- The Core
- Posts
- Game over for Microsoft-Activision?
Game over for Microsoft-Activision?
Also in today’s edition: Car sales are revving up; A peek at the Salesforce-Slack drama; SBF’s trial by fire; Korean webtoons > Japanese manga
Good morning! Age may be just a number, but it’s a source for mayhem in South Korea. The country has not one, not two, but three ways of measuring age. There’s “international age”, which starts at zero from your date of birth; “Korean age”, which starts at one instead of zero—effectively making locals at least a year older than their international age; and “calendar age”, which adds a year to people’s ages every January 1 instead of their birthdays. The New York Times reports that ambiguity around age-counting methods complicated everything, from insurance payouts to Covid vaccine eligibility. Thankfully, the South Korean government just passed a law to standardise ages per the international system.
🎧 The United Kingdom's educational institutions need Indian students to solve the cash crunch. The Great Recession has come for influencers. The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.
The Market Signal*
Economy & Stocks: It’s that time again when Jerome Powell hogs headlines. The rate-setting committee of the Federal Reserve, which Powell chairs, is meeting and will announce a decision mid-week. The last rate decision of the year will likely set the tone for 2023. The US labour market is so hot now that several companies are hiring without job interviews, The Wall Street Journal reports.
Indian indices lost over 1% value last week. Domestic equities are likely to take cues from global markets in the week ahead.
Early Asia: The SGX Nifty slumped (-0.22%) from its previous close at 7.30 am India time. The Hang Seng Index (-1.06%) and Nikkei 225 (-0.25%) were also in the red.
AUTOMOBILES
The Sum Of Parts Is Looking Good
There is much excitement in the auto industry as it transitions from the century-old internal combustion engine to the electric motor. And when an industry shifts, the ecosystem transforms too.
Revving up: Swelling order books have encouraged component makers to plonk down about $2 billion to $3 billion in the next couple of years to set up new production lines and factories.
Although Indians are buying more EVs—sales are expected to cross a million in the year ending March 2023, an 84% rise over the previous year—component makers are also eyeing overseas markets. Automakers such as Fiat, Renault, and Daimler are looking at India, famous for its frugal engineering, as a source for ancillaries.
No slow: The IC engine is not doing too badly, either. November was the best month ever for retail auto sales save for March 2020.
A MESSAGE FROM OUR PARTNER
Would You Like Your Hand Held?
Mercedes-Benz’s chief of marketing recently lamented that he was unable to sell more cars because Indians’ preferred dowdy SIPs to his glamorous wheels. Well, Indians know saving is a good habit, and they now have a range of instruments available to them to make money grow. Yet, there was no reliable investment management platform.
Until now, that is.
THE platform: InvestMates is India’s first credible platform supported by experts where influencers and investors can build a community. InvestMates’ mission is to help investors learn, share and grow.
Knowledge back-up: Investors get portfolio insights, analytics with risk profile, and diversification tips. They receive personalised & curated content. Beginner’s get expert guides.
Strong filters: Only verified users are allowed, minimising the risk of scams, fakes and FOMO. Financial creators & influencers get analytics and growth tools to manage and monetise their communities.
ACQUISITIONS
The Slack Sale Has No Force
A match made in heaven now seems destined to burn in hell. The resignation of Salesforce co-CEO Bret Taylor has exposed the deep fissures in the company’s $28 billion acquisition of Slack. Moreover, founder-CEO Marc Benioff and Slack CEO Stewart Butterfield, who don’t see eye to eye, had Taylor to smoothen things out (or at least try to).
Internal resistance: Salesforce executives objected to the purchase of Slack, The Information reports. Sales teams were sceptical of bundling and selling, since many clients were already using Microsoft Teams. Technical teams had competing priorities between their own product development and Slack integration. For now, Benioff's vision of an OS for work seems far off.
Salesforce recorded its lowest revenue growth since it went public some two decades ago. Slack contributed to only 5% of its quarterly sales—a far cry from the 70% premium paid for its acquisition.
GAMING
Microsoft’s Biggest Deal May Not Go Through
That’s if the Federal Trade Commission (FTC)—which sued to block the Redmond-headquartered company’s $75 billion acquisition of Activision Blizzard King (ABK)—has its way. Under current chair Lina Khan, the US antitrust watchdog has adopted a hawkish approach against tech majors and killed several mergers since 2021.
The Microsoft-ABK merger was to close by June 30 next year. The FTC trial is due in August 2023, with a decision likely only in 2024. This means the regulator may file a separate suit halting the closure until after the hearing.
In vain: The development is also a blow to Microsoft’s lobbying offensive. Unlike its Big Tech peers, Microsoft presented itself a regulator-friendly company and even courted labour unions.
The Signal
The largest gaming deal ever is also under the scanner in the EU and UK. Microsoft’s raft of gaming acquisitions, from Doom and Elder Scrolls’ parent ZeniMax Media to Call Of Duty and Candy Crush parent ABK, triggered pushback from Sony, Microsoft’s nemesis in the console wars. Its assurances that competitors will have access to Call Of Duty haven’t worked; never mind that Sony itself has long played the exclusivity game.
Activision chief Bobby Kotick is confident the deal with Microsoft will close. If it doesn’t, it’ll be more Microsoft’s loss than ABK’s. Mobile titles are ABK’s golden goose. Losing that will put Microsoft—which wants its own gaming app store and platform interoperability (going beyond consoles and PCs and doubling down on mobile and cloud)—in hot water.
CRYPTOCURRENCIES
A Sector Braces For Its Biggest Test Yet
Come December 13, Sam Bankman-Fried (SBF)—the disgraced former CEO of bankrupt exchange FTX and hedge fund Alameda Research—will appear in a US House Financial Services Committee hearing on FTX’s collapse. Hearings by other regulators will follow. Regardless of outcomes, they will have a resounding impact not only on crypto prices, but legislation as a whole. The US Federal Reserve, for instance, is working on “guidance and clarity” for traditional finance institutions engaging in crypto activities. Expect tighter controls for stablecoins, too.
In other news: Axios reveals that “independent” crypto news platform The Block wasn’t editorially independent after all. SBF funnelled money, at least $16 million worth, to CEO Michael McCaffrey.
Overcompensating?: Binance chief Changpeng Zhao or CZ is still trading barbs with SBF, although the ethical grandstanding doesn’t take away from concerns about his own opaque internal controls.
ENTERTAINMENT
South Korea’s Webtoons Are Lighting Up Screens
It’s emerging as the next big thing.
Gold rush: GVA Asset Management invested $15 million in online cartoon firm Kenaz, with the belief that Americans and Europeans will become webtoon converts. The hedge fund manager is partly right.
Korean webtoon platform Tappytoon hosts 78.6% of US readers as of November 2022. It’s possibly why Saudi Arabia and Singapore may invest ~$592 million in South Korean internet giant (and webtoon maker) Kakao Entertainment, as it plans to hit the bourses next year.
Heat is on: The 1997 Asian financial crisis catalysed investments in the South Korean webtoon industry, but the pandemic spurred wider adoption. We wrote about it here in March 2022.
As a result, manga is suffering an existential crisis. Legacy publisher Kadokawa is now playing catch up and will create webtoons for the Japanese market in order to expand revenue streams and discover webtoon makers.
FYI
Just a cold?: China’s top medical adviser, Zhong Nanshan, played down the risks of Covid-19, saying the fatality rate of the Omicron variant of the virus is 0.1%—similar to the common flu.
Grounded: Air India is either delaying or cancelling long-haul flights, to destinations such as San Francisco and Vancouver, due to cabin crew shortages.
Et tu?: LinkedIn detected and removed more than 21 million fake accounts in the first six months of 2022, a 28% jump compared with the previous six-month period.
Red signal: Paytm cannot use proceeds of its mega IPO for the proposed repurchase of its own shares.
It’s come home: Nasa’s Orion capsule, which was on a three-week journey around the Moon, has successfully splashed down in the Pacific Ocean off California.
‘We aren’t serious’: After backlash on social media, Hindustan Unilever brand Vim clarified that it isn’t actually coming out with a dishwashing liquid for men.
Deal?: Tata Group may set up to 100 exclusive Apple stores to sell iPhones, iPads, and watches in India. With this, Infiniti Retail, the folks behind Croma, will become an Apple franchisee partner.
THE DAILY DIGIT
12 billion
The number of times the videos earmarked under #FifaWorldCup have been viewed on TikTok. (BBC)
FWIW
Fast-track: The job interview is no more a jitter-fest in the US labour market. Companies such as UPS, Home Depot, and Gap have dropped the interview process *and* are getting back to potential hires within a day. The need for extra hands during the holiday season could be one reason. Amazon maintains it was always part of its company policies to hire hourly workers without interviews. At Macy's, getting a job during the peak could take as little as five minutes. Talk about being productive!
Pick or ditch: We'd like to put this debate to bed: do you use a top sheet? The answer may reveal which generation you belong to. Turns out that flat top sheets are being discarded by Gen Zs and millennials. Gen X and baby boomers are shaking their heads in disapproval. Getting rid of the top sheet means having to do one less chore in the morning. But, but, a duvet may need cleaning every few weeks, and it's much easier to plonk a sheet in the laundry. If you’re Team Top Sheet, we'd like to hear from you.
Jumping in: An album that exclusively features croaks and calls of frogs from Australia is gaining traction. It’s now at the number three spot, just behind Taylor Swift and Paul Kelly on Aria, Australia's music charts. Created by the Bowerbird Collective, the project hopes to raise funds for frog conservation. The team's previous album on Australian bird calls raced to the second spot last year. If you're curious, here's the link.
Enjoy The Signal? Consider forwarding it to a friend, colleague, classmate or whoever you think might be interested. They can sign up here.
Do you want the world to know your story? Tell it in The Signal.
Write to us here for feedback on The Signal.