Tech Brew Ride Home - Wed. 06/07 – Maybe Apple DOES Want To Get Serious About Mac Gaming

Episode Date: June 7, 2023

Maybe I was wrong. Maybe Apple does want to get serious about gaming on the Mac after all. Maybe I was right. Sequoia splitting in three IS about China after all. Samsung is holding an event at home for the first time in forever. And Matt Levine answers my questions about what now for Coinbase? Back to just trading bitcoin and ether? Sponsors: NewtonX.com/techmeme Links: macOS Sonoma lets developers port Windows games to the Mac; here’s how it works (9to5Mac) Apple makes iOS 17 developer beta free for registered developers (9to5Mac) Sequoia’s Split Sends Warning to US Companies Doing Business in China (Bloomberg) Samsung officially confirms first Unpacked event in Korea for new foldables (9to5Google) The SEC Comes for Crypto (Matt Levine/Bloomberg) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Wednesday, June 7th, 2023. I'm Brian McCullough today. Maybe I was wrong. Maybe Apple does want to get serious about gaming on the Mac after all. Maybe I was right. Sequoia splitting in three is about China. After all, Samsung is holding an event at home for the first time in forever, and Matt Levine answers my questions about what now for Coinbase. Back to just trading Bitcoin and Ether. Here's what you missed today in the world of tech. A couple of big Apple changes have been revealed as WWDC continues. this week. Remember my snark during the keynote about Apple never really taking gaming on the Mac seriously? Well, Apple has released a game porting toolkit based on open source platform Wine to translate

DirectX12 into Metal 3, a potentially massive step for Mac gaming, quoting friend of the show Christina Warren on Twitter. Apple added DX12 support to MacOS and Apple Silicon via its gaming portal toolkit. It's basically a 20K patch to wine that will make it easy to play AAA Windows games on MacOS without using a virtual machine. This is essentially Proton, Valve's wine thing for Linux and SteamOS and DX12, but for MacOS. This is massive, end quote. Quoting from 9 to 5 Mac. One of the new features in MacOS Sonoma is game mode, which Apple claims improves gaming performance on Apple Silicon Macs, but there's something else Apple has been doing to turn the Mac into a gaming platform, and that includes allowing developers to easily port Windows games to the Mac with

a new game porting tool. Running Windows games on MacOS is not exactly a new thing. There are platforms like Wine and crossover that translate APIs from Microsoft's operating system so that Mac computers can run Windows software. With MacOS Sonoma, Apple is implementing similar solutions directly into the system, so it will be even easier for developers to bring their PC games to the Mac. The company has released a new game porting tool, which will help developers run their games on the Mac with little or no effort. Interestingly, Apple's game porting tool is based on Wine, a popular open source platform that translates Windows software to Unix environments such as MacOS and Linux. But Apple is doing more than just making these

games run on MacOS, as explained by the company. Game porting tool is also able to translate DirectX12 into Metal 3. For those on familiar, DirectX is an API available on Windows and Xbox consoles that handles graphics rendering and game sounds similar to Apple's Metal API. Some games can run fine without a single change in the code. Apple use the medium as an example. However, the company notes that the native MacOS version of the game runs even better with almost double the frame rate on the same hardware. And that's why Apple encourages developers to do more than just run translated versions of

their Windows games. After using game porting tool to test a Windows game on MacOS, developers can use new tools to convert to. direct-ex graphics to metal. As a result, the game can run natively with much better performance. The macOS Sonoma SDK also helps developers take advantage of other native system features, such as support for game controllers, spatial audio, and HDR video. In addition to the game porting tool, developers can take advantage of game mode, which is built into MacOS Sonoma. According to Apple, when game mode is active, the system prioritizes the gaming experience for the foregrounded

game. The Mac has never been known for being a gaming platform, but Apple wants to change that. with Apple's silicon chips, Macs have more power than ever. Apple is trying to show developers that their games are worth bringing to MacOS. And of course, this will end up adding great value to the platform, end quote. Eating my words then. This isn't quite as big news as that, but also interesting, Apple has made iOS 17, iPadOS 17, WatchOS 10, and MacOS Sonoma developer betas free for anyone with an Apple ID, not just users with that $99 per year developer account, quoting 9 to 5 Mac. Earlier today, I noted that many users were seeing the option to install the iOS 17 developer beta despite not having a developer account. It seemed like it was a bug with the iOS 17 beta

rollout, but as it turns out, it's intentional. Spotted by I Software Updates, Apple has officially announced the change on its developer website that compares the new free and paid membership options. While the betas are available without paying the $99, Apple notes, you still must sign up and register as a developer. Quote, you can learn how to develop apps for Apple platforms for free without enrolling. With just an Apple ID, you can access Xcode, software downloads, documentation, sample code, forums, and feedback assistant,

as well as test your apps on devices. If you don't already have an Apple ID, you can create a new one now. To distribute apps, join the Apple Developer Program, end quote. That makes sense why the iOS 17 Developer Beta is showing up for all users under Settings, General, and then Software Update. end quote. And someone agrees with some of my snark from yesterday's show. This article from Bloomberg echoes my assertion that Sequoias recently announced plans to split into three separate firms highlights the impact of rising U.S.-China tensions and efforts by Silicon Valley to create

distance from China. Quote, the move is seen by many in D.C. as a win for the Biden administration, yet it won't unwind a history of lucrative investments at the firm and many of the institutions that backs Sequoia, including investors like the University of Michigan and the University of California, still have money invested in Sequoia China, as do some U.S. partners. Sequoia China's investments have been the subject of criticism inside the normally clubby world of technology investing, and the firm is facing a looming executive order from the Biden White House that could curtail U.S. investments into foreign entities. The measure targets the practices that helped Sequoia generate billions and profits overseas

for more than 15 years, despite recent market tumult. The split, quote, clearly demonstrates extraordinary sensitivity to the risks to being so closely connected with China, said Jeffrey Fieldler, a former commissioner at the U.S. China Economic and Security Review Commission. Fieldler predicts that more investors who back VC and private equity firms will be asking Sequoia is nervous. Are you guys nervous? The government's growing unease about U.S. investors putting money into China has taken

the form of a planned executive order. The latest version of the order expected later this year would require VCs to report investments in potentially sensitive Chinese technologies and could restrict their ability to make some bets, according to people with knowledge of the plans. The rule is aimed at curbing the transfer of knowledge between U.S. investors and up-and-coming Chinese companies. That's a valuable service Sequoia has provided in the past. U.S. partners have helped Chinese portfolio companies by sharing their elite network of contacts and providing timely introductions to potential customers, employees, and investors, according to a person familiar with the matter. While the split is

a shift for Sequoia, the change comes at a time when startups in China have less allure than they used to. Since the boom years, when Sequoia first started investing in the country, Beijing has cracked down on high-flying tech companies, taking particular action against Alibaba, whose chief executive officer had criticized the government. At the same time, U.S. tech leaders, including billionaire Peter Thiel, have ratcheted up their criticism of Sequoia and other firms for helping Chinese companies in sectors like artificial intelligence thought to be a threat to U.S. national security, end quote. The article goes into great detail on Sequoia's history of investing in China, so it's well worth a read.

Quickly noting that Samsung plans to hold its next unpacked event in late July, in Seoul, South Korea, the first time it has held this event in its home country where it will unveil the next generation of foldables, quoting 9 to 5 Google. This follows years of Samsung hosting its launch events in cities across North America and Europe, with its most common choices being San Francisco and New York City. Of course, the expectation for the event is a new round of foldables, the Galaxy Z Fold 5 and Flip 5. Samsung doesn't directly say as much, but mentions that the quote, next generation of its foldable series offering enhanced devices based on years of R&D and investment,

end quote. Beyond the fold and flip, the event is also expected to bring the Galaxy Tab S9, Galaxy Watch 6, and both new earbuds and a new smart tracker. Samsung says the event will take place in late July, with previous rumors pointing to July 26, end quote. Finally today, as ever, Matt Levine to the rescue. His latest newsletter takes a look at the similarities and differences between the SEC's recent lawsuits against Coinbase and Finance, making the assertion that the SEC now essentially views every crypto exchange in the U.S. as, by default, illegal. Quote, a decent rule of thumb I wrote in March is that all cryptocurrency exchanges are doing crimes, and if you're lucky, your exchange is doing only processed crimes. Like, is your exchange operating in illegal securities exchange in the U.S.?

Yes, yes, it is. The view of the U.S. Securities and Exchange Commission, at least, is that every crypto exchange in the U.S. is illegal. You might disagree. Plenty of crypto exchange executives disagree, and we will talk more about the arguments below. But realistically, if you are trading crypto, you simply cannot be too squeamish about strict adherence to U.S. securities law. Or is your exchange stealing all of its customers' money? It might be, some are, others are not. This is the one you should mostly care about if you are a customer. These things are not especially correlated because, again, every crypto exchange is violating U.S. securities law. ooh, I shouldn't trust my money to these guys because they're violating U.S. securities laws.

Yeah, sure, a reasonable position that would save you from a lot of crypto disasters, but also one that would prevent you from trading crypto entirely, your choice. I am overstating all of this, but not by much, man, not by much. There are basically two ways for a crypto exchange to get in trouble with the SEC. The good way is that you get in trouble for running in illegal securities exchange. In April, the SEC sued Bitrex for allegedly operating in illegal securities exchange. Any reasonable reading of the Bitrex case made it clear that similar cases were coming against Coinbase and Binance. Just being a crypto exchange in the U.S. is in the SEC's eyes illegal.

The bad way is that you get in trouble for stealing all the money. Last December, the SEC sued FTX Trading Limited, a big crypto exchange. Here is the SEC's complaint against FTX. I am absolutely certain that the SEC thinks that FTX operated an illegal securities exchange in the U.S., but that does not even come up in the complaint. There is too much else going on. FTX allegedly stole all the money. When an exchange steals all the money, the SEC focuses on that. When it doesn't steal all the money, the SEC focuses on the illegal securities exchange stuff. And so one question about this week's cases is, is the SEC suing Coinbase and Binance for being crypto exchanges or for being bad crypto exchanges? Is the claim here you let people trade crypto, which we think is illegal,

or is it you let people trade crypto and steal their money? With Coinbase, I think the answer is obvious. Coinbase is, as crypto exchanges go, quite law-abiding. It is a U.S. public company, incorporated in Delaware, listed on the NASDAQ. It went public in a direct listing in 2021, filing extensive disclosures with the SEC. Its financial statements are audited by reputable firms. Its business model seems to consist of taking money from customers, using the money to buy crypto and keeping the crypto somewhere safe with the customer's names on it. I hesitate to make any bold claims about crypto actors, and I have been wrong before, but it is my impression that Coinbase does not steal the money. With Binance, the answer is more interesting. Binance is,

as crypto exchanges go, sort of an average amount of law abiding. It is notoriously opaque, headquartered nowhere, a web of confusing entities designed to avoid regulations. The SEC quotes its chief compliance officer saying in 2018, we do not want Binance.com to be regulated ever. Like FDX, it has its own token called BNB. It has its own affiliated trading firms. It has separate platforms for U.S. customers and for the rest of the world. It was sued by the the U.S. Commodity Futures Trading Commission in March mostly for letting big U.S. customers high-frequency marketmakers like Jane Street and Tower Research trade on its Binance.com exchange through their offshore affiliates, though there are not zero mentions of terrorist

financing in the CFTC complaint. And similarly, the SEC's complaint against Binance includes some claims that Binance was doing bad stuff. Binance has some affiliated market makers, firms including Sigma Chain AG and Merit Peak Limited, that are allegedly controlled by CZ that traded on Binance.com and Binance.us. SEC hints that they got up to shady stuff. But the SEC does not dwell much on those claims. And for the most part, Binance's complaint is the same as the Coinbase complaint. Binance is accused of operating a crypto exchange that was open to U.S. customers and that listed crypto tokens that are securities without registering as a U.S. securities exchange.

I am tempted to read yesterday's lawsuit as a kind of endorsement of Binance by the SEC. The SEC and before at the CFTC investigated Binance carefully and wrote a 136-page complaint about every bad thing it could find, and all it could find is that Binance is running a crypto exchange, end quote. He then goes on to describe how Coinbase has basically always bent over backwards to try to operate a crypto exchange within the law, has been begging to be told how to do so, while Binance has allegedly been playing a shell game with regulators, knowingly, always trying to avoid regulation, quoting again. This might work out well for Coinbase. It might be able to go to court and portray itself as a good actor who tried to follow the law, while Binance looks like a bad

actor who tried to ignore the law, Coinbase might win against the SEC and Binance might lose, but I have to say that so far, Binance's approach seems smarter. Binance noticed that it's illegal to run a crypto exchange in the U.S. and did it anyway, but minimized and compartmentalized its U.S. exposure. It has relatively few U.S. customers and seems to keep most of its business out of the U.S. Coinbase went all in on the possibility of running a legal and regulatory-compliant crypto exchange in the U.S. And now the SEC has said that that's impossible. If the SEC is right, what is left for Coinbase? I don't know. Conceptually, there are several possible outcomes here. Number one, the SEC wins and crypto is more or less banned in the U.S. You can still buy Bitcoin

and probably Ethereum and maybe Dogecoin in the U.S. because those are not securities. But any other crypto project is probably a security and not going to be offered for trading in the U.S. Crypto withers and dies and everyone moves on to artificial intelligence. The SEC kills crypto as a sort of slow burn revenge for crypto's attempt to arbitrage around the SEC. Then there's option number two. Same, except that crypto develops and flourishes elsewhere and the U.S. simply misses it. Crypto turns out to be extremely world-changing and valuable and the U.S. is left behind. Or it turns out to be a weird niche financial product. You can trade in Europe, but not in the U.S., like binary options or contracts for differences. Either way, it lives on abroad, but not in the U.S. Option three. The SEC wins, and then somebody, some combination of existing crypto firms, new crypto entrance, and legacy financial services firms, finds a path forward for crypto to be traded in the U.S. in compliance with U.S. securities laws. Everyone buckles down and says, okay, Solana is going to start filing annual reports with audited financial statements, and people will start crypto exchanges that register with the SEC and that are separate

from the clearinghouses and brokerages, etc. This seems very hard because the SEC is quite clearly not interested in accommodating any crypto projects. I'm not going to sit here and tell you, here's how crypto firms can register their tokens as securities. Certainly, Coinbase has been trying forever to figure out how to do it. They have pestered the SEC for rules allowing it, etc. With so far not much luck, but I suppose it's always possible. Option number four, the SEC loses. The courts say, what? No, none of this stuff is a security, and the crypto continues to trade in the U.S. without much security regulation. Number five, Congress or a future SEC, steps in to change the rules saying, well, sure, all this stuff is technically illegal under existing

law, but it is crazy to stifle innovation like this, so we will make new rules to allow for regulated trading of crypto in the U.S. I don't know which outcome I would bet on. The last outcome is the one that crypto industry wants, and there does seem to be some appetite in Congress to write crypto rules, but I do want to say that the SEC is clearly betting on the first outcome. That is why it is bringing these cases now, after the collapse of FTX, and so many other big crypto firms, after crypto prices have fallen, after the venture capitalists have moved on to AI. These cases against Binance and Coinbase are high-risk cases for the SEC. Coinbase and Binance are big, well-funded companies with good lawyers and lobbyists.

They have the resources and motivation to fight these cases to the end, and they do have decent legal arguments. The SEC might lose, but it is being strategic about maximizing its chances. I wrote in February, when crypto is popular and exciting and going up, if you are a regulator who who says, no, we must stop this. You look like a killjoy. Investors want to put their money into stuff that is going up, and they are mad at you for stopping them. Politicians like the stuff that is going up and hold hearings about how you're stifling innovation. Crypto founders are rich and popular and criticize you on Twitter and get lots of likes and retweets. Your own regulatory employees who have an eye on their next private sector jobs want to be leaders in

crypto innovation rather than just banning everything. But when crypto is going down and so many projects are evaporating and fraud in bankruptcy, you can kind of say, I told you so. There is just a lot more appetite to regulate, or I guess just shut everything down. You're stifling innovation. The indicted founder of a bankrupt crypto firm can say, but nobody cares. That is the bet the SEC is making. Now we'll see if it's right, end quote. So several listeners pointed out yesterday was June 6th, but for whatever reason I said it was June 9th at the top of the show. So, After being alerted to this, I began to think, why did that happen? Did I have, I don't know, longitudinal dyslexia?

Did I flip the six and the nine? But then that made me think that Friday is June 9th. 6.9. Get it, 69. Noice. Which then made me think, if we have May the 4th as Star Wars Day, because you can say, may the 4th be with you all day? What if we made June 9th have a nois day, day?

or officially the nice day, because all day long you could go up to people and be like, have a nice day. So I share this vaguely Elon Musk-level dad joke, not to try to make a funny, but just to share how my brain works sometimes. I have these thought chains that go down several steps, like multiple steps, but happen all in a millisecond. That entire thought chain happened all at once, and I had no control over it. Sometimes these thought chains lead down good paths to good ideas, and other times they lead to thoughts like, June 9th should be have a nois day, day.

It's like I told Brady Dale about writing my book, when I would plot out chapters to go in one direction, but in the writing it went in an entirely different direction. Who's in charge? Who's doing the thinking? Me or my brain? And if I'm not my brain, who is my brain and who is me, and which one of us had the have a nois day thought and which one of us is embarrassed to have had, that. thought, I don't know. Talk to you tomorrow.