of CCP Games, the maker of Eve Online, the space-based role-playing game.

Improbable said it had “invested and focused on growth” and that its forthcoming 2020 accounts would show “further growth”. It added that its vision of building virtual worlds “remains unchanged” and that today its technology was a “high-performance, scaling networking solution for a wide range of game types”.

“Hearsay or anecdotes about the alpha or pre-alpha state of Improbable’s first product are wildly out of date and do not reflect the reality of Improbable’s current business or its technology,” the company said.

Masayoshi Son
SoftBank chief Masayoshi Son. The company is one of Improbable’s backers © Kiyoshi Ota/Bloomberg

Narula set out in 2012 to make it easier for small teams of developers to build massive and lucrative online games such as World of Warcraft, which have been the preserve of well-resourced studios.

Improbable’s solution was SpatialOS, which would distribute the huge workload needed to run vast worlds over servers in the cloud while scaling up and down the computing power when needed.

The idea quickly drew interest. “The technology I had always wanted and tried to make was finally here,” wrote Dean Hall, one of Improbable’s earliest collaborators, in 2015.

But building games with SpatialOS could be difficult and potentially expensive, according to eight developers who have used the technology.

Improbable had initially used in its software a programming language called Scala, which computer scientists admire for its precision but which games developers were not familiar with.

Implementing key features of SpatialOS could also require intensive labour, two developers said. The technology shares the task of running a virtual world between different computers. Ensuring a seamless experience as one computer handed off to another could be difficult, they said.

“When you start working [on the transitions], it’s really painful. Things just don’t work by themselves, you need to know exactly how to make everything work,” said Jacopo Pietro Gallelli, chief executive of Dynamight Studios, a Milan-based games developer.

“Once you master it, it’s a very powerful tool,” he added.

At the end of 2016, Improbable began phasing out Scala, ridding developers of a language they disliked while also requiring some to rewrite their games over time.

That prospect contributed to the decision in 2019 of Improbable’s first partner, Bossa Studios, to abandon the game it released in 2017, Worlds Adrift, said people familiar with the matter.

Bossa did not respond to a request for comment. Improbable has said it phased out Scala gradually and provided support to customers through the shift.

Screenshot from the video game ‘Worlds Adrift’
Bossa Studios abandoned ‘Worlds Adrift’ in 2019

In early 2019, Improbable dropped a core selling point of SpatialOS. The company had advertised that its software pushed extra computing power into a game as needed. It removed the function, saying developers had found it difficult to use.

Gallelli, who intends to launch a SpatialOS game called Fractured next year, said scaling up SpatialOS for more players required him to save the game and reboot it with more computing power. “You can do it, but you have to do it yourself manually,” he said.

Other challenges developers cited were the hosting costs of SpatialOS, which Improbable says can be higher because of the extra computing power it uses to deliver better player experiences.

Cédric Tatangelo, chief executive of Ninpô, a Paris-based studio, in 2016 began using SpatialOS for a game called Vanishing Stars but estimated it would have cost $5 per player per month after launch. “There are not many games that can sell a monthly subscription,” he said.

Improbable has said it works with developers to optimise games before launch and is confident that Ninpô’s game would have run at far lower costs.

Another game hit by cost pressures was a project Improbable pursued with Hall, its early collaborator. Hall had paid $2m to Improbable in 2014 to fund the project, a game called Ion that was worked on by an in-house team of 20 developers at Improbable, according to people familiar with the matter.

But Ion was abandoned in late 2015 after Hall learnt, to his surprise, that the money had run out, according to one of the people. In 2017, the two sides agreed a settlement that included shares for Hall.

Hall corroborated those events in an email, adding that in his view: “The technology wasn’t scaling. It was expensive to host on the cloud, performance and bandwidth heavy. How the physics were handled on the server was quite ingenious; but it wasn’t scaling.”

Dean Hall
Dean Hall was one of Improbable’s earliest collaborators © Christian Petersen/Getty

Improbable has seen several top executives depart the company. Its first head of games, Nick Button-Brown, left in 2016 and is now a board member at a rival start-up, coherence.

“I’ve always believed there are truly amazing and revolutionary online games to be made,” said Button-Brown, an Improbable shareholder. “That is why I joined Improbable originally and this is the reason I’m now helping coherence to achieve this.”

Five executives hired in 2017 and 2018 have left the company and a new chief legal officer Improbable announced last April departed after six months, according to LinkedIn.

Improbable said its company-wide voluntary attrition was below the industry average and that some key members of its executive team had served for much of its nine-year history.

Over time, Improbable’s business has evolved. In 2019, it launched a push to release its own games, buying Midwinter Entertainment, which was developing a SpatialOS game, and setting up developer teams in London and Edmonton, Canada. It also bought a games consulting company and in 2020 it acquired a games-hosting business.

“Millions of users play games supported by Improbable’s multiplayer games technology and services, and some of the best-known studios in the world work with Improbable,” Improbable said.

It has also dropped early efforts to deploy its simulation technology in the corporate world and academia, focusing on government work. The start-up’s main revenue to-date has come from contracts with the UK military worth more than £25m since 2019.

“We are developing a software tool providing virtual training for our Armed Forces in simulated environments which constantly evolve with new data,” said the Ministry of Defence. 

Improbable’s 2019 accounts showed more than £270m of cash, treasury notes and bonds. The company says its revenues are growing across all its business lines and that its losses to date are normal for a growth business.

Improbable intends to release later this year the game developed by Midwinter called Scavengers. It is not the massive world filled with thousands of players of which Narula had long dreamt. Rather, Scavengers is a battle-royale game, with up to 60 players in each match, fewer than the 100 accommodated by the hit game Fortnite.

Narula’s lofty ambition to build The Matrix appears to have given way to a more anodyne mission. “We provide better ways to make multiplayer games,” Improbable’s website says today. 

“It’s a far cry from the big idea brand they once had,” said Mike Cook, a games developer and artificial intelligence researcher at Queen Mary University of London.

Follow on Twitter: @kadhim





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Analysis

Iranian TV action thriller delivers warning to Zarif

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It is hardly surprising that Mohammad Javad Zarif, Iran’s foreign minister and nuclear negotiator, is not a fan of Gando, a popular television drama that depicts an incompetent minister who scuppers nuclear talks with world powers by hiring dual nationals who turn out to be spies for MI6.

The series — made by an institute believed to be affiliated to the elite and hardline Revolutionary Guards — “is a lie from the beginning to the end” that “damages foreign policy more than me” by fuelling public mistrust, Zarif said.

By focusing on the nuclear talks, the Guards’ motive goes beyond creating compelling drama, reformist analysts say. Iran is in discussion with western powers about reviving the nuclear deal, a key reformist achievement, and hardliners want to deter the popular foreign minister from declaring his interest in the presidency in what is a crucial election year.

“I’ll be grateful to Gando-makers to let us continue our current job,” Zarif said this month, and commented that he would not run for the presidency.

The possibility of nuclear talks with the US and other powers has complicated an already fraught Iranian political scene ahead of the June election. Many reformists are pinning their hopes on Iran’s top diplomat to reinvigorate the nuclear deal and boost support at the ballot box. Hardliners might prefer to negotiate the deal themselves after the election. The polls are also seen as particularly crucial in case supreme leader Ayatollah Ali Khamenei, 81, dies during the next president’s term.

Pendar Akbari, left, and Ashkan Delavari, right, in a scene from ‘Gando’
Pendar Akbari, left, and Ashkan Delavari, right, in a scene from an episode of ‘Gando’. The series title refers to an Iranian crocodile able to distinguish its friends from its enemies © Bahar Asgari/Shahid Avini Cultural and Artistic Institute via AP

The purpose of Gando, which refers to an Iranian crocodile able to distinguish its friends from its enemies, “is to tell Zarif that should he dare to announce his candidacy, he will be destroyed immediately,” said one reformist analyst. “When the intelligence service of the Guards truly believes in the Gando plot lines, it means even if Zarif decides to defy such warnings, he will not be allowed to run.”

Centrist president Hassan Rouhani is due to step down this year after two terms and it is not yet clear who the presidential candidates will be. Politicians register as late as May and then have to be vetted by the Guardian Council, the hardline constitutional watchdog, which can disqualify nominees. Potential hardline candidates include Mohammad Bagher Ghalibaf, the parliament speaker and a former guards commander; Ebrahim Raisi, the judiciary chief; and Ali Larijani, a former speaker of parliament. On the reformist side, speculation has centred on Es’haq Jahangiri, first vice-president, Hassan Khomeini, a grandson of the founder of the Islamic republic, and Zarif.

A US-educated career diplomat widely respected in the west for his pragmatism, Zarif was instrumental in the historic deal in 2015, under which Iran curbed its nuclear activity in exchange for the lifting of sanctions. But Donald Trump abandoned the accord in 2018, imposed sanctions, including on Zarif, and said he would pursue a new accord to contain Iran’s regional and military policies. The US move emboldened hardliners, confirming to them the untrustworthiness of the US.

Zarif’s background in the US both as a university student and as Iran’s head of mission at the UN — during which he met US politicians including then senator Joe Biden — has long made him a source of suspicion for hardliners.

This wariness of both Zarif and the west is evident to viewers of Gando, as is the heroism of the Revolutionary Guards. Mohammad, the action hero protagonist, warns that western negotiators may sabotage refineries as part of nuclear talks. Mohammad works out of elaborate facilities akin to those in a James Bond film. The fictional foreign minister is advised by a media adviser, the main culprit, “to enter into direct talks with the US and accept the conditions of the leader of the global village”.

Vahid Rahbani in a scene from an episode of ‘Gando’
Vahid Rahbani in a scene from an episode of ‘Gando’. State TV abruptly stopped broadcasting the series that was less than halfway through its 30-episode run © Hassan Hendi/Shahid Avini Cultural and Artistic Institute via AP

The dramatic scenes reflect, in part, the worldview of some of Zarif’s critics. “Reformists, Mr Zarif and his lobby group in Washington [Iranian dual nationals] should be wiped out from Iran’s politics,” said an aide to a senior hardline politician who is a potential presidential candidate. “We have to get rid of this cancerous tumour once for good.”

Gholamali Jafarzadeh, a former conservative member of parliament, said Zarif “is not a good statesman and should not run for president” while “reformists should know that their choices have no chance to be allowed to run”. 

This month, state TV abruptly stopped broadcasting the series that was less than halfway through its 30-episode run. Local media said broadcasts would resume when the presidential race was over. Iran’s centrist president Hassan Rouhani, whose signature achievement is the nuclear deal — alluded to the show on Wednesday and said “people’s money” should not be spent on “fabrication of the truth” and “distortion of facts”.

After three years of sanctions, many voters are disillusioned by the infighting and the prospect of real change, whatever the outcome of the election. “Whether Zarif or a figure more senior than him runs or not, I’m not going to vote,” said Hamid, a 40-year-old engineer. “Let the Guards win the election as they are the ones who are running the country anyway. Why shall I make a fool of myself?” 



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Analysis

Rising inflation complicates Brazil’s Covid-19 crisis

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After seven months in lockdown, Michele Marques received some unwelcome news when she returned to work: while she was away the prices of almost all the products she uses as a hairdresser had soared.

“A box of gloves rose 200 per cent. Colouring products increased at least 100 per cent,” said the 37-year-old from São Paulo, underlining how costs were rising while her revenue had collapsed. “I had to raise the price of my services, too.”

It is a dynamic that is playing out across Brazil, adding an extra layer of complexity to the country’s coronavirus crisis, which has already claimed the lives of almost 350,000 individuals and pushed hospital services to the brink.

With much of Latin America’s largest economy being shuttered, inflation is surging to its highest level in years, fuelling a silent scourge of hunger among poorer citizens that has run in parallel to the Covid-19 pandemic.

“The high price of staple foods — rice and beans, for example — has led to the disappearance of these items from the table of millions of Brazilians,” said Ana Maria Segall, a researcher at the Brazilian Research Network on Food and Nutritional Sovereignty and Security. In the 12 months to the end of March, the price of rice increased 64 per cent and black beans 51 per cent.

“In Brazil currently food inflation has penalised the very poorest, preventing them from having adequate access to food and in many situations leading to hunger,” she said, adding that rising unemployment and the curtailment of social programmes were also contributing factors.

Volunteers hand out food in São Paulo © Alexandre Schneider/Getty Images

Less than half of Brazil’s population of 212m now has access to adequate food all the time, with 19m people, or 9 per cent of its inhabitants, facing hunger, according to a recent report by Segall’s group.

“I’m doing some odd jobs, but it’s not enough to keep us going,” said Jonathan, a 28-year-old who lost his job in the kitchen of a Chinese restaurant in São Paulo when the pandemic began. He said he now struggles to provide enough food for his three young children and pregnant wife.

On a 12-month basis, inflation in June is expected to surpass 8 per cent, far above earlier estimates. In the 12 months to March, food prices jumped 18.5 per cent, while the price of agricultural commodities in local currency surged 55 per cent and the cost of fuel increased almost 92 per cent.

Line chart of Percentage increase over past 12 months showing The price of rice in Brazil is soaring

The developments pose a fresh challenge to President Jair Bolsonaro, who is already under fire for his handling of the Covid-19 pandemic. Across Brazil’s biggest cities, graffiti has sprung up labelling the populist leader “Bolsocaro” — a portmanteau of his name and the Portuguese word for expensive.

The rising prices are also likely to provide useful ammunition to leftist former president Luiz Inácio Lula da Silva, who returned to the political fray last month and may challenge Bolsonaro in elections next year.

“Bolsonaro is to blame for the increase in food prices, he is to blame for everything. They have to remove this guy,” said Maria Izabel de Jesus, a retiree from São Paulo.

Armando Castelar, a researcher at the Brazilian Institute of Economics, said the government had underestimated inflation both in terms of the numbers and also “how much a concern it should be”.

He attributed the rising prices to the devaluation of the Brazilian currency, triggered in part by the stimulus packages passed by the US government — which helped to bolster the dollar and led to higher Treasury yields — and the brighter economic outlook outside Latin America.

“You have a situation where commodity prices are going up because the global economy is going to grow a lot this year. With the growth in the US, interest rates are going up and the dollar is strengthening. This puts a lot of pressure on the exchange rate in Brazil and emerging markets in general,” he said.

As the spectre of inflation loomed last month, the Brazilian central bank raised its key interest rate by 75 basis points, higher than the half-percentage point many economists had expected. A further rate rise is expected next month.

“The central bank acted correctly, but it cannot stop there. It is important not to be too lenient in dealing with this,” said Castelar.

Silvia Matos, a co-ordinator at the Brazilian Economy Institute, also pointed to Brazil’s weakening currency as a contributing factor to inflation. But she said the slide in the real was triggered by investor concerns over Brazil’s deteriorating public finances.

Following the creation of two separate stimulus packages to mitigate the impact of Covid-19, government debt has risen to about 90 per cent of gross domestic product, a high level for an emerging market economy.

The rollout of the second of these packages began this month, with 45m Brazilians set to receive $50 a month for four months.

Critics said, however, these stipends were not nearly enough to keep people both fed and at home in lockdown.

“It is essential that the emergency aid is of a greater value, so that people do not leave the house but no one also stays at home starving,” said Marcelo Freixo, a federal lawmaker with the leftwing PSOL party.

“We need to reduce the circulation of the disease. Brazil is already experiencing 4,000 deaths per day. We will reach 500,000 total deaths by the middle of the year.”

Matos says that inflation had hit poorer citizens much harder than middle-class and rich Brazilians because a larger portion of their income was dedicated to food, the price of which has increased substantially.

“The only thing that could help right now is to get out of this pandemic,” she said.

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Can CVC pull off a $20bn ‘deal of the century’ at Toshiba?

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Proposed management buyout looks like an improbable win for the Japanese conglomerate’s embattled CEO



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