Unity’s annual game industry report highlights the unprecedented effects of the pandemic.
The report underlines just how drastic the effects of COVID-19 have been on the game industry.
The video game industry has been forever changed by the pandemic, and it’s now on track to more than double in size by revenue over the next give years, according to a new report from game development toolmaker Unity.
Unity on Wednesday published its annual game industry trend report highlighting six major shifts in how games are being played and how developers are creating and monetizing them. One standout figure is Unity’s estimate that the game industry will grow to more than $300 billion over the next five years, thanks to pandemic-induced accelerations in the number of people who play games, the number of games that are made and the amount of money spent on both new titles and existing live service games.
The report, which draws on data from the roughly 230,000 developers who use Unity’s game engine and other tools, underlines just how drastic the effects of COVID-19 have been on the game industry, which saw an explosive 2020 and steady growth all last year as people stayed indoors and spent more of their income on at-home entertainment.
Though the rate of growth the industry saw in the first year of the pandemic slowed in 2021, Unity said global game industry revenues still grew annually by 30% last year. Daily active users on PC and console are up 62% and up 74% on mobile since the beginning of 2019.
Much of the growth is happening on mobile, the report said. The number of games being developed across categories ranging from hypercasual to large, console blockbusters is increasing alongside the total number of developers, with a huge influx of new games in the hypercasual category on mobile.
«Publishers on the Unity platform built 93% more games in 2021 than in 2020 – that’s almost twice as many games as the year before,» the report said. «What’s more, there are more creators using the Unity platform to build games than ever before. In 2021, the number of Unity creators increased 31% compared to 2020.»
Unity’s report also highlighted the growth and importance of cross-platform and live service gaming, two trends the company said will become huge pillars of both how games are created and what titles maintain popularity and financial success well into the future.
«If a game can follow a player from their home console to their mobile phone or tablet, it cuts down the chance that they’ll switch to another game when they change devices,» the report said. «It also improves the player experience, making it easy for players to access their save files, in-game purchases, and content anywhere.» Unity spotlighted Genshin Impact, a game that’s available across Android phones, iPhones and iPads, PlayStation consoles, and PC; it made $2 billion in revenue in its first year since launching in September 2020. The company said it «expects this feature to become standard throughout the industry» down the line.
Unity also said modern games are now less like complete and standalone pieces of content, like a book, and now more like television shows. «In particular, live games have demonstrated their popularity with gamers, who now expect games to have regular content updates – new challenges, modes, maps, cosmetics, character options, and storylines. Many of the most popular games today are built as services, including Genshin Impact, Apex [Legends], and League of Legends,» the report said.
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Nick Statt is Protocol’s video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
Amid the Ukraine conflict, AI-based data analytics are helping navigate the choppy waters created by sanctions against vessels, businesses and people associated with Russia.
Quantexa, Windward and Skytek use AI-based data analytics to monitor exposure to risks posed by sanctioned entities — whether it be to guard against financial fraud or maritime risks such as illegal cargo or flag-hopping.
Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of «Campaign ’08: A Turning Point for Digital Media,» a book about how the 2008 presidential campaigns used digital media and data.
Yasa Jupiter and Namura Queen were stranded.
When the bulk carrier ships were hit by missiles while anchored at ports off the coast of Ukraine in late February, their crew weren’t the only ones at risk. So too were the ship owners, cargo underwriters, banks, energy companies and others involved in the complex web of businesses expecting the vessels to make their coal and wheat shipments.
But it isn’t just the threat of Russian missiles that has disrupted the supply chain flow in the Black Sea region. It’s the choppy waters created by sanctions against vessels, businesses and people associated with Russia. The conflict in Ukraine is putting a searchlight on technologies from companies including Quantexa, Windward and Skytek, which use AI-based data analytics to monitor exposure to risks posed by sanctioned entities — whether it be to guard against financial fraud such as money laundering or maritime risks such as illegal cargo or flag-hopping.
Damage to the two cargo ships — each of them valued at close to $30 million, according to sanctions compliance assessment software vendor Skytek — was minor, though one crew member on the Namura Queen sustained non-life-threatening injuries. When they were struck, the ships were among 120 cargo vessels moored at Ukrainian ports, just before Ukraine’s military suspended commercial shipping at its ports following the initial invasion by Russian forces into that country.
The data is just a sampling of the sort of information available through software from Skytek, which uses machine learning and data analytics to evaluate current and historical voyage patterns and alert customers when suspicious activities such as evasion tactics occur in sanctioned maritime zones.
When President Joe Biden announced a new round of sanctions targeting 400 people and entities affiliated with the Russian government during a Thursday press conference, a reporter asked if he believed the actions would have an impact on making Russia change course in Ukraine. A frustrated Biden responded, “You’re playing a game with me.” Just before, he remarked, “I did not say that, in fact, the sanctions would deter [Russian President Vladimir Putin]. Sanctions never deter.”
Whether or not they are directly deterring Putin from continuing Russia’s attacks on Ukraine, data from Windward — another company providing AI-based analytics software to assess maritime risk — showed that regulatory or “moral” sanctions appear to be having some effect.
“The Western market has been shutting off completely any work with anybody related to Russia,” said Ami Daniel, co-founder and CEO of Windward. That means that when it comes to companies or ships that are connected in some way to Russia, “A lot of the people won’t even touch you with a stick right now.”
Right now, Windward’s customers are conducting queries in its software platform to help inform how they address sanctions against Russian entities. “We have a German customer which is super risk averse and doesn’t want to do any business with anybody who’s ever been near one of these places in the last 24 months,” Daniel said.
Lloyd’s List Intelligence also offers data and AI-based analytics tools to monitor maritime risk. But unlike startup competitors, the company launched in 1734 as a printed broadsheet posting ship arrivals and departures in a London coffee house. It still maintains its media arm, which reported early this month that “Cargo underwriters are taking the decision not to cover consignments heading to Russia or Ukraine, and even nearby countries, citing reputational risks and the potential difficulties of paying out on insured claims.”
Windward’s software provides custom views of exposure to vessels connected to countries customers have particular concern about, such as Russia, Venezuela, Iran or Myanmar, over a selected time period. The company feeds satellite image and radio frequency data, weather data, ship ownership and cargo data, port data and vessel schedule data into deep-learning models tailored to a customer’s risk tolerance, then scores their level of risk associated with sanctions or other laws and regulations. As an example, the system pulls in imagery data from hundreds of satellites measuring a particular offshore area via an API every day.
Windward has published reports in recent weeks with updates related specifically to Ukraine and the Black Sea region, where intensifying attacks from Russia have led to a drastic decline in port activity around Ukraine.
But not all cargo ship activity is at a standstill. In fact, based on its analysis of its ship-tracking in the region, Windward reported on March 22 that general cargo and oil tankers calling port in Russia actually increased operations by 44% over the following week. The company pointed out an important piece of information teased out in its analysis: 60% of that increase in Russian port calls was associated with Russian-flagged vessels.
That, Daniel said, likely meant that those ships were returning home before they got stranded. “This is Russian vessels coming home, and we think it’s also because nobody would sell them marine fuel,” he said, adding, “About 50% of the marine fuel providers of bunker fuel will not provide them fuel. So they’re in a tough spot.”
Tracking sanctions-related risk on the high seas is just one area companies need to monitor, of course. Financial institutions are also using sophisticated analytics and machine-learning-based software to keep one step ahead of Russian nationals and oligarchs recently added to the U.S. Treasury Department’s sanctions list.
Entity resolution is a key component in the processes used to identify suspicious actors by companies including Windward and Quantexa, which uses network analytics to detect possible financial fraud such as money laundering. The Quantexa system automatically generates a contextual network, a graph indicating the links connecting target entities with other shell operations or shady individuals.
To isolate possible fraudsters, the financial fraud detection software ingests information from an array of sources, from SWIFT wire transfer messages and risk data from Bureau van Dijk’s Orbis and RDC Grid to less-obvious sources such as financial records data revealed through journalistic investigations of the leaked Pandora and Panama Papers.
“When you go in and look at the exposure, you see that person is not only a sanctioned individual, here’s the company that our customers have been doing business with [and] he’s 100% owner of that company,” said Clark Frogley, head of financial crime solutions at Quantexa. He continued, “But guess what? He’s also the primary shareholder of these other three companies that they’ve been doing business with or these other two customers that we weren’t even looking at.”
On the water, Windward must navigate the maritime version of oligarch shell games to resolve ship identity. According to Windward, vessels are usually associated with multiple nationalities because they are linked to several owners, each performing different functions on a single ship. Windward combines several sources of positional and vessel identifier data to detect flag-hopping, a manipulative tactic used to circumvent sanctions and fishing regulations by changing the nation where a ship is registered.
Shipping traders or legal teams at Windward’s customer companies are using its analysis to inform whether they should cancel booked shipments or other deals that might be subject to Russia-related sanctions. Contracts associated with trading plans over the next six months or more could be canceled if deemed too risky, Daniel said, adding, “Listen, force majeure. Tough luck.”
The headline on this story has been updated for clarity.
Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of «Campaign ’08: A Turning Point for Digital Media,» a book about how the 2008 presidential campaigns used digital media and data.
When Samsung acquired Whisk, a smart food AI platform, in 2019, the nimble startup realized it had to ramp up its workforce quickly. Seeking to triple its employee base, Whisk, a fully remote team, sought diverse talent from a wide variety of regions through Upwork, a work marketplace that connects businesses with independent professionals and agencies around the globe.
“With Upwork, we got access to a wider talent pool,” says Nick Holzherr, CEO of Whisk, “and we found specialized talent in food data that weren’t restricted by location.”
Whisk isn’t alone in unlocking the global marketplace to find the right types of employees to support its business goals. More than three-quarters of U.S. companies have used remote freelancers, according to research from Upwork, and more than a quarter of businesses plan to go fully remote in the next five years.
The pandemic seems to be the obvious instigator of the remote work boom, but February 2022 research from the Pew Research Center notes how U.S. workers are opting to work from home as a matter of choice rather than necessity: “Among those who have a workplace outside of their home, 61% say they are choosing not to go into their workplace, while 38% say they’re working from home because their workplace is closed or unavailable to them,” the Pew study writes. “Earlier in the pandemic, just the opposite was true: 64% said they were working from home because their office was closed, and 36% said they were choosing to work from home,” it went on to say.
That hard lean into remote-powered and freelance work models is a natural progression companies such as Upwork have been tracking over the past decade. “We’ve seen how project managers got innovative in a tight labor market and already adopted remote freelancing long before the pandemic,” says Tim Sanders, VP of Client Strategy at Upwork. “And then we all learned since March 2020 how companies should lead based on outcome rather than based on employee attendance – a longstanding mindset of ‘management by walking around’. Managers have been focused less on aptitude and more on demonstrable skills, and that change in management style has made taking a look at on demand remote talent solutions a no-brainer.”
In fact, Upwork’s enterprise clients mirror the talent joining its work marketplace ? each requires new methods to engage in deeply collaborative relationships that transcend location, and defy outdated definitions and boundaries traditionally separating freelance and full-time work and workers.
Pointing to Upwork being one of the largest work marketplaces in the world with more than “10,000 skills available on the platform,” Sanders says their enterprise solution set “offers a great governance solution as budgets can be managed effectively and procurement can be handled, all within a centralized view.”
Vetting workers efficiently is part of why businesses turn to Upwork, especially if they need to increase their talent pool quickly. For Whisk, that meant Upwork managing the key pillar of compliance under a large conglomerate like Samsung. “Upwork handled issues such as background checks and compliance with local laws, which is always critical to a company using independent talent,” says Holzherr.
Sanders credits the company for folding existing talent into its working culture, along with new workers it brought in from Upwork. He says, “They opened up the window for Upwork talent to collaborate with them, and that egalitarian style in how they work with freelancers gives them so many new ideas and allows them to recognize patterns and see blind spots they otherwise might have missed.”
Whisk hired independent workers from a range of regions, such as Serbia, Thailand and Montenegro. To cite one of many success stories, Whisk needed a food ontology expert to build a knowledge graph of foods, so it cast its net wider to look at potential team members overseas. They found a Product Development Engineer in Belgrade, Serbia, who was also seeking the right kind of freelance fit for her way of living.
Ruzica Miladinovic, senior product manager at Whisk, says, “I wanted a role that connected my unique skill set and expertise with an interesting problem and the flexibility to remotely collaborate from my home in Serbia, while having the financial freedom to spend more time with friends and family. Not only has Whisk been great to work with for many years, but their remote-first and output-based work model aligns with the way that I’d like to construct my ideal career and lifestyle.”
A recent Upwork blog post from Upwork’s CEO points to what’s required for enterprise clients to shift their strategies and protocols to better leverage the benefits of freelance workers: “Businesses are realizing that to attract and partner with these professionals, they need new working models ? including leadership and management skills, and cultural and behavioral norms.”
Asked to elaborate on what managers can do to finesse that transition successfully, Sanders replies, “First, organizations need to make the mental leap from talent acquisition to talent access. Leaders who think of talent as a resource that is accessed have a more open mind to flexible talent solutions. Second, leaders should treat independent workers as first-class citizens and not outsiders. That can lead to loyalty that’s needed to build a very strong virtual talent bench. And third, set up an approach to metrics to review business goals and find out how that independent talent is helping you accomplish those goals, so you can see across the company the value of your growing talent bench.”
Work innovation and the freelance revolution are upon us, and it’s up to each business to figure out if they want to ride the crest of this rising wave, or if they want to remain on familiar shores from the outside looking in.
Read more research on the shifts in work trends here.
Don’t have any plans this weekend? We’ve got you covered.
Here are our recs for the weekend.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety’s first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
Between Unity’s new tech demo, “Enemies,” and “Spider-Man: No Way Home” getting a video-on-demand release, we’re not planning on leaving the couch this weekend. In that case, might as well get comfy, lie down and spill your guts to Eliza, the therapist chatbot that was recently honored with a Peabody Award.
Didn’t catch the latest Spidey movie in theaters? Or maybe you did, but you really want to watch it again in the comfort of your own home? Now’s your chance: The movie became available on iTunes, Google Play and a bunch of other video-on-demand stores in recent days; you can buy it for $19.99.
Joseph Weizenbaum’s pioneering chatbot has fascinated, enraged and amused people for decades. Playing the role of a therapist, Eliza is both very inquisitive and obviously limited in her understanding of what we tell her. And yet, we can’t help but engage. We try to trip her up, get her to say something funny, swear at her or even confide in her. This week, Eliza was honored with a Peabody Award for Digital and Interactive Storytelling, which is as good of a reason as any to chat with her a bit. I highly recommend the online version hosted by Masswerk.at, which allows you to experience Eliza in an old-school terminal interface.
Netflix has been on a quest to become its own best media partner for quite some time. The company launched a print magazine, podcasts, newsletters and more, all doing journalism-ish things while also advertising Netflix movies and shows. The latest addition to this is the Netflix Jr. magazine, a print magazine for the preschool to early primary school crowd. Think Highlights High Five, with every page featuring characters from Netflix shows. There are puzzles, mazes, activities and even recipes (“Cocomelon” toast, anyone?). Netflix clearly isn’t trying to reinvent the wheel here, but the magazine should still be fun for little ones, especially if they’re into shows like “Ask the StoryBots” or “Ada Twist, Scientist.” A subscription to the print version of the Netflix Jr. magazine is free, and the magazine is also available as a free digital download.
Game engines have improved a lot over the years, and there’s no better way of keeping track of visual fidelity improvements than Unity’s tech demos. Its latest looks like a high-end Hollywood visual effects production, but it’s all been rendered in real time. To add to the wow factor, it’s worth reading this Twitter thread from the tech and rendering lead on Unity’s demo team, which explores all the intricacies of the short film in detail.
With the $325 million acquisition of Stitcher, SiriusXM also got its hands on the podcast network Earwolf. Insiders told The Verge that the acquisition didn’t exactly go over as expected. This story is a worthwhile read and another proof point that monetizing content with small but engaged audiences is hard.
A version of this story also appeared in today’s Entertainment newsletter; subscribe here.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety’s first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
In Staten Island, Amazon warehouse workers are voting in a union election. In Bessemer, Alabama, the NLRB is preparing to count votes for another election. Here’s everything you need to know.
Fights over unionizing Amazon warehouse workers in Bessemer, Alabama, and Staten Island, New York, are approaching the finish line.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
The fights over unionizing Amazon warehouse workers in Bessemer, Alabama, and Staten Island, New York, are both moving closer to the finish line, as Staten Island warehouse workers head to the ballot box on Friday and the National Labor Relations Board prepares to count ballots in Alabama on Monday.
No group of Amazon workers has ever successfully unionized, and the efforts to unionize in Bessemer and Staten Island are the first and second attempts, respectively, since 2014. The two attempts are not related: The Bessemer fight has been ongoing since 2020 and is led by the national Retail, Wholesale and Department Store Union, whereas the Staten Island union fight began in earnest this year and is led by a group of workers unaffiliated with any national union.
“Our employees have the choice of whether or not to join a union. They always have. As a company, we don’t think unions are the best answer for our employees,” Kelly Nantel, an Amazon spokesperson, said in a statement.
In Staten Island, the group of workers calling itself the Amazon Labor Union secured approval from the NLRB to hold a union election in two facilities, JFK8 and LDJ5. The JFK8 election begins on Friday and will last until Wednesday at the facility, after which the NLRB will begin counting the votes. The NLRB scheduled the LDJ5 election to begin about one month later, on April 25. When the election date was set for JFK8, Amazon said it was skeptical that the union had enough support to be able to legally hold the election, but, since the date was set, that it wanted “employees to have their voices heard as soon as possible.”
Bessemer workers have been voting by mail in a second union election over the last two months, and the NLRB will begin to review the mailed ballots starting Monday. The RWDSU does not expect votes to be counted until sometime around April 6. This Bessemer election is essentially a redo ordered by the NLRB after a judge threw out the results of the first election because Amazon’s interference broke the labor board’s rules.
If turnout is low, the RWDSU expects the election to be very close, though the union will have no sense of whether Amazon was successful in mobilizing enough opposition until the ballots are counted. Though the first result was thrown out, the votes went in favor of Amazon by more than a 2:1 ratio last year, and many workers still strongly oppose the union effort.
It is unlikely that there will be a clear winner named in the Bessemer election within the next two weeks, as both sides will likely contest the validity of specific votes before they are opened and counted.
“The most likely scenario is probably that there will be challenged ballots that amount to the effect of the election hinging on that. We won’t know the results necessarily. It should be really close,” Chelsea Connor, the communications director for RWDSU, told Protocol.
The RWDSU has also filed several unfair labor practice charges against Amazon during the course of this election, and the NLRB will need to rule on those charges before the result is final. This month’s “rerun” election was called by the NLRB because the judge ruled in favor of the RWDSU on unfair labor practice charges filed during last year’s election, so the outcome of this ruling could determine where the process goes from here if the RWDSU loses. “It could continue for a while,” Connor said.
Workers in Staten Island have reported that Amazon has been holding regular meetings with small groups advocating against the union efforts, known as “captive audience meetings.” Amazon held similar meetings in Bessemer before voting began this year and last year.
“It’s our employees’ choice whether or not to join a union. It always has been. If the union vote passes, it will impact everyone at the site, which is why we host regular informational sessions and provide employees the opportunity to ask questions and learn about what this could mean for them and their day-to-day life working at Amazon,” Nantel said in the statement.
The company has said in the past that it believes its workers do not want to unionize and that the results of last year’s Bessemer election proved that the company offers competitive wages, benefits and an attractive place to work.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
Former Microsoft Senior Director Yasser Elabd is working with whistleblowing agency Lioness to share information about kickbacks and bribery in the Middle East and North Africa.
Microsoft has already been charged once with violating the Foreign Corrupt Practices Act based on an anonymous whistleblower complaint.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
In June 2019, former Microsoft Senior Director Yasser Elabd traveled to Washington, D.C., to meet with members of the Securities and Exchange Commission, the Federal Bureau of Investigation and the U.S. Attorney General’s office to discuss his allegations that Microsoft was ignoring bribery at subsidiaries in the Middle East and Africa.
The meetings lasted nearly the entire day. Federal agents asked Elabd questions for hours. Elabd’s attorney told him that it was one of the first times they had witnessed the AG’s office send a representative to a whistleblower meeting like his.
But more than a year later, the SEC still hadn’t made a decision about Elabd’s allegations. The agency kept promising him that the team in charge of his case would make a decision soon about whether they would bring charges against Microsoft. Finally, at the beginning of March 2022, the case agent in charge of Elabd’s whistleblowing report told his lawyer that the SEC was closing the case because it didn’t have the resources to conduct interviews and find documentation abroad during the coronavirus pandemic.
So Elabd decided to try a different route to share what he knows. Today he published an essay on the whistleblowing website Lioness that accuses Microsoft of firing him after two decades with the company because he asked questions about what he saw as bribery within the contracting services Microsoft uses to sell software to government and public bodies in countries in the Middle East and Africa.
“We are committed to doing business in a responsible way and always encourage anyone to report anything they see that may violate the law, our policies, or our ethical standards. We believe we’ve previously investigated these allegations, which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns,» Becky Lenaburg, Microsoft’s vice president & deputy general counsel for compliance and ethics, wrote to Protocol.
The Foreign Corrupt Practices Act makes it illegal for U.S. companies or citizens to bribe people working for foreign governments, and a federal whistleblowing protection program is supposed to give people like Elabd privacy protection and rewards for reporting evidence to the SEC that could prove a company is breaking that law. Microsoft has already been charged once with violating the Foreign Corrupt Practices Act based on an anonymous whistleblower complaint like Elabd’s. In July 2019, the SEC announced that Microsoft had paid $16 million to settle corruption-related charges for licensing services in four countries: Hungary, Thailand, Saudi Arabia and Turkey.
Research from international financial institutions has found that bribery, kickbacks and corruption remain intractable problems within the governments and financial institutions of some countries in the Middle East and Africa; for example, a 2019 UN survey found that 30% of all Nigerians who interacted with government officials were asked to pay them bribes. “Progress in eliminating this problem has been limited and corruption still stands as a major obstacle for doing business in the region,” according to one report from the Organization for Economic Cooperation and Development.
Elabd told Protocol that he believes that the people who work for the contracting services Microsoft uses to sell products in these Middle Eastern and African countries are regularly using bribes and kickbacks, and that Microsoft knows about these bribes. He also believes that he was dismissed from the company because he insisted on asking questions about what he believed to be suspicious financial transactions. He said that he has spoken with at least five other current and former Microsoft employees who shared similar experiences and frustrations with him and gave that list of names to the SEC as people who were willing to be interviewed to share their stories and corroborate Elabd’s claims.
Lioness, the organization that published Elabd’s essay, is run by Ariella Steinhorn and Amber Scorah, who work in tandem with whistleblowing attorneys and nonprofits to help people like Elabd share their stories publicly. Because the Foreign Corrupt Practices Act includes a federal whistleblowing program, attorneys who work with sources like Elabd usually receive a portion of the financial reward given when the report results in a successful prosecution (though Elabd’s did not).
Elabd wrote in his essay that he believes he was dismissed from his role at Microsoft for asking too many questions about bribery and corruption. During his two decades at the company, he was promoted multiple times, handling global strategic accounts and, eventually, helped manage Microsoft’s public financial partnerships in the Middle East and Africa. But after he reported a request for $40,000 from a business fund that seemed suspicious and unjustified in 2016, he said his relationships with his managers changed dramatically. Though the suspicious request was eventually stopped after he reported it, he then escalated the issue above his manager, was reprimanded for doing so and then eventually emailed Microsoft CEO Satya Nadella to say he felt mistreated by his manager, according to the essay. Microsoft then put him on a performance improvement plan and fired him in the summer of 2018, after he refused to acknowledge the PIP. (He now runs a small IT firm with other former Microsoft employees.)
One audit of a Microsoft contracting service reviewed by Protocol, labeled as from the “Microsoft Partner Audit Program,» describes how products were discounted but then customers paid the full amount, how orders for Microsoft products were placed without actual purchase agreements in place and how the contracting service failed to prove that it actually conducts required anti-corruption risk assessments.
This audit and Elabd’s other allegations in the essay mirror some of the violations described in the 2019 SEC settlement. In his essay, Elabd describes a former colleague who sent him documentation that shows how government bodies in Qatar and Nigeria were paying for Microsoft licenses despite the fact that they did not have any computers that could actually use the licenses, meaning they were likely paying for nothing they could use.
Elabd also claimed that he believes that Microsoft and its subsidiaries are often made aware of the corruption, bribery or kickbacks but generally try to quiet people who want to speak publicly about the problem. He described one employee who he believed Microsoft had identified to be corrupt. “Executives from Microsoft’s human resources and legal departments confronted the employee, who threatened to reveal the scale of corruption inside Microsoft beyond his individual case if they took further action. He resigned and joined Oracle the next day,” Elabd wrote in his essay.
When Protocol asked Elabd why he had decided to file the whistleblower complaint, he said that he simply wants Microsoft to do more to fight corruption at its subsidiaries. “I just want them to fight the corruption, and to not cover up when there is corruption,” he said.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
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