Welcome to Lowpass! This week: Why Alexa+ is worrying voice developers, and why Dads will rule VR.

Amazon’s Alexa+ plans worry some voice developers

When Amazon launches its new Alexa+ voice assistant in beta later this month, consumers may find a few things amiss. That’s because Alexa+ is poised to launch without many of the 160,000 skills currently available on the original Alexa. Consumers will still have access to popular services like Netflix, NPR and Spotify, but a number of lesser-known, longtail voice apps built for the original Alexa are expected to be absent from the new platform.

The company does have a transition plan of sorts in place for existing skills, with an Amazon spokesperson telling me that “the vast majority of original Alexa skills that customers use will be supported on Alexa+ from the start. If there are any skills customers want added that are not supported, they can let us know and we’ll work to enable them on Alexa+.”

Amazon has yet to publish detailed guidance for Alexa developers about these changes, leading to some confusion and concerns among the voice developer community. I’ve been in touch with half a dozen developers and publishers with connections to the Alexa ecosystem, most of which agreed to talk to me under the condition that I do not mention their name. 

Some expressed doubts about the future of monetizing voice experiences on Alexa, as well as the strength of Amazon’s commitment to existing skills now that the company’s focus is on Alexa+ and its new APIs. "They'll let them wither away," mused one of my conversation partners.

Few updates, save for one ominous note

When Amazon announced Alexa+ last month, it emphasized the new conversational capabilities of the LLM-powered voice assistant. Demos showed off the capability of Alexa+ to handle a series of tasks in succession, and for instance book a restaurant reservation and then hail an Uber to the restaurant in a single conversation. To do this, Alexa+ is using a couple of new APIs that can integrate directly with third-party services, solve tasks on supported websites and more.

Something the Amazon did not touch on when it unveiled Alexa+ was the fate of the 160,000 skills voice developers have built for the original Alexa assistant – save for one ominous note on its developer site that suggested significant changes ahead:

“If you're an existing Alexa skill developer, customers using the original Alexa experience will retain access to all your skills,” the note read. “You can continue to refine, re-certify, republish, and also create new skills on original Alexa. We will continue to support original Alexa, but new developer tools will be focused on Alexa+.”

Multiple sources I talked to saw this as a confirmation that skills are essentially on their way out, with one source specifically bemoaning that they won’t be able to build more complex voice apps known as Custom Skills for Alexa+ anymore. “Custom Skills give us an owned and operated platform within the Alexa experience," that source said, with benefits including more detailed analytics on customer behavior, among other things.

Amazon’s spokesperson told me that developers will be able to continue to build Custom Skills for the original Alexa voice assistant. “Technically, they can do this and then request their skill to also be available in Alexa+,” the spokesperson said, adding that the company was instead encouraging developers to take advantage of the new Alexa+ APIs.

Broken links and overnight changes

Not too long ago, Amazon touted Alexa skills as the next big developer platform. Initiatives to boost the platform included the Alexa Developer Rewards Program, which paid bonuses to developers of popular third-party skills. The company also ran the Alexa Prize, a college competition with prizes of up to $1 million.

However, Alexa fell out of favor within Amazon when it became clear that the voice assistant was eating up billions of dollars without significantly contributing to the company’s bottom line. Amazon laid off several hundred employees who had been working on Alexa in late 2023, and discontinued the Alexa Developer Rewards Program last summer. 

The company also all but stopped outreach to developers. Its blog for skills builders, which used to get updated multiple times  a month, received no updates between August of 2024 and a post announcing the Alexa+ launch last month. A list of recommended skills development agencies on Amazon’s site hasn’t been updated in years, and includes a number of companies that have since ceased to exist.

Internally, things weren’t going much better for skills developers. Christian Mahnke, CEO of German interactive audio startup Ear Reality, told me that the Alexa skills store has become increasingly unreliable in recent years, with broken links abound. “They decided, for whatever reason, not to fix it,” he said, adding that analytics for skills developers also became less reliable over time. "Less people are working on that, and it is no longer relevant to them," he said.

Ear Reality had been an early Alexa skills developer, and won the Alexa Games Skills Challenge in 2018. However, the startup got a reality check of its own when Amazon changed the way it handled requests for interactive audio out of the blue a few years back. Prior to those changes, Alexa would launch Ear Reality’s skills whenever a German user was requesting an interactive audio book. Then, Amazon changed something internally, and the same request summoned Amazon’s own Audible service instead.

"That's when we decided we better build our own platform as well," Mahnke said.

Amazon’s Alexa skills store didn’t really work

From Amazon’s perspective, moving away from the existing skills ecosystem makes sense. The original Alexa Skills Store had been envisioned as an app store similar to Google Play, open to anyone who would follow some basic requirements. But as the number of skills grew, that model quickly reached its limits. 

Amazon does offer access to the skills store via its website and mobile device, but many consumers simply discovered skills through voice requests on their smart speakers. "Even in the early days, no one was exploring the skills store," Mahnke said. Discovery issues limited the revenue potential for developers while also frustrating customers.

Skills also proved inadequate for more complex tasks, with The Verge’s David Pierce noting last year that ordering a pizza through Alexa can be an order of magnitude more complex than picking up the phone and calling your local pizza parlor.

Alexa+ aims to change all that with a set of new APIs, and LLM-powered voice interactions that don’t require consumers to summon individual skills by name anymore to get tasks done. Amazon highlighted partnerships with companies including Netflix, Hulu, Disney+, Max, Spotify, Tidal, Plex, NPR and others during its Alexa+ launch event, and the company has unveiled three new APIs geared towards integrating with existing end points.

A greater focus on conversational interactions that doesn’t require consumers to summon a skill or remember an exact phrase to accomplish simple tasks anymore could also help reinvigorate interest in voice assistants, and perhaps even get people interested in buying new smart speakers and displays again – something that Amazon is reportedly betting on with a new line-up of high-end devices the company plans to unveil later this year.

The flip side of this switch to a more conversational Alexa experience is that it works best with a smaller, more highly curated catalog of partner integrations.

At least something is happening

Not everyone I talked to was all glum about the upcoming changes. “It's really exciting times,” proclaimed one developer, while another conceded that it was simply too early to  say whether the changes would ultimately be a net positive or not. “At least something is happening,” that developer told me.

As for Ear Reality, Mahnke told me that the company is nowadays more focused on other platforms, including mobile apps, the web and automotive integrations. He said that the company still reaches roughly 120,000 users a year on Alexa, but that it has become a lot less relevant as a revenue driver.

When I asked Mahnke what Amazon’s decision to prioritize new APIs over existing skills means for Ear Reality’s business, he was blunt: "Basically nothing."

Teens rule VR. Dads may be next.

In recent months, a growing number of VR developers have voiced concerns about revenue shortfalls. Some have squarely blamed Meta for this, alleging that it was prioritizing its own metaverse efforts and free-to-play titles over higher-quality, more expensive games.

This week, Meta Reality Labs Director of Games Chris Pruett addressed those concerns in his annual GDC talk about the VR ecosystem. “I’ve talked to developers who have witnessed very significant declines in their revenue,” he acknowledged, while stressing that Meta saw overall revenue on the Quest store increase by 12% in 2024, with engagement up 30%. Pruitt also shared some internal research to prove that any changes instituted by Meta last year, including the opening of its app store, only had negligible results on sales.

So what’s actually happening? In short, VR user demographics are shifting, with teens now ruling the metaverse. “They are now, as far as we can tell, the most active cohort of customers on our platform,” Pruett said.

What else

Netflix is building its own cloud gaming infrastructure. I talked to Netflix CTO Elizabeth Stone to hear more about the company’s plans to power cloud gaming by its own Open Connect CDN.

Roku is testing autoplay ads preceding its home screen. Roku owners are not amused, but the company says it’s only a test.

More than 100 million Americans now subscribe to a music service. That’s according to the RIAA, whic says that digital music brought in close to $15 billion last year.

The global VR headset market declined by 12% last year. That’s according to Counterpoint Research, which also estimates that Meta’s VR headset market share is now 77%.

Plex is raising prices for its Plex Pass. The company is also changing how it charges people who access media on third-party servers.

Disney+ gets a 24/7 Simpsons stream. It’s a small step towards more linear content on Disney+ — just donut call it a FAST channel …

Apple TV+ reportedly loses $1 billion a year. Apple has been investing $5 billion a year in content for the service, but the company began curtailing spending last year, according to The Information.

LG shutters NFT marketplace for TV art. LG owners already aren’t able to buy any new NFTs anymore, and the whole enterprise will shut down by the end of April.

That’s it

Don’t ask me why I did this, but: The other day, I asked Google’s Gemini AI chatbot to tell me a joke about myself … and Gemini figured it would be funnier if it told a joke about itself instead. Which, honestly, is pretty rude. But also wrong, because here’s Gemini’s joke: "Why did the AI get confused? Because it tried to understand human humor, especially when it was trying to make jokes about itself." Good news for comedians: Your job is safe … for now.

Thanks for reading, have a great weekend!

Amazon Echo Show photo by Sean D on Unsplash