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Apple’s battle with Fortnite might change the iPhone as we all know it

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Angela Lang/CNET

Sherlock and Watson, peanut butter and jelly, Netflix and chill. Since 2008, Apple has created that kind of inextricable hyperlink between its iPhones and its App Store. The corporate’s “there’s an app for that” advert marketing campaign drew thousands and thousands of individuals, who through the years have purchased greater than a billion iPhones. And for the reason that App Retailer was the one place to get packages for the iPhone, thousands and thousands of builders flocked to Apple too. Now the tech large is going through questions on whether it’s running a monopoly, compelled into the subject by Fortnite maker Epic Video games and Epic’s lawsuit alleging an abuse of energy. 

On Monday, Apple will face off towards Epic in a California court docket over a seemingly benign issue round cost processing and commissions. Briefly: Apple calls for app builders use its cost processing at any time when promoting in-app digital gadgets, like a brand new search for a Fortnite character or a celebratory dance transfer to carry out after a win.

The iPhone maker says that utilizing its cost processing setup ensures safety and equity, and it takes up to a 30% commission on these gross sales partly to assist run its App Retailer. Epic, nonetheless, says Apple’s insurance policies are monopolistic and its commissions too excessive.

On its floor, the lawsuit reads like a company slap combat about who will get how a lot cash after we all purchase stuff in apps. However the end result of this case might change all the pieces we all know not simply concerning the App Retailer, however about how cellular transactions work on different platforms just like the Google Play retailer. It might invite additional scrutiny from lawmakers, who’re already taking a look at whether or not corporations like Apple and Google wield an excessive amount of energy.

“That is the frontier of antitrust legislation,” stated David Olson, an affiliate professor who teaches about antitrust on the Boston School Legislation College.


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What makes this case unusual, Olson said, is that it attempts to challenge how modern tech companies work. Apple touts its “walled garden” approach — where it’s approved every app that’s offered for sale on its App Store since the beginning in 2008 — as a feature of its devices, promising that users can trust any app they download because it’s been vetted.

Aside from charging an up to 30% fee for in-app purchases, Apple requires app developers to follow policies against what it deems objectionable content, such as pornography, encouraging drug use, or realistic portrayals of death and violence. Apple also scans submitted apps for security issues and spam.

“Apple’s requirement that every iOS app undergo rigorous, human-assisted review — with reviewers representing 81 languages vetting on average 100,000 submissions per week — is critical to its ability to maintain the App Store as a secure and trusted platform for consumers to discover and download software,” the company said in one of its filings.

For its part, Epic has argued that Apple’s strict control of its App Store is anticompetitive and that the court should force the company to allow alternative app stores and payment processors on its phones. “Apple is bigger, more powerful, more entrenched and more pernicious than monopolies of yesteryear,” Epic said in an August legal filing. “Apple’s size and reach far exceeds that of any technology monopolist in history.”

Epic isn’t the only company making this case. Music streaming service Spotify notably complained to European Union regulators, saying that Apple’s 30% commission and App Store rules breached EU competition laws. On Friday, the EU’s competition commissioner said that a preliminary investigation found “consumers losing out” as a result of Apple’s policies. Apple will have an opportunity to respond to the commission’s objections ahead of a final judgment on the matter. If it loses, Apple could be slapped with a fine of up to 10% of its annual revenue and be required to change how it applies fees to streaming services, at least within the EU.

Apple is also facing increasing scrutiny in the US, where lawmakers earlier in April held a hearing with representatives from the iPhone maker and Google, as well as from Spotify, dating app maker Match and tracking device maker Tile. During the hearing, both Spotify and Tile argued that Apple’s moves were monopolistic. (They made similar arguments about Google too.)

If Apple loses its lawsuit with Epic, it could be forced to change how apps are distributed and monetized across its iPhones and iPads.

“I’ll be really interested to see how much Apple argues, “This is our successful business model and this is what’s at stake,'” Olson said. Judges are typically wary of completely upending a successful business on a theory that it could promote more competition and lower prices. But not always. “If you’re a certain judge, you might say, ‘Great! Let’s do it,'” he added.

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Apple’s App Store helped make the iPhone what it is today.


Angela Lang/CNET

Monopoly or not?

Legal experts and people behind the scenes of the trial say the hardest argument Epic will need to make is proving that iPhone users have been harmed by Apple’s policies.

Antitrust laws in the US outlaw “every contract, combination, or conspiracy in restraint of trade,” according to a summation of the rules written by the Federal Trade Commission, which oversees many of the antitrust issues for the US government. Antitrust laws also outlaw “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” The FTC notes that a key part of judging these issues is is whether a restraint of trade is “unreasonable.”

In the Apple case, that translates to its payment processing. Epic, and other critics, say Apple’s requirement that developers use its payment processing is in itself monopolistic. 

Apple argues that its commission is fair, and thus the payment processing structure isn’t unreasonable. Apple has kept its 30% commission consistent since the App Store’s launch in 2008, and the iPhone maker says industry practices before then charged app developers much more. Furthermore, it hired a team of economists to help prove its practices aren’t anticompetitive.

In their report, the economists Apple hired said commission rates lower “the barriers to entry for small sellers and developers by minimizing upfront payments, and reinforce the marketplace’s incentive to promote matches that generate high long-term value.” They didn’t look into whether the fees stifle innovation or are fair, concerns that Epic and other developers have raised. 

Agitating change

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Fortnite is one of the most popular games ever made.


Angela Lang/CNET

Up until last year, Apple and Epic appeared to have a good relationship. Apple invited the software developer on stage at its events to show off games like Project Sword, a one-on-one fighting game later called Infinity Blade.

But Epic wasn’t just a popular developer. It also began pushing the industry for change. In 2017, Epic briefly allowed Fortnite players on Sony’s PlayStation and Microsoft’s Xbox to compete with one another. This was a feature Sony in particular had resisted with other popular games, like Rocket League and Minecraft. So when Epic removed the function, players blamed Sony and began a social media pressure campaign against the company. Sony relented a year later.

In 2018, Epic opened its Epic Games Store for PCs, a competitor to the industry-leading Valve Steam store. Its key feature was charging developers 12% commission on game sales, far below the industry standard of 30%. Epic also paid for exclusivity rights to highly anticipated games, forcing gamers to use its store to play highly anticipated titles like Gearbox Software’s sci-fi shooter Borderlands 3, Deep Silver’s postapocalyptic thriller Metro: Exodus and the epic story game Shenmu 3.

Gamers, though, bristled at the move. They didn’t like having to install another app store to get access to some of their games. They complained that Epic’s store didn’t have social networking, reviews and other features they preferred from Valve’s store. And now they’d have to go through all that if they wanted to buy these hot new titles.

“I wish there were a more popular way to do this,” Tim Sweeney, Epic’s CEO, said in a 2019 interview with CNET. But a survey by the Game Developers Conference, released just before our interview, underscored Sweeney’s point, finding among other things that a majority of game developers weren’t sure Valve’s Steam justified its 30% cut of revenue. “I feel like the ends are more than worth the means,” Sweeney said.

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Apple iPhone and iPad owners haven’t been able to download the game since last August.


CNET

Project Liberty

Epic’s next target was big. In 2019, the company convened executives, lawyers and public relations experts to plan a public fight with Apple. Epic wanted to run its own app store and payment processing on the iPhone, according to documents filed with the courts. Epic even gave the initiative a name: Project Liberty.

To help make its case, Epic planned to lower the price for Fortnite’s “V-Bucks” in-game currency, which people used to buy new looks for their characters and weapons. It prepared a hashtag campaign, #FreeFortnite. And it helped form an advocacy group, the Coalition for App Fairness.

Epic also devised a marketing push, with a video reminiscent of Apple’s famous Super Bowl ad, which, in a tech-inspired spin on George Orwell’s novel 1984, had painted the original Macintosh as the savior. Now, though, Epic cast Apple as the evil Big Brother.

The project was organized in secret, according to depositions filed with the court. Epic “didn’t want anybody — Apple notwithstanding, anybody, users included, to — to understand that we were thinking about doing this until we decided to actually pull the trigger,” David Nikdel, lead of online gameplay systems for Epic, said in his testimony. Project Liberty was on a “need-to-know basis.”

Early on Aug. 13, Sweeney sent an email informing Apple it would no longer adhere to Apple’s payment processing restrictions, and turned on hidden code that allowed users to buy V-Bucks directly from Epic for a 20% discount. Epic made the same move with Google too, and both companies swiftly removed Fortnite from their respective app stores that day. Though Epic sued both companies in response, the Project Liberty marketing campaign was squarely aimed at Apple.

“Epic Games has defied the App Store Monopoly. In retaliation, Apple is blocking Fortnite from a billion devices,” Epic wrote in its ad, called Nineteen Eighty-Fortnite and posted to YouTube. “Join the fight to stop 2020 from becoming ‘1984.’”

Messy fight

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Before the pandemic, people filled stadiums by the thousands to watch Fortnite competitions.


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Apple’s and Epic’s case is being argued before a judge, in a “bench trial,” and not before a jury. US District Judge Yvonne Gonzalez Rogers, who’s overseeing the case, has indicated she’s closely read the filings and learned the technical sides of Apple’s and Epic’s arguments. As a result, both camps are likely to dive into the legal weeds much faster than they would with a jury, whose members would need to get up to speed on the law and the details behind the case. 

No matter the decision, it’s almost certainly going to be appealed. And in the meantime, regulators, lawmakers and competitors will be watching closely to see how much Apple’s and Epic’s arguments could shape new approaches to antitrust.

“Concerns regarding anticompetitive behavior among tech companies are being heard worldwide,” said Valarie Williams, a partner with law firm Alston & Bird’s antitrust team, in an analysis of the case. “While the outcome of Epic Games v. Apple is not expected to rewrite the nation’s antitrust laws, it could be the tip of the iceberg.”

With so much on the line, the companies could consider settling before a judgment is handed down. But people connected to the lawsuit don’t think that’ll happen, in part because there isn’t much middle ground between the two companies’ arguments.

Apple could lower its payment processing fees, which it’s already done for subscription services and developers who ring up less than $1 million in revenue each year

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Apple frequently points to its App Store as a key selling point of the iPhone.


James Martin/CNET

But allowing another payment processing service onto the iPhone could be a first crack in Apple’s argument that its strict App Store rules are built for the protection and trust of its users. If app developers could use any payment processor they wished, why couldn’t they use different app Stores too?

Epic has also argued that price isn’t the only issue it’s focused on. The company wants to choose technologies it uses in its Fortnite game as well.

That’s all why industry watchers say they expect the case to continue. Both Apple and Epic are large, well funded and notoriously obstinate.

“It’s easy to say it’s David vs. Goliath, but this is like Goliath vs. Godzilla,” said Michael Pachter, a longtime video game industry analyst at Wedbush Securities. “Tim Sweeney is a moral, ethical and quite opinionated person who genuinely believes he’s right, and will tilt at windmills because he’s convinced he’s right and it’s the right thing to do.”

Pachter predicts Apple’s argument around security of payment processes won’t hold up, considering Epic already successfully takes payment for V-Bucks on its own website and platforms. And when it broke Apple’s rules, Epic didn’t try to become a payment processor for games from other companies. Epic only tried to sell the same V-Bucks it offers for Fortnite on PCs and game consoles. 

“Tim did not say you can come into the Epic store and buy Clash of Clans currency or Candy Crush currency or whatever else,” Pachter added. “He was offering Epic currency.”

Epic’s lawsuit against Apple is set to begin Monday, May 3, at 8:30 a.m. PT/11:30 a.m. ET. The audio of the in-person courtroom proceedings will be carried live over a teleconference, and chosen pool reporters will be in the room. 

CNET will be covering the proceedings live, just as we always do — by providing real-time updates, commentary and analysis you can get only here.





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Rambo pores and skin coming to Name of Responsibility Warzone

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John Rambo has a new assignment in the Warzone.

John Rambo has a brand new task within the Warzone.


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Name of Responsibility Warzone may have a celeb touchdown in matches quickly. John Rambo should draw first blood if he plans on profitable a recreation.

Rambo might be a brand new pores and skin for season 3 of Name of Responsibility Warzone, based on a teaser tweet from the sport’s official Twitter account Monday. The brief video reveals a soldier operating whereas Rambo traces up his bow to shoot an explosive arrow. It ends with a date of Could 20 for when “the motion begins.”

In April, Warzone held its nuke event the place a nuclear weapon landed on the Verdansk map and wiping it out to finish season 2. As a replacement is a retro map of the world referred to as Verdansk ’84. With the ’80s theme comes an ’80s pores and skin, therefore Rambo. 

On Saturday, the Name of Responsibility Twitter account additionally tweeted a pretend advert for Nakatomi Duct Cleaning, an apparent reference to film Die Laborious and hero John McClane. 

Thus far, there isn’t a worth for the upcoming Rambo pores and skin.





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Xbox Sequence X restock: Stock updates from Amazon, Goal and extra

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Xbox Series X and S consoles proceed to be a chore to search out, though not almost as dangerous because the PS5. Final week, Walmart and Microsoft restocked each programs whereas GameStop acquired some Xbox Series S bundles It is was a quiet weekend and minimal whispers on what retailer shall be subsequent to restock their stock.  

Hold checking right here for the most recent updates on when the following Xbox Sequence restock is going on. 

For these nonetheless in want of an Xbox Sequence console, there are methods to enhance your probabilities of scoring one. For starters, attempt checking the retailers’ retailer hyperlinks for Xbox stock your self day by day and even a number of instances per day. (All the most important retailer shops are listed and linked beneath.) This gives you a leap on the competitors. For those who do occur upon an Xbox Sequence X restock, it is time to spring into motion with as many browsers and units as you may have available. On a desktop, for example, you would open the retailer’s web page in Chrome, Firefox and Edge. You would then do the identical in your cellphone and pill. It is like with lottery tickets: The extra you may have, the higher your probabilities of successful.

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A brand new period of Xbox is right here.


Andrew Hoyle/CNET

Twitter stays a helpful useful resource for a lot of players checking on Xbox restock information. However even when the leads are credible, there’s hardly ever various minutes’ warning — and stock sells out inside minutes. Even so, higher instances are forward for shoppers trying to get the brand new Xbox Sequence X.

One tip: Hunt down the $500 retail value and keep away from these expensive retailer bundles, which embody extraneous controllers, equipment and video games. Even higher, if you do not have a 4K TV and do not count on to get one anytime quickly, get the Xbox Series S as an alternative and save $200.

Presently, there is not any stock of the brand new console available wherever, however we’re keeping track of Twitter accounts and different sources of stories, and we’ll hold you updated on Xbox availability at retailers comparable to Greatest Purchase, Walmart, Amazon, GameStop and Goal. What follows is a listing of the most important retailers promoting the Xbox Sequence X console.

Learn extra:

Xbox Sequence X: Test stock restock

Amazon is promoting the Xbox Sequence X and the cheaper Sequence S from this similar product web page. 

That is Goal’s product web page for the Xbox Sequence X. 

Greatest Purchase was the final retailer standing again within the preorder days, however now stands prepared on your Xbox Sequence X buy as stock permits. 

GameStop had touted a “very restricted variety of Xbox Sequence X and S console bundles for buy” however these are at present offered out.

If you wish to get the most recent on the Xbox Sequence X, there’s most likely nowhere higher than Microsoft’s personal Xbox Sequence X homepage. Right here you will discover the most recent specs, introduced sport titles, particulars on the brand new controller and extra. 

Walmart does a stable job of noting availability home windows for PS5 and Xbox on its Twitter feedYou may also need to go to the retailer’s Xbox landing page for each new consoles. 

That is the place you should purchase the Xbox Sequence X at Newegg when the retailer has stock. 

Are you already getting determined? Are you keen to pay a premium of tons of of {dollars} over the checklist value? Pay attention, we would not do that and we do not suggest you do it, both. However if you wish to take that path, StockX is a good eBay-style web site that can allow you to purchase and promote new Xbox and PS5 fashions — so long as you are keen to pay upward of $650.

To be clear, we extremely suggest ready for stock to look at bizarre retailers, so you should purchase an Xbox Sequence X on the common retail value. However for those who’ve determined you merely cannot wait one other second, the common Xbox Sequence X value on eBay is about $800.

This story is up to date often with the most recent Xbox Sequence X stock information.


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CNET’s Cheapskate scours the web for great deals on tech products and much more. For the latest deals and updates, follow the Cheapskate on Facebook and Twitter. Find more great buys on the CNET Deals page and check out our CNET Coupons page for the latest promo codes from Best Buy, WalmartAmazon and more. Questions about the Cheapskate blog? Find the answers on our FAQ page.





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Fortnite battles Apple: Courtroom focuses in on App Retailer assessment course of and Epic’s advertising

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Epic Video games and Apple are battling it out in what’s being known as probably the most essential tech antitrust instances in years.


Angela Lang/CNET

Fortnite maker Epic Games sees Apple as overly controlling, opportunistic and unfair. Apple says Epic would not need to comply with the principles. Collectively, they might remake the way we see antitrust within the age of massive tech.

Over the previous few days, Epic and Apple have been sharpening their arguments in a California courtroom, making their case to Judge Yvonne Gonzalez Rodgers

Epic’s legal professionals and executives attacked Apple’s App Retailer, highlighting rip-off apps, tales from upset builders who complained Apple performed favorites, and cases the place Apple usually did not ship on its guarantees. 

“The errors that I have been proven originated from buyer and developer complaints,” stated Trystan Kosmynka, a senior director of promoting at Apple, in courtroom Friday. Slightly than seeing these messages as indicators the App Retailer staff is struggling to do their jobs, he stated the exercise reveals individuals belief the shop and need to assist hold it protected. “I am glad they’re passionate and e mail our executives reporting the issues and that we examine them shortly and enhance on it.”

Apple in the meantime attacked Epic in inquiries to advertising director Matthew Weissinger, making an attempt to undercut his complaints Apple would not assist market Fortnite as a lot as Microsoft, Sony and Nintendo do for his or her Xbox, PlayStation and Swap. “We create all types of engagement, hours of engagement inside Fortnite,” Weissinger testified Monday. “After which on the final minute, Apple type of injects themselves and says, ‘We require 30% on this as effectively.'”

The dueling narratives had been simply the newest instance of how Epic and Apple are utilizing the courtroom to air grievances whereas knocking each other’s companies. What’s unclear is whether or not or not these efforts will work. The proceedings are a bench trial, which means Choose Rodgers would be the one deciding the case, not a jury.

Epic’s hit Fortnite game was kicked from Apple’s App Retailer in August final yr after Sweeney authorized a change to the app, purposely breaking Apple’s rules towards utilizing different cost processing. Apple says its cost processing and strict app retailer guidelines are essential to the corporate, serving to it stand out from Google’s competing and extra extensively used Android software program, which permits “side-loading” apps and different app shops.

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Fortnite is among the hottest video games on the earth.


Epic

The result of the lawsuit may change every thing we find out about how Apple’s App Retailer works, in addition to Google’s Play retailer too. Apple could possibly be compelled to ignore its issues over app safety, permitting different app shops and cost processing into its gadgets. Authorized consultants, lawmakers and regulators are carefully watching as effectively, seeing the case as a primary have a look at how antitrust legal guidelines may apply to tech giants.

Choose Rodgers has additionally taken alternatives all through the previous week to ask robust questions of her personal from either side of the courtroom as they made their arguments.

When Kosmynka described Apple’s assessment course of, he added that the App Retailer staff instructed builders it could approve 50% of apps in 24 hours, and 90% inside 48 hours, relying on the app. So Rodgers requested if Apple delivered on these guarantees. “Completely,” Kosmynka stated, revealing that Apple presently approves 96% of apps inside 24 hours.

She additionally challenged Apple’s argument that proscribing the app distribution to only the App Retailer is a worthwhile tradeoff. “One of many issues with limiting competitors is that you aren’t getting innovation, or not less than that is one of many issues,” Rodgers stated. She additionally requested if Apple’s ever had an out of doors occasion independently assessment what’s on the App Retailer and pay bounties, just like how tech companies do for security researchers who discover vulnerabilities of their merchandise.

In the meantime, she pushed again on Epic’s makes an attempt to color Apple’s enterprise mannequin of creating a revenue off each iPhone, versus initially promoting their product at a loss like console producers do. Epic argued the mannequin incentivizes {hardware} makers to accomplice with builders as a result of royalties from these recreation gross sales assist make up the associated fee on the console.

After Epic’s Weissinger testified that regardless of giving Fortnite promoting area on the App Retailer homepage, Apple did not appear as invested in Epic’s success as console makers, who sponsored in-person and in-game occasions as a part of their advertising. The console makers, she stated, “had been selling their product everytime you did a collaboration with them.” So how was it completely different from Apple?

Weissinger stated it got here right down to the varieties of individuals Apple funneled to Fortnite too. Console avid gamers are there to play a online game. The App Retailer has much more individuals may be on the lookout for than a Fortnite repair. “It is not essentially individuals making the acquisition, it is also like, all types of random of us who’re going by way of that have. It may be any individual on the lookout for a health app or one thing like that,” he stated. The App Retailer, he argued, “simply supplies a much less certified viewers or much less certified client.”

Beneath are among the issues we discovered in the course of the courtroom trial:

  • Opening salvos and Epic CEO Tim Sweeney’s testimony. When Katherine Forrest started her opening assertion for Epic Games in its battle towards Apple in a California courtroom on Could 3, she blasted the iPhone maker as a monopolist, holding app makers hostage to its onerous licensing terms and commission structure, taking as much as 30% off subscriptions and different gross sales with out explicitly telling customers. However when she requested a seemingly benign query of Epic CEO Tim Sweeney on Tuesday, she revealed potential hypocrisy on her facet too.

    In the summertime of 2020, Sweeney had sent emails to Apple executives asking them to permit his firm to supply its personal app store for iPhones, successfully a substitute for the system Apple’s used since 2008. Apple has solely allowed app builders to supply applications to iPhone and iPad customers by submitting apps to its retailer the place they go underneath assessment earlier than being supplied on the market or at no cost. Apple additionally requires all app developers to use its payment processing service in the event that they need to promote subscriptions or in-app gadgets, like a brand new search for a personality or a power-up for his or her subsequent flip.

    Sweeney on the time gave the impression to be in search of a separate and particular take care of Apple, one thing that did not match with the corporate’s blustery lawsuit during which Forrest had claimed, “Epic is suing for change, not only for itself, however for all builders.” 

    “The market is not going to self right,” she added. That requires the intervention of power, extra highly effective than even the biggest firm on the earth has ever seen: Our justice system.”

    The subsequent day, on Could 4, she requested the soft-spoken Sweeney whether or not he’d have accepted a facet take care of Apple, successfully getting particular therapy whereas different app builders proceed shedding out. “Sure, I’d have,” he stated.

  • Sweeney prefers an iPhone. When Apple’s lawyer requested if a part of the explanation Sweeney prefers the gadget is Apple’s therapy of buyer knowledge, privateness and safety, he responded, “right.” He’d been handed Android gadgets however confirmed he gave them away.
  • Not simply Mission xCloud. Microsoft has been vocally complaining about Apple’s app assessment course of and its guidelines towards recreation streaming companies, like its previously named Mission xCloud Xbox service. In cross-examination with Nvidia’s Aashish Patel, a director of product administration who helped oversee its GeForce Now streaming service, Apple’s lawyer stated a streaming app from Nvidia had additionally been denied. In a gradual stream, Apple’s lawyer requested, “You are not a impartial observer on this dispute, right?” “You need Epic to win this case, right?” “Simply perhaps you are upset that Apple has rejected your app as a local app and you are not completely satisfied about that?” Patel stated he was dissatisfied.
  • Xbox loses cash — kinda. Considered one of Epic’s arguments is that Apple’s enterprise mannequin is to revenue from the iPhone at sale. Microsoft’s Xbox and Sony’s PlayStation comply with the razor-and-razor-blades mannequin, the place they promote the console at a loss (the razor) after which promote the video games and equipment at a revenue (razor blades). Although this has been generally identified, a Microsoft consultant confirmed throughout trial that its Xbox itself has never turned a profit.



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