Xbox pumps the brakes

Plus: Twitch’s new format, Meta’s response to crypto

Author

Joey Padgett
June 02, 2025

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Welcome back to Forests Over Trees, your tech strategy newsletter. It’s time to zoom-out, connect dots, and (try to) predict the future.

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Xbox pumps the brakes

Plus: Twitch’s new format, Meta’s response to crypto

⚡ Tech News Takes ⚡

  • What’s up: Perplexity launched Labs, a new Pro-only feature for building AI-generated reports, dashboards, and web apps. It uses tools like search, charts, and code execution to deliver structured outputs in ~10 minutes. The release comes as Perplexity pushes beyond search — previewing a browser, acquiring Read.vc, and eyeing a $1B raise at an $18B valuation.

  • So what: Just like the other frontier model companies, Perplexity is in a precarious spot, asked to invest big $$ to keep up with the performance of ChatGPT, etc.. But because their product is so similar to Google Search, they have the added challenge of directly battling the incumbent. This move helps them on both fronts, because 1/ it’s easier to productize existing AI (reports, app-builders, etc.) rather than chasing performance/parameter gains, and 2/ they can add these new features much more quickly than Google, differentiating to get some breathing room.

  • What’s up: Microsoft paused its first-party Xbox handheld to prioritize: 1/ handheld gaming performance for their Windows 11 operating system, and 2/ a next gen console for 2027. The OS work will also benefit their partner handheld devices like ASUS’s “Project Kennan”, a joint project with Microsoft.

  • So what: This sounds like a smart move for a few reasons. First, they’re already working with partners like ASUS on handhelds. Why duplicate efforts? Second, if they have to pick between the niche handheld market and the behemoth console market, it’s a no-brainer. Third, there are apparently real concerns about Windows 11’s gaming performance and growth relative to competitors like SteamOS. They don’t want to risk OS marketshare for an unproven new device.

  • What’s up: Twitch is upgrading with 1440p streaming, vertical gameplay mode, and a new rewind feature. Dual-format streaming (vertical + horizontal) starts testing this summer. Enhanced codecs and adaptive resolution aim to improve experience across devices and compete with TikTok-like formats.

  • So what: This caught my eye because it reinforces the theme we’re seeing everywhere in media — mobile is massive. While you could still watch streams on your phone before, it wasn’t optimized, which likely hurt streaming numbers. Looking forward to seeing if/how this boosts viewership.

  • What’s up: Meta shareholders rejected a proposal to hold Bitcoin in its treasury. Instead, the company is exploring stablecoins for global payouts, continuing crypto experiments without the volatility. The board said existing treasury management already meets liquidity and safety needs.

  • So what: While MicroStrategy, GameStop, and others go all-in on Bitcoin, making it a major part of their identity strategy, I’m not surprised Meta’s shareholders said no. For one thing, their big tech counterparts (Microsoft, Amazon, etc.) said no to similar proposals recently. For another… they don’t need to! When you have annual cashflow of $54B (up 23% in 2024), you don’t need to take random risks like that. Instead, you focus your risk-taking on innovating and finding new products and customers.

🛠️ Tool of the Week 🛠️

Finance Headlines, Translated for Humans

Every week, 1440 zooms in on one timely business or finance theme—whether it’s a sudden Fed pivot, an IPO frenzy, or the hidden economics behind AI chips—and unpacks it with crystal-clear analysis. Expect a swift read grounded in hard data: straightforward charts, context that connects the dots, and zero partisan spin. We cut through industry jargon so you gain real insight, not marketing fluff, leaving you informed, confident, and ready to talk markets like a pro—all in one concise email.

🌲 F/T Shoutouts 🌲

  • Pharma M&A visual — I’m a nerd but found this fascinating. We talked a few weeks ago about 23andMe getting bought by Regeneron, and CBInsights had this crazy graphic putting that into context. Only thing I don’t agree with is the title… this is actually Novartis’ acquisition boom, am I right!?

  • ‘Tis the season — … for commencement speeches. I’m a sucker for a good speech, and commencements are no exception! Gotta love the optimism and the sense that something great is right around the corner. Here is one from YouTuber Hank Green.