Was their tech really that advanced? To me activ8's only accolade is being the people who popularized this virtual personality thing and put a name on it. But the tech was already there, full body motion capture had been a thing since the 90s, there had been a good handful of corpos who had used virtual characters as mascots before.What kinda company was Activ8 back then? Nowadays it's clearly entertainment (more specifically, pretending to be relevant by pointing at its past trendsetting role and current failures without mentioning the "Failure" part), but if they were initially a tech company doing tech demonstration (which I believe is the case, but I cannot actually find anything clearly stating this), them fumbling after stumbling on the entertainment line is understandable.
I mean, it can clearly be done better, as demonstrated by Cover, but Activ8's tech was so far ahead of its competition, there's an implication of tech being thoroughly entrenched and entertainment just not being considered the point of the company at all.
That Upd8 only became a thing after Hololive, Nijisanji and .LIVE all already ran half a dozen talents or more rather demonstrates how much of an afterthought entertainment was.
While it clearly fumbled an opportunity, it's more understandable if their undeniably cutting edge tech was actually theirs (Cover's tech was theirs, of course, but cutting edge... uh, yeah. No). It'd mean that they genuinely put in the engineering work first, everything else was just for showing off said work.
The problem with that approach being, of course, that there's no obvious monetisation avenue. And with engineering being so highly entrenched and genuinely intensive in terms of manpower and finances, swerving towards entertainment was a lot harder for them than it was for Cover's literal handful of people on a budget made of dreams and wishful thinking.
Profitability would also have been more difficult to achieve since the money input was so much greater.
tl;dr: Activ8 may arguably have failed because its tech was too good.
Kizuna's deal was tapping into a more personalized experience, she wasn't just some corpo mascot or a bot manipulating a human voice like Miku.
But even then vtubers in that era were a different beast to what they are now. A lot of the customs, culture and expectations we have today only come into widespread usage after other corpos began jumping on it.
Activ8 failed because they refused to adapt to changes introduced by their competition, and they had absolutely god awful, worthless management.
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