October 27, 2022

Happy Thursday.

Elon Musk is out there talking about how maybe Twitter should be divided up into differently rated experiences, like video games. You're welcome for prepping you for this.

Today's edition: 1,492 words, 5.5 minutes.

1 big thing: Gaming might help kids' brains

Illustration: Aïda Amer/Axios

A new scientific study flips the narrative that playing video games for hours every day is unhealthy for kids. Yes, you read that right.

Driving the news: A study of more than 2,000 children, ages 9 and 10, by researchers at the University of Vermont’s department of psychiatry found that the kids who played games for at least 21 hours a week — aka three hours a day — out-performed non-gamers in some cognitive tasks.

  • The gamers did better than the non-gamers in tests in which they had to control impulsive behavior or memorize information, according to the National Institutes of Health, which promoted the research.
  • During those tests, researchers observed that the gamers’ brains showed more activity in regions associated with attention and memory.

The study’s authors isolated gameplay as the differentiating factor, ruling out gender, parental income and even video viewing, among other variables.

  • They intentionally chose an extreme amount of gaming, exceeding the American Academy of Pediatrics' recommendation that children play no more than an hour or two of games a day.

Yes, but: The scientists could not establish cause and effect.

  • The study is inconclusive over whether games deliver cognitive benefits or if those with cognitive benefits sought out games.
  • “While we cannot say whether playing video games regularly caused superior neurocognitive performance, it is an encouraging finding,” the study’s lead author, Bader Chaarani, said in an NIH report of the findings.

The big picture: The report adds to a body of research suggesting that playing video games, a pastime often dismissed as frivolous, unhealthy or even dangerous, may impart health benefits and that some games can even be used as medicine.

  • That view is fueling gaming startup DeepWell, which is attempting to develop and label games based on specific therapeutic effects.
  • The research is also being cheered by Akili Interactive, makers of an FDA-approved prescription video game that was designed to treat children with ADHD and is in trials as a treatment for long COVID brain fog.
  • “It is motivating to see organizations like the National Institutes of Health continually supporting the study of how screens and brains interact,” Akili CEO Eddie Martucci tells Axios. “This type of new research is critical to advance our collective understanding, and when we're lucky can have the potential to power the next generation of software treatments.”

2. Meta's pricey VR upgrade

Axios' Ina Fried wearing a Meta Quest Pro headset. Photo: Meta

The Meta Quest Pro is by far the most comfortable and practical headset I have tried, but not quite a signal that the future has arrived, Axios' chief tech correspondent Ina Fried writes after using the new $1,499 device for a few hours.

Pros:

  • Pass-through video so you can see the world beyond the headset.
  • Improved optics mean that you can actually read the text of a web page or document.

Cons:

  • Battery life is still pretty pitiful, meaning you have to either stay plugged in or recharge to use it for more than an hour or two.
  • You are paying a lot to be at the leading edge.

Between the lines: While many at Meta are pushing hard that this is a work device, the most likely early buyers are those who already spend time gaming in VR and want the best experience, as well as early adopters who want the latest and greatest.

Stephen's thought bubble: It's hard to tell just what Meta thinks will make its VR investment pay off. Yesterday, the company reported $9.4 billion in losses for its VR/AR Reality Labs division for 2022 so far. It also cited declining revenue due to slowed sales of its consumer-targeted Quest 2 headset, while teasing a new iteration for next year.

3. Microsoft misses Game Pass target again

Halo Infinite. Screenshot: Xbox/343 Industries

Subscriber growth for Microsoft's all-you-can-play Game Pass subscription service fell far short of an annual company target tied to CEO Satya Nadella's pay, according to a new financial filing.

Why it matters: The strength of Game Pass has long been used to measure Microsoft's success in disrupting the gaming industry.

  • It's also become central to discussions about whether regulators should approve the company's $69 billion bid for Call of Duty maker Activision Blizzard.

Details: Microsoft targeted a 73% growth rate for Game Pass for its fiscal year ending June 30, 2022, as part of performance incentives for Nadella and other top executives. But the service only achieved 28% growth.

  • That's two misses in a row. The company also failed to hit the executive pay Game Pass target last year, after exceeding it in 2020.
  • Game Pass growth is the only gaming-related performance target in the top Microsoft executives' pay package.

Between the lines: In an interview yesterday at a Wall Street Journal tech conference, Microsoft's head of gaming, Phil Spencer, framed Game Pass as profitable but limited.

  • It accounts for 10%-15% of the company's content and services revenue (which includes gaming) and is "profitable for us," he said.
  • In remarks transcribed by The Verge, Spencer said Game Pass growth was "incredible" on PC but had slowed down on console, "mainly because at some point you’ve reached everybody on console that wants to subscribe."

The intrigue: The U.K.'s Competition & Markets Authority has cited Game Pass as a point of concern regarding whether it'll approve Microsoft's Activision deal.

  • In a 76-page initial report, it said the deal gives rise "to a realistic prospect of a substantial lessening of competition" in "multi-game subscription services," should Microsoft put Call of Duty on Game Pass.
  • The idea is that offering the popular series — which often accounts for any given year's best- or second-best-selling game — could make Game Pass irresistible and Microsoft problematically unstoppable.

The other side: Microsoft has denied such a move would reach an anti-competitive threshold requiring blockage of the deal, saying PlayStation could always counter by putting better exclusives on its service — or even offer Game Pass on PlayStation.

  • The U.K. group's rejection could kill the bid, though its final decision isn't expected until next year.

4. Need to know

🔥 The hottest game on mobile right now is Marvel Snap, a card game led by Hearthstone experts. The app trackers at data.ai estimate for Axios that the game has been downloaded 2.6 million times in the first week since its Oct. 18 launch.

😲 The Chinese gaming market is expected to decline 2.5% in revenue this year to $45 billion, according to Niko Partners. Lower mobile spending among the country’s 702 million gamers is the culprit. The group says it will be the first revenue decline in its 20 years of tracking the Chinese market.

⚔️ One of CD Projekt RED’s mystery projects is a remake of the original Witcher game, release date TBD.

📺 Amazon has released an image teasing the upcoming show based on the Fallout franchise.

5. The week ahead

Harvestella. Screenshot: Square Enix

Friday, Oct. 28

Saturday and Sunday, Oct. 29 and 30

  • For esports fans, we recommend a skim of Juked's calendar for the weekend’s events.

Monday, Oct. 31

  • Halloween!

Tuesday, Nov. 1

  • EA reports quarterly earnings.

Wednesday, Nov. 2

  • Genshin Impact update 3.2 (PlayStation, mobile) is released.

Thursday, Nov. 3

  • A quiet day.

Friday, Nov. 4

6. I played ... The Legend of Zelda: Link’s Awakening

The Legend of Zelda: Link's Awakening. Screenshot: Nintendo

My kids and I have made a big change in our past month of gaming together.

  • We’ve taken a break from co-op games in favor of a single-player game, 2019 release The Legend of Zelda: Link’s Awakening (14 hours and counting, played on Switch).

My old thinking: In the summer, when I introduced our 5-year-old twins to games, I thought co-op gaming was my only hope to keep them happy.

  • It worked, though it was tricky getting them both to cooperate in a three-player session of Animal Crossing. They mostly enjoyed juggling two-player Kirby adventures with me, but sometimes the odd person out would get frustrated.
  • No way they could handle a single-player game, I figured.

But I decided to risk it and recently introduced them to Zelda, a great Nintendo series all about puzzle-filled adventures that we could talk through together.

  • It’s been working out well.
  • One of us will play and the other two offer tips. They wait for their turn, mostly with patience, to my shock. They give me the controller during tricky parts.
  • And we're actually playing the game cooperatively after all. When I bring up the game’s map screen, they love to walk up to the TV and try to figure out where we should go next (the number of fingerprints on our TV screen is surging).

The only downside so far, for those in the know: We got to a mural in which it’s hinted the game's world isn’t what it seems (notice the title!). My daughter then declared: “If it’s all a dream, this will be the worst game I’ve ever played.”

  • Uh-oh.

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🐦 Find me on Twitter: @stephentotilo.

Thank you to Peter Allen Clark for editing and Kathie Bozanich for copy editing this newsletter.

Imagine the kids' brains if they played for six hours a day.