NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Microsoft’s Massive Xbox Downsizing Signals the Brutal Reality of the AI Revolution

We’re beginning to see the secondary and other follow-on impacts of AI.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @TULLMAN

Jul 14, 2026

 

Sony’s PlayStation has been the global market leader for years, while Microsoft’s Xbox has been a distant second even after failed attempts by Microsoft to make its games a visible presence in the desktop world, where it clearly dominates the office installed base worldwide. Both Sony and Microsoft missed the migration of gamers to small mobile devices, where Nintendo prospered for a while—even before the phone revolution completely changed the video gaming space.

Now, we’re in the early innings of another sea change where the major tech players in the gaming industry are realizing that they no longer need armies of programmers, designers and developers to build and deliver the next generation of games. This is due to AI, of course, but also because the new games—mainly mobile—will be so lightweight and rapid as a result of the AI enhancements that there will be no need for any kind of bulky and costly game boxes or platform devices. Finally, as is the case across dozens of industries these days, the cost of the chips used in these boxes has been driven skyward by the adjacent and competitive demands of the AI companies for product that has cut into margins and may ultimately result in price increases at the worst possible time.

The latest salvo in this latest war of enforced attrition was last week’s announcement that Microsoft was making major changes in the Xbox video game business which entailed specifically cutting the Xbox workforce by 20 percent—about 1,600 employees now and another 1,200 plus over the next year. More importantly, the company is largely exiting the studio space, where it spent billions on expensive acquisitions not too many years ago.

The personnel growth in the MSFT games division was massive while the overall demand, player base and playtime all decreased substantially. It turns out—as with many other pre-phone and streaming activities—that millions of gamers would rather watch the play of truly talented players on YouTube than be second-rate participants in multiplayer competitions or simply play older games at home by themselves.

As far as the various studios are concerned, a few big ones like Activision Blizzard will shrink but remain, some others will simply be shut down, some are being encouraged to spin off and go off on their own with temporary support and assistance from Microsoft, and a few will remain until they too can be responsibly booted one way or another or quietly sold off to other buyers who right now seem to be few and far between.

But the most important takeaway from this highly visible and intentional effort at downsizing one lagging division to help offset enormous commitments and investments elsewhere in the enterprise—particularly in AI capabilities—is that we’re beginning to see the secondary and other follow-on impacts of the AI revolution. Thousands of Microsoft employees didn’t just lose their jobs because the AI tools could build new games, faster, cheaper and even more compelling than the former workers, they were also directly dismissed because the sales, marketing, manufacturing and promotion efforts of the entire video game division were shrinking and Xboxes were losing share and playtime as the gamers went elsewhere and the old boxes lost their sway and value.

This is only a single example, but I fully expect that we’re about to see many other industries rapidly roiled by similar advancements in process and speed or response time which will permit—in the name of speed, efficiency and massive cost savings, the wholesale elimination of entire groups and departments in businesses which will simply no longer be necessary because all of their functions in the value-creation chain will be substituted for with new AI-infused technologies. I’ll be writing shortly about a staggering combination in the advertising industry that brings together two powerful technologies and will completely upset and reorganize the ad creation business into a faster and cheaper system, which will also create more engaging and effective products.

It’s clear that a new form of M&A is already actively helping to connect and combine disparate companies with tools and services that are addressing common overarching problems in industries like advertising, and it’s also clear that these individual companies aren’t likely to build end-to-end systems by themselves in a timely fashion whether through lack of capacity or all the necessary resources or because they have been so deeply focused on solving their segment of the overall solution that they didn’t realize that a better and more robust and compelling solution could be offered by combining multiple offerings into a single comprehensive process.

 

Why Getting an AI ‘Selfie’ Is the Smartest Move You Can Make Right Now (Before Everyone Else Does)

 

Why Getting an AI ‘Selfie’ Is the Smartest Move You Can Make Right Now (Before Everyone Else Does)

Mark Zuckerberg said ‘Nothing is the future forever.’ This new tech trend is proving him right.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @TULLMAN

Jun 1, 2026

 

Those of us who remember the 70s may recall the famous quote from Jon Landau that appeared in Boston’s The Real Paper about Bruce Springsteen. In May of 1974, after watching a show where Bruce opened for Bonnie Raitt at the Harvard Square Theater, Landau wrote “I saw rock and roll future and its name is Bruce Springsteen.” Apart from his grammar, which left a bit to be desired, he was—as we used to say back then—“Right on.” Jon jumped right on the Bruce train and a couple of years thereafter became his lifelong manager. Right place, right time.

I realize that our culture today is overly obsessed with the constant search for the next new thing and that, as Mark Zuckerberg, the founder and CEO of Meta (formerly Facebook), is fond of saying, nothing is the future forever. But there are in fact moments when you do see and feel something that makes you wonder if, in fact, the Earth hadn’t just moved for a moment and in that instant changed the future forever. It seems to me that we might just be on the cusp of seeing the next new thing and that nobody who’s anybody is going to want to miss the chance to get in on the ground floor while the gettin’ s still good. FOMO is a very powerful force, and no one wants to miss the moment or be left behind. Plus, if you don’t get yours while it’s available, it may soon be gone.

Of course, timing is everything, and the conditions and the context have to be just right to trigger a substantial shift in the way that the world does things. Sad to say, for all of Zuck’s grand schemes and dreams, Meta is very old news for the kids and, as Yogi Berra once said: “the place is so busy that no one goes there anymore.” Snap might be a resurrected distant second and X is always going to be a cross between a toilet and a sewer where it’s all about enragement rather than engagement. All the other players aren’t even also-rans, they’re “whatever became of” has beens.

For the next couple of generations, the only social channels that matter are Instagram, Tik-Tok and maybe YouTube. These are the most powerful communication tools that we have today for our youth, but—given the enormous volume of activity and the number of participants—they’re largely overwhelming, even for the most active posters and, as a result, they’re rapidly becoming a second day job that no one wants.

The truth is that even the most dedicated and well-intentioned creators on any of these platforms couldn’t possibly read, much less personally respond to, the zillions of posts that they receive constantly. The bad news is that, increasingly, even the most ardent fans are starting to notice. Fans are fickle and flighty and loyalty today only means that they haven’t seen anything better yet. Every entrepreneur’s job is exactly the same—find the next wave, race to the front, ride it for all it’s worth, and then move on before the inevitable crash.

Perhaps more important is the fact that these days, the true qualitative metrics of value and longevity aren’t about gross numbers, fans, followers or traffic volume. They’re about the artist’s ability to create and manage authentic and intentional sharing that drives caring and connection. As I wrote recently, the smart players want to own their own platforms and their content, connect and transact directly with their fans, ditch the gatekeepers, and cut out all the other layers and intermediaries that get in the way of direct and “personal” communication. For sure, this desire is based in no small part on economics, but it’s also about emotion.

Our early social technologies helped to manufacture thinly-related “friends” and the artificial impression of intimacy, but any real communicator, performer or other talent would tell you that mass means nothing and that meaning means everything. They’d all rather have a smaller collection of real and sincere fans than millions of nobodies that they’ll never meet. Those are the kinds of relationships that are still manageable and which pay off in multiple ways. And they provide demonstrable psychic benefits to the performers and help avoid burning out.

It turns out that an essential part of any artist’s preserving their own talent and humanity is their feeling and ability to believe and demonstrate that they’re not simply talented robots on the stage replicating the same performances night after night, albeit all over the world, but instead that they’re caring and committed professionals with the time, talent and artistry to do and share what they love doing. The last thing they want is to be chained to a desk or a phone feeding the social media beast all day long instead of doing what they wanted to do all along. It could be singing, dancing, teaching, or painting, but, for sure, they didn’t sign up to be posting all day.

So, the challenge for all these artists and performers is how do you create and deliver these kinds of experiences and connections at scale. The fact is that we’re all stretched and pulled in many directions all day long and, in addition to being weary and close to shutting down, if an artist is honest with himself or herself, they’re likely to acknowledge that sometimes they feel that they’re doing a halfway job and not delivering what was promised to their fans and followers. It’s far too easy to get spread a mile wide and an inch deep and disappoint everyone including yourself.

That’s why I think that, for anyone with an active and expanding social audience, getting yourself a Selfie—a digital twin that you can build in minutes—is the smartest thing you can do right now. I think of this as an investment in the future rather than in the present, and if you don’t start taking steps to invest in the future, it’s highly likely that you won’t have one.

And honestly, since we haven’t figured out how to physically clone ourselves, it’s pretty clear to me that soon everyone will have a personal digital twin like Selfie to write, post, comment and respond for them automatically and on a 24/7 basis in a manner that accurately reflects their intelligence, use of language and slang, writing style and conversational phrasing. I’m not talking about some business bot or shopping widget—that’s boring, already overdone, and mostly disappointing.  

I’m talking about a highly personal and social online twin (what better name for it than Selfie) that—solely on demand—automatically ingests all your social feeds, all your photos and videos, and anything and everything else that you supply it and builds a “brain” that thinks like you, writes like you, reflects your typical style and tone, and can answer questions from your fans, followers, family, friends or anyone else based on everything that it knows about you and on nothing else. No hallucinations, no out-to-lunch responses, and polite enough to say from time to time that it simply doesn’t know.  

You are always totally in control of your Selfie and can edit anything it writes, improve or add to its suggestions and responses, and/or decide to simply trash any post or comment or answer that it makes for you. Your Selfie gets smarter all the time based on your actions and also by virtue of additional information and material that you add to its content base over time. Plus, it regularly polls all your authorized social feeds and adds all your activity in those channels into its knowledge base as well.

Bottom line: nothing in our lives is a scarcer resource than our time. Agents are already all over the business world, for better or worse, but the Selfie is the first substantial attempt to create a personal agent/digital twin that fully and fairly represents you in social interactions at scale without taking more than five minutes to launch a Selfie and without spending more than an hour or two adding content to really make it your own. It’s easy to predict what the future will eventually look like; it’s just hard to determine when it will be here. But the Selfie is here—up and running today—and just waiting for you to get yours before someone else does.

HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO DISCUSS HIS INC. MAGAZINE COLUMN ON EBAY

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NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Learn How to Be a Better Reader 

The major newspapers have failed in their mission. We need a new format that does everything they once did–curate, inform, educate–without the baggage.

 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

APR 1, 2025

The major newspapers simply aren’t getting the job done any longer. Apart from the fact that the printed paper is outdated before the press run is even finished, they aren’t telling us what we actually need to know in an effective manner. Smaller local papers continue to disappear, and the three leading national papers cower, cave and collaborate with the demands of the Orange Monster and their own corporate masters – joined these past few weeks by several of the largest law firms and major universities.

We are largely left to our own devices to find alternative sources of substantive news, serious thought, and opposition to the onrushing autocracy.

Newspapers today – even with unlimited online space – are opting for fluff, filler, and a lot of nice-to-know nonsense instead of substantive coverage of pressing national affairs. Many local papers are now dropping editorial pages entirely. And, as they shrink in size and shirk their obligations, they look like unfortunate jugglers trying to catch the wrong end of a bunch of plummeting knives – painful, pathetic, and painted red with the blood, sweat and tears of departed staffers.

The most immediate result of layoffs, buyouts, and bizarre dictates by billionaire owners like Patrick Soon-Shiong of the Los Angeles Times and Jeff Bezos of the Washington Post is the continued flight of major talent. Readership is disappearing, too.  Many of the best writers, editors, and reporters have abandoned the major rags to set out on their own to tell their stories and honor their callings through social media, YouTube videos, podcasts and new digital forums. But it’s an enormously difficult task to find an audience and make a living while you’re at it.

The Best Journalists Are Leaving Newspapers Behind 

Online digital channels like Substack, which provide a forum for opinions, reports and longer articles, are the prime beneficiaries of the writers’ exodus, for example, Jennifer Rubin of the Post. I also like Joyce Vance, Heather Cox Richardson, Shelly Palmer, Charlie Sykes, and Frank Bruni. Other new services like Bluesky and Threads — which unfortunately followed the constricted Twitter model best suited to short slander, right-wing hate, and trolling — haven’t really offered much of a viable alternative, despite building substantial audiences.

You can’t really say much of value if your message needs to be truncated into a dozen little squibs. And literally millions of new users signed up for these services without a clue as to what they were likely to find, or which other users and contributors might be on any given channel.

But these new forums, channels and writers face a much bigger obstacle that is likely to financially doom many new authors seeking a viable audience. What you say or how well you’ve said it doesn’t matter if (a) no one can find your work and (b) if, as a result, no one is reading or listening to it. Even if you think you know what you’re looking for, without a specific name in mind, there’s virtually no way to find anything of value among the thousands of returns that a typical Google search might generate. There are no editors, curators or guideposts to manage the constant stream of new material.

How Substack Hurts Its Own Users

Substack makes life even more challenging for its authors to build a sustainable audience by the utterly stupid step of automatically unsubscribing anyone suspected of forwarding a post to a mailing list. In other words, while their own offers litter every column with pitches to subscribe at various fee levels (including free), Substack punishes anyone for aggressively sharing a particular piece with a larger audience of potential subscribers by kicking them off the author’s page. This even includes articles which have been served for free by writers trying to get their message shared as widely as possible.

As if finding new materials and writers wasn’t tough enough, the Substack idiots penalize people for providing free marketing for their authors.

With Trump and his flunkies now threatening to effectively limit access to Social Security and privatize the United States Postal Service, online services may soon be the only effective channels that remain for most of our population. As they envision their brave new, tech-first world, the MAGAts never bother to mention the millions of older, rural and poor people, including their own supporters, who still lack access to online internet services or cellphones.

There are still important and critical nuggets of information regularly buried among the gross amount of garbage we get online. Today we all live in various degrees of fear of missing something critical from a friend, family, bank, litigant, government agency or other correspondent. And we regularly do miss messages directed to us at infrequently visited sites.

How To Be a Better Reader

Given this cluttered context, the scarcity of our time, and the fractionalizing of our attention, you need to selectively invest the energy in finding valuable new information sources, intelligent and informed writers, and news feeds that anticipate important events and prepare you to respond.  That’s in contrast to those that merely regurgitate the same tired factoids we see in dozens of different posts across the web.

You can start by finding out where some of your favorite columnists moved and follow them. But this process is too often frustrating. Medium does a decent job of collecting your interests (very generically) and then provides a long list of suggested writers who might be relevant. But it feels like a complete crapshoot, and you’re required to subscribe and pay a fee to proceed. Plus, much like those of us who presently subscribe to too many streaming services for no good reason, it quickly becomes a fairly expensive proposition to spend $50 a pop to support a dozen of the newspaper columnists you used to follow in one or two places.

Interestingly enough, this process of aggregation, validation and assembly of select writers, educators, scientists and other professionals used to be one of the primary functions of major newspapers. Your favorite paper was basically a one-stop shop, a convenient, well-organized and edited, and relatively painless delivery system especially when compared with the absolute drudgery that discovery on the web today represents. Those were the good old days.

Bottom line: we need a trusted online aggregator, or maybe a linking service more tailored than Apple News, where users can find and designate the content, authors, commentary and topics that interest them and have those delivered in a single, morning submission. Sorta like the newspaper you used to find on your doorstep.  

NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

 

Why Tech Isn't Improving Your Advertising

The algorithm may have taken over the ad buying, but there's still no telling exactly who is watching your messaging.

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1

 

Every entrepreneur will tell you that they absolutely hate to spend any of their scarce cash on advertising, for two main reasons. First, they're not sure that ads work-- there's a lot of "spray and pray" going on and not much in the way of credible measurement or tangible results. Second, they believe that their product or service is so great that people should simply be flocking to their doors to buy whatever they're selling. They think that, if you use your money to create exceptional products and services, you won't need to spend on advertising.

If only life were that fair or entrepreneurs were a little more realistic. For some businesses, advertising is the cost of being boring.  For others, it's an attempt to put lipstick on a pig. But at the end of the day, there's really not much choice. It's like dancing with a bear - you don't get to stop when you want to.

This antipathy is hardly an attitude limited to new business builders. The advertising industry has always known that, while everyone wants to make money, no one really wants to buy advertising. On its best day, advertising is a necessary evil and - much like cable television or insurance - always a grudge buy. Even worse, the advent of new technologies, which in other industries have dramatically improved transparency, productivity, and accountability, have only added more confusion, uncertainty, and imprecision to the ad game.

Advertising follows audiences, but with programmatic algorithms dictating the placement, frequency, and duration of digital ads, no one knows much of what's happening in the field. Claims about the effective addressability of digital ads are mostly optimistic fantasies clothed in the belief that the underlying tech will somehow get the job done. As John Wanamaker said long ago: "Half the money I spend on advertising is wasted; the trouble is, I don't know which half." Some things never change.

While some new companies like Dumbstruck can help advertisers determine whether the content of their ads is going to be effective, it's still anybody's guess as to whether you're getting your ads in front of the right buying audience at the right time and place. Context, given the abundant noise and clutter, is just as important as content, if not more so. Smart reach is still the name of the game and, as the migration from linear TV to digital video accelerates, determining whether ads are reaching the right folks, resonating with them, and driving purchase behavior is becoming increasingly difficult.  Average daily TV time is down from 3.5 hours a day in 2020 to less than 3 hours a day in 2023 while daily digital video viewing has grown by almost that exact amount from 2.5 hours a day to almost 3 hours a day in 2023.

As a result, linear TV ad spending has been flat to down over the last four years (stuck in the mid-$60 billions) and, even in an election year, there's not much enthusiasm for 2024. But, at least in the old days of traditional TV, you could sometimes see your ads running on the tube, while these days no one has any idea where their digital placements are showing up, what they're adjacent to, and who's seeing them. X (formerly Twitter and soon to be toast) is the most visible poster child for the risks of having no control and no say over what some algo decides to position next to your offerings. But the whole industry is now driven in large part by fraudulent next-gen click bait systems designed to attract programmatic ads.  These MFA programs have led to an environment where one in five links is to a fake site delivering made-up facts, phony health products, or pathetic financial pitches.  

That's no problem if you're targeting kids up to age 18, because since  TikTok and YouTube completely own the video market, the choices are pretty much locked in,  and frankly the advertisers focusing on these kids don't really care about quality engagement or first-party data. It's all about tonnage. TikTok's ad business is growing about twice as fast as Meta's and almost 4x faster - year over year - than Alphabet's. And because of TikTok's delivery methodology and typical video duration,  cost-per-view to advertisers is a fraction of what they have been paying for decades in more traditional channels.

But for mature and serious businesses seeking to actually connect to real human beings who are interested in learning about and ultimately purchasing their products and services, the problem is much more complex and challenging. TikTok isn't going to get the job done, but new ancillary networks are being built which make much more sense for serious advertisers. The most attractive of these are the retail media networks being developed by merchants like Walgreens, Kroger-Albertsons, and Walmart. They have extensive first-party data about their customers, strong and recurrent connections to them, and relatively high-quality engagement. But they lack the massive scale of players like Netflix. However, in combination, they can provide a solution which also offers levels of addressability, measurement and accountability that the digital vendors can't yet duplicate or effectively compete with.

The bottom line is pretty simple. As attractive and rapid as the newest delivery and tracking ad technologies may seem, as the ad buyer you're being asked to put far too much trust and money in "take my word for it" systems where the results are machine-driven and fundamentally unmeasurable. A much better bet is to take a step back and use channels and vendors whose methodology and mechanics are clear, understandable and auditable in more concrete and convincing ways.

TRIBECA FLASHPOINT ACADEMY HOSTS ALUMNI DINNER & EMPLOYERS - GOOGLE/YOUTUBE,TOWERS PRODUCTIONS,GROUPON & NOKIA/NAVTEQ