Apparently, it was a very recent decision. Xbox Chief Product Officer Mark Whitten told AllThingsD that the company had been listening to consumer feedback since the product’s unveiling in May, but that the E3 presentation was “the first time we had a chance to really lay out our program.”

“E3 was the first time when we felt like we’d had a chance to tell our complete story and have people see what they liked and what they didn’t like,” Whitten said.

Put another way: Despite all the non-gaming home media features baked into the Xbox One, Microsoft knows that gamers still butter its bread. That E3 presentation was actually less “complete” than the unveiling event because it was all about games, games, games.

Microsoft catered to gamers and ignored big features like the bundled Kinect and TV integration in its onstage E3 presentation, but the fans were still angry. Today’s announcement doesn’t make Redmond look good in the short term, but it cuts its losses before those fans have a chance to sway publishers’ minds or avoid the Xbox One on store shelves.

In other words, if this policy change had to happen at some point, it’s probably smarter for Microsoft to pull the trigger and take the hit now, rather than endangering the One’s launch by dawdling as the anti-DRM winds consistently blew in its face.

Whitten promised that both new DRM policies — the removal of online “check-ins” every 24 hours and the restrictions on physical disc sharing — will not change again. However, third-party developers will still have to choose for themselves if and how much their games will require constant Internet connectivity.

Interestingly, an anonymous (and unverified) forum post, allegedly by an Xbox engineer, predicted a policy change last week. Mandatory online check-ins, the supposed engineer wrote, were “the PoR (plan of record), but I expect it to change after the e3 clusterfuck.”

Microsoft previously declined to comment on the post.

On Wednesday IV sued Motorola Mobility in the U.S. District Court for the Southern District of Florida, claiming the Google-owned company had infringed seven more of its patents. IV had previously sued the company over six patents in a 2011 Delaware lawsuit, so this brings the grand total of disputed IP items to thirteen, covering everything from multimedia messaging to file transfer technology. Interestingly, two of seven patents IV asserts today were owned by Nokia as recently as 2011.

IV, which fancies itself as the architect of a new capital market for inventions akin to venture capital, says this suit is its last recourse following failed efforts to reach an agreement with Motorola. “These infringements complaints are a necessary step in protecting our patent rights and fulfilling our commitments to our investors, inventors and licensees,” the company said.

But Google is opposed to the sort of patent privateering on which IV is building its business. And in a terse statement, it slagged the firm and vowed to fight the suit.

“We’re fighting to stop patent trolls’ use of low-quality patents to extort money from companies that actually innovate and make real things,” a Google spokesperson told AllThingsD. “We support bipartisan efforts by the White House and Congress to end these kinds of abuses.”

Former Kleiner Perkins Partner Ellen Pao sued Kleiner in May 2012 in San Francisco Superior Court over alleged multiple instances of sexual harassment, discrimination and retaliation.

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With one day to go before Instagram’s big day, Vine is stepping up its publicity game — ever so subtly.

Dom Hoffman, co-founder of the Twitter-owned Vine video service, seems to be teasing a number of unreleased features for his app in a series of tweeted Vine videos. He’s joined by co-founder Rus Yusupov, who is also Vining the new features of Vine.

(How very meta of them.)

Mind you, this comes less than 24 hours before Instagram plans to debut a new video feature at Facebook headquarters, as we reported on Tuesday. Vine also thanked its 13-million-user community in a blog post on Tuesday, again telling the public that there are more features in the works.

So what is Vine teasing? Take a look at Hoffman’s first video:

Tinkering https://t.co/8qbqp0QLMh

— Dom Hofmann (@dhof) June 19, 2013

I spot full-screen videos rather than the smaller box-like ratio we’re used to. There’s also text slapped inside some of the photos themselves, which is interesting (if not a nod to Snapchat’s text features).

Hoffman’s second Vine is even more interesting:

Say something nice https://t.co/BFamYIB3nu

— Dom Hofmann (@dhof) June 19, 2013

Considering the nature of the text, it looks like users are engaged in in a back and forth conversation, a dialogue. Perhaps a hint of a private messaging feature to come? Users can send private messages on Twitter (and again, private videos on Snapchat), so perhaps Vine wants to incorporate that ability in its own app as well.

As for the part that says “cut by Tom,” your guess is as good as mine. Perhaps it has something to do with the last Vine, tweeted out by Yusupov:

Bleep boop https://t.co/zuyoAq0h3t

— Rus Yusupov (@rus) June 19, 2013

Looks like he’s able to cut his clips apart, though it’s unclear just what exactly he’ll be able to do with them.

Spot anything I missed? Sound off in the comments below. Otherwise, we’ll have to wait and see what the Vine team has in store when the actual new version hits — ostensibly in the coming weeks.

But since Apple Inc. revolutionized mobile computing with the iPhone, no traditional PC maker has been able to thrive by becoming a major competitor in the smartphone market. And cracking the duopoly of Apple and Samsung Electronics Co. will require a huge investment.

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Icons copyright creadib

There’s no question that the market potential is huge. The photo/video category on iOS is the third most popular category, and hundreds of millions of people are capturing digital photos and video clips every day. Some people still want to print them on cards, t-shirts and other objects. But a fast-growing number are interacting with them solely on a screen, whether it’s a mobile phone, tablet, laptop or TV. The world of photography is increasingly moving from one of atoms, things we can touch, to one of digital bits, things we can’t touch. Companies are being forced to figure out how to monetize photos in a world of intangible goods.

With everyone running around taking, editing and sharing photos and video clips, the revenue should be flowing, right? Wrong. There’s a lot of “fool’s gold” in this industry. The easy part is attracting users, since photos have proven to be the most universal currency for driving social network virality. The hard part is figuring out how to build a vibrant business model around photos and video clips.

Here are the five distinct approaches that companies are taking:

1. Tangible Goods
   As the world goes digital there’s still a strong market for atoms-based personalized products with photos printed on them. It wasn’t that long ago that printing a photo on a pillow or wall-mounted canvas was impossible for the average consumer. But companies like Shutterfly and Snapfish have done very well selling photos printed on everything from cards and calendars to mugs and t-shirts. Last year there were about 30 million custom photo books sold in the U.S., double-digit growth from the year prior. The market for tangible photo products will always exist — but digital alternatives are coming, and could be quite disruptive.
2. Digital Derivatives
   Digital derivatives are enhanced versions of photos and/or video clips, and they are 100 percent bits-based. Examples include a filtered photograph, an enhanced video clip, an online photo book or a video slideshow set to music. The magic here comes with creating a sense of emotion through production value and storytelling. Similar to tangible goods, digital derivatives are products that were formerly nearly impossible to create for the average consumer without training, time and access to expensive tools. But now, with a few clicks, we can all create amazing photos and video slideshows that tap into peoples’ emotions and nostalgia in a way that a raw image or video clip rarely does. Because digital derivatives can carry much bigger emotional value than tangible goods (e.g. a movie-trailer-like recap of a recent family trip), people are willing to pay for such services and tools that can easily create and share their digital creations.
3. Peace of Mind
   There’s no question that photos are among our most precious possessions. But while they were once thought to be irreplaceable, that’s really no longer true — if you have them backed up in the cloud. What a feeling it will be when we all have the peace of mind that every photo that’s important to us, even those taken years ago using film, are safe and sound in the cloud and can be reprinted, reframed and re-hung, anytime we want. That sense of security is easily worth tens to hundreds of dollars a year, in my opinion, and that’s why consumer cloud services like Dropbox, iCloud, and Microsoft SkyDrive are sure bets for being profitable. For photo and video startups looking to compete with the larger horizontal cloud players, the key is focusing on the user experience, since that’s much harder for larger players that need to focus on other types of files in addition to photo and video.
4. Advertising
   Advertising may seem like an obvious way to monetize online personal photos and video clips, but it’s actually a very tricky business model for a pure-play online photo hosting and sharing company. The challenge is scale and context. First, you need a lot of page views or large news feed volume for an advertising business to work. So even if your business does intend to use advertising, it’s not the appropriate focus for the early days of your company, since Job Number One should be getting traffic. Second, if you’re lucky enough to get to scale, then it’s very difficult to implement an ad model that doesn’t freak out your user base. The issue is that people don’t generally want to see ads next to their cherished family photos.
5. Acquisition
   True, the hope of being acquired is a far cry from building a sustainable business model. But this long-shot approach is the most common I see from the dozens of photo and video-related companies that launch each month. There are enough high-profile acquisitions for companies with no business model that it doesn’t even seem that weird to have a photo business with no contemplated business model these days. However, for every Instagram — or even SocialCam — there are hundreds if not thousands of shelved photo and video companies.

To make money off of digital photos and video clips, you can either monetize the photos by selling tangible goods, digital derivatives or peace-of-mind cloud storage, or you can use the photos as currency to monetize your community through advertising. If none of those will make you enough money to sustain and grow your business, then you should hope that your technology, user base or scale will be strategically complementary to an acquirer that can gain revenue in one or more of those ways. The long-term industry winners will have a blend of these business models but, interestingly, there aren’t many examples of such companies today.

Brad Jefferson is the co-founder and CEO of Animoto, an online video creation service that empowers people and businesses to create and share videos using their own pictures, video clips, words and music. Follow Brad at @brad_animoto.

But the yearlong effort hasn’t got very far with the major U.S. cable and phone companies. A big reason: some of them have asked Netflix to pay for that access.

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“We’ve spent the past two and a half years building a product that helps you answer the question: ‘What’s happening nearby right now?’” Spindle said in a company blog post. “Every time we’ve experimented and looked beyond local discovery, we’ve been amazed by the breadth and quality of content shared on Twitter.”

“By joining forces with Twitter, we can do so much more to help you find interesting, timely, and useful information about what’s happening around you,” the company said.

I’ve been rather interested in Spindle since I first covered the service last year. The brainchild of a group of ex-Microsoft search engineers, Spindle pitched itself as a “tacit” mobile search application. Essentially, the app sifted through the torrent of data that streamed through the social Web — from places like Facebook and Twitter — on a minute-by-minute basis, and would deliver users local points of interest like restaurants or stores based on tweets, location and time of day. It was a way of fine-tuning the local discovery experience from the mobile device.

“We ingest data from lots of different sources, spooling them into the structured search system,” Pat Kinsel, a vet of Microsoft’s FUSE Labs who worked on Facebook-Bing integration, told me back in August. “Ultimately, it produces a better thread on the other side.”

Since Twitter is shutting down the service, I’d expect that the team of engineers will be working in a similar area focused on local discovery. Though I’d assume it’s not necessarily an apples-to-apples, Spindle-to-Twitter implementation.

My guess? Twitter may focus that talent on fleshing out local discovery features to add to the microblogging service, a feature we reported that the company was testing months ago. Twitter is dabbling with how to better make use of data like location information, surrounding tweets from nearby users and points of interest that are occurring close to you. The team at Spindle seems especially well-suited for a task such as this.

That’s probably something that Foursquare will want to take note of, considering the check-in-based startup has spent the past year pivoting into its own version of a local discovery app.

The Spindle team will relocate from their headquarters in Boston to Twitter’s offices in San Francisco as a result of the acquisition. Terms of the deal were not disclosed.

The democratizing of 3-D printing just saw its first big deal, with the sale of MakerBot to Stratasys for $403 million in stock, with an additional $201 million in performance-based earn-outs.

Stratasys is a larger industrial 3-D printing company, which has been around since 1989, while MakerBot has pioneered the desktop 3-D printing. But it has sold more than 22,000 3-D printers since it was founded in 2009, especially the most recent MakerBot Replicator 2 Desktop 3D Printer.

With it, a consumer can print out small objects, such as a plastic figurine. But the entire 3-D industry is innovating rapidly and things such as replacement body parts are also being printed on some machines.

MakerBot will continue to operate independently, out of its new factory in Brooklyn, Minneapolis- and Israel-based Stratasys said. MakerBot also has one retail store in Manhattan, where it shows off its printers and the thousands of objects that can be made from it.

Stratasys is a publicly traded company, which merged with another company in the space called Objet, last year.

In 2011, MakerBot raised $10 million from a number of investors, including Foundry Group, RRE, True Ventures, Facebook exec Sam Lessin and Amazon CEO Jeff Bezos’ personal investment group Bezos Expeditions. Thus, it’s obviously a big win for them all.

“We have an aggressive model for growth, and partnering with Stratasys will allow us to supercharge our mission to empower individuals to make things using a MakerBot, and allow us to bring 3-D technology to more people,” MakerBot CEO and co-founder Bre Pettis said in a press release. He will continue to lead the company.

Said Stratasys, about its move into the “prosumer” or “maker” arena: “The merger enhances Stratasys’ leadership position in the rapidly growing 3-D printer market, by enabling Stratasys to offer affordable desktop 3-D printers together with a seamless user experience.”

Indeed, sources close to the MakerBot said it was on track to reach revenues of more the $75 million in 2013, a huge leap over last year’s $10 million in sales. It could be more if its new scanner product is released on time and sells well. It will allow a user to scan an object and then render a digital file that can be used to print it, all without requiring drawing skills.

In addition, MakerBot also had many offers for additional funding, said sources, at similar valuations to the sale.

Stratasys said the transaction is expected to be completed during the third quarter of 2013, subject to regulatory approvals. There will be a press conference tomorrow morning about the deal at MakerBot’s New York HQ.

Zynga announced on Wednesday it had acquired Spooky Cool Labs, a Chicago, Ill.-based gaming studio focused heavily on real-money gaming titles.

“We have a legacy in social casino franchises with Zynga Poker, and we believe that free-to-play social casino games for the Web and on mobile have the potential to reach and connect a much broader audience,” Zynga’s chief revenue officer Barry Cottle said in a company blog post.

“Spooky Cool Labs is the right team to help us bring the feeling of being on a casino floor and the thrill of hitting a big jackpot right to players wherever they play,” he said.

Terms of the deal, which was first noted by TechCrunch, weren’t disclosed.

As Zynga has signalled for some time, real-money titles are a big bet for the company’s future. It recently launched two of its first real-money games in the United Kingdom, ZyngaPlusPoker and ZyngaPlusCasino. This was the fruit of Zynga’s partnership with bWin, a major operator that has licenses to operate online real-money gaming websites in multiple countries across Europe.

But real-money gaming is still nascent for Zynga, especially due to restrictions on online gambling in the United States, one of Zynga’s key markets. The company has said it hopes to eventually release real-money games in the U.S., but necessary legislation and lobbying efforts could take at least a year or more before Zynga sees any progress.

The acquisition also comes on the heels of a large round of layoffs — approximately 18 percent of Zynga’s workforce — in an effort to reduce costs and restructure the business toward mobile.

Spooky Cool Labs will stay based in Chicago, and founder Joe Kamikow will also continue leading game design for Aristocrat Leisure Limited, a major slot machine company based in Australia.

The talks have faltered, they said. One person said talks took place as recently as this month but aren’t likely to be revived.

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Already since launch, Lytro has added several features, including the ability to add filters and create a sense of motion. There is also enough information in its special light-field files to create a full 3-D image, something the company will likely enable down the road.

It turns out that Lytro’s camera itself has been hiding some extra capabilities. Lytro is announcing today that its camera actually has Wi-Fi built in, which the company is now unlocking to allow the camera to wirelessly connect to an iPhone for uploading and sharing pictures on the fly.

Through a new free app for the iPhone — and a firmware update to the camera — Lytro owners can connect via Wi-Fi to view their pictures and share them online. The camera shows up as a Wi-Fi network to which the iPhone can connect for the purpose of sharing photos. (As a result, the iPhone can’t simultaneously use Wi-Fi to both connect to the camera and to an Internet hotspot.)

The move gives camera owners a way to share pictures on the go, removing the necessity of first connecting the camera back to a computer. What’s being sent is a compressed version of the full light-field image, with each file using about five megabytes of space, as opposed to the uncompressed file, which uses about 16MB. It’s a tradeoff of quality versus file size and upload speed.

“We’ve opted for a nice balance,” said Eric Cheng, Lytro’s director of photography.

Lytro also hopes to build more community, including a way in the iPhone app to discover and view popular images from other camera owners.

With the iPhone app, Lytro is starting to shift some of the processing work to the cloud, rather than relying on its Mac and PC apps to do the heavy lifting.

It is also finally letting camera owners share beyond the Lytro embedded player. Owners now have an option to create an animated GIF file of either an image being refocused or undergoing a 3-D-like parallax effect, which Lytro calls “perspective shift.” (Lytro has actually had this under its hat for a while, too, creating this custom animated GIF after the camera’s onstage demo at AsiaD.)

An Android app is on the road map, too, though Cheng didn’t have a specific time frame.

As for other surprises the Lytro camera might be hiding, it also has a yet-to-be-utilized Bluetooth chip, Cheng confirmed.

All the work that I have done in my life will be obsolete by the time I’m 50.

– Apple co-founder Steve Jobs in 1994

Gnip Jud Valeski, left, will now be Gnip’s CTO. Moody steps into the CEO role.

Jud Valeski will now become CTO, while Chris Moody moves into the CEO role. Previously, Valeski was CEO while Moody was COO and president.

“It catches Chris at a moment in time where his understanding of what we need to do next, coupled with years of direct experience executing at Gnip, aligns extremely well with how the business is growing and scaling,” Valeski said in a company blog post. “Similarly on the revenue side, he helped lead his previous company to hundreds of millions of dollars annually.”

The startup is one of a handful of data resellers with full access to Twitter’s “firehose,” the pipe through which Twitter’s hundreds of millions of daily tweets all flow. Gnip sifts through all that and surfaces relevant trends and insights to its clients, which include many in the private business sector, finance, the government and the ad tech industry.

Gnip currently has 70 employees and, as Valeski notes, Moody has experience scaling companies up to include hundreds of people — another part of why Moody got the job.

Whatever you believe about PRISM, you have to admit that Drummond is in a bit of a pickle. Yesterday, Google formally filed to disclose statistics about the secret FISA requests it receives — while noting that it could not confirm or deny it received such requests.

Addressing the space in between secret government programs and Google’s carefully worded denials, Drummond swore up and down that Google is “not in cahoots with the NSA.”

“There is no free-for-all, no direct access, no indirect access, no back door, no drop box,” he wrote.

Drummond didn’t say anything we hadn’t heard before, but he seemed to be making an effort to be a little more human, leaving fewer holes in his phrasing for skeptics to carefully parse.

For instance:

We’re not in the business of lying and we’re absolutely telling the truth about all of this. Our business depends on the trust of our users. And I’m an executive officer of a large publicly traded company, so lying to the public wouldn’t be the greatest career move.

And:

If by what has now been “revealed” you mean the allegation that Google is allowing the NSA unfettered access to user data or that we’re handing over data willy-nilly to the government, again, that’s just not true. It’s not rhetoric, it’s just a fact.

The Silicon Valley car maker said Wednesday that it acted after discovering the potential problem in its own quality tests, and hasn’t received customer complaints.

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In a new push — dubbed the “Shift Plan” — Alcatel-Lucent aims to slash €1 billion in annual costs, sell €1 billion in assets and direct resources away from older products that will now be “managed for cash,” the company said in a statement Wednesday morning. It said its goal is to make Alcatel-Lucent cash-flow positive in 2015.

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Apple TV owners who have access to HBO and/or ESPN have already been able to stream video from those companies’ apps to their sets, via AirPlay. But direct access via a dedicated app should be a plus.

Of course, as with all things related to TV and the Internet, there is a bit of fine print that will trip up some pay-TV subscribers. For now, the HBO Go app won’t be available to DirecTV or Charter subscribers, and the ESPN app won’t be available to Dish or DirecTV subs. Chalk that up to the fact that “TV Everywhere” still isn’t, because of legal/biz dev/technical issues that take way too long to sort out.

The new apps mean there are now 14 outside developers/services providing video for Apple TV, which is a big improvement over a few years ago, when the box was primarily a Netflix + iTunes provider. But it’s a far cry from the open platform that rival Roku offers.

And there’s still no sense that Apple is in a hurry to change that.

As so many enterprise applications have migrated off-premise and into the cloud, companies that use them are a little bit at the mercy of their SAAS providers when those applications go down. If Salesforce.com has a performance issue, you’re sort of stuck watching its performance dashboard and waiting until the issue is resolved. The situation is essentially out of the enterprise’s control.

Backed by a $5.5 millon investment from Sequoia Capital, ThousandEyes aims to make it easier to solve those problems. CEO Mohit Lad told me that performance management products that enterprises have available to them today are generally blind to everything outside the corporate firewall.

ThousandEyes has technology that provides some visibility into the many layers involved with delivering an application and all its connecting tissue, making it easier to track down the source of the problem.

If that doesn’t get the job done, there’s a capability to provide deep path analysis to show in pretty surgical detail the path running between you and the cloud provider. There’s also a tool that will let you share information about the service problems with other members of your team around the world, so you can easily compare notes and get the problem solved faster.

It already has a pretty impressive roster of customers: Cloud services provider Equinix, cloud-based productivity app Evernote, travel site Priceline, ServiceNow, Twitter, Zendesk and Zynga.