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Microsoft's Activision Blizzard Deal Won't Hurt Sony's PlayStation Business
Sony's (NYSE:SONY) stock recently tumbled to a three-month low after Microsoft (NASDAQ:MSFT) announced its planned takeover of Activision Blizzard (NASDAQ:ATVI) for $68.7 billion. Sony's stock dropped for two simple reasons -- investors assumed Microsoft would add Activision's games to its subscription-based Game Pass service and that it would turn Activision's future games into exclusives for Xbox consoles and Windows PCs.To get more microsoft updates, you can visit shine news official website.
That initially seems like a one-two punch for Sony's gaming and network services (G&NS) business, which generated 27% of its revenue and 28% of its operating profits in the first half of fiscal 2021. But if we take a closer look at this massive deal, we'll see that those fears are largely overblown.It's easy to assume that Microsoft will cut Sony out of the loop and keep Activision's games for itself, but contractual obligations will likely prevent that from happening anytime soon.
For example, many people assumed Microsoft would turn Bethesda's new games into Xbox exclusives right after buying the publisher of Doom, Fallout, and The Elder Scrolls last March. That hasn't happened yet. Instead, Bethesda still launched Deathloop as a timed PS5 exclusive last September, and it will do the same with Ghostwire: Tokyo later this year.
Those releases indicate Bethesda still needs to honor its existing contracts with Sony, even if Microsoft already owns its parent company ZeniMax Media. Sony likely holds similar contracts with Activision for timed exclusives and cross-platform games. In a statement issued to The Wall Street Journal, Sony said that it expected Microsoft to "abide by contractual agreements and continue to ensure Activision games are multiplatform."
Microsoft also doesn't seem to be in a hurry to lock in Activision's games. In a press release, Microsoft's gaming chief Phil Spencer pointed out that Activision's games were "enjoyed on a variety of platforms" and that it would continue to support those communities moving forward.Microsoft and Sony both launched their newest gaming consoles in November 2020, but Microsoft remains an underdog in the console race.
Microsoft has only shipped 11.9 million Xbox Series consoles so far, compared to Sony's 18.0 million PS5 shipments. Sony was also the victor of the previous console generation, with its 116.8 million PS4 shipments easily beating Microsoft's 50.5 million Xbox One shipments.
Activision's Call of Duty 3: Black Ops 3 was the fifth best-selling game on the PS4, with 15.1 million units shipped worldwide. It was also the second best-selling game on the Xbox One with 7.4 million shipments.
That huge gap highlights a dilemma for Microsoft: Would it be smarter to generate stable revenues from PlayStation players with new Activision games, or should it sacrifice those revenues to boost its hardware sales with Xbox-exclusive titles? The first choice makes a lot more sense since Microsoft and Sony both sell their games at much higher margins than their consoles.
Microsoft might eventually launch an Xbox-exclusive Call of Duty game, but it's highly doubtful that Activision will stop selling PlayStation games altogether.Shortly after Microsoft announced its plans to buy Activision, the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) launched a joint review of the country's antitrust merger guidelines.
The timing of that announcement, along with the DOJ and FTC's ongoing probes of other tech giants, indicates Microsoft's takeover of Activision Blizzard -- which will make it the third-largest gaming publisher in the world by annual revenue after Tencent and Sony -- will be closely scrutinized.
Turning Activision's games into Xbox exclusives would likely cause the DOJ and FTC to take a much closer look at the deal, so it makes more sense for Microsoft to remain on good terms with Sony for the time being.
Intel project provides proof of Ohio’s value
Some will argue quite convincingly that America has struggled to keep up with competing nations in technological advances and the manufacturing that comes with them.To get more latest news on intel, you can visit shine news official website.
Ohio took an enormous step last week in overcoming that struggle, advancing not only our state, but our nation, in production of semiconductor chips used in the manufacture of everything from phones to automobiles, and from appliances to video games.
Chip shortages fueled by business shutdowns during the pandemic have interrupted production of new vehicles and electronic devices for more than a year. Not only has it disrupted the U.S. economy, it has created a vulnerability in our nation’s defense since eight of every 10 chips are produced in Asia. Industry experts predict demand for these chips only stands to grow greater because of the development of more and more electronic devices requiring them.
We recently used this space to point out the struggles that have come from America’s tendency to send manufacturing overseas. Those decisions have been exacerbated with supply chain struggles that have touched all of us in recent months.
Ohio, which already has done an outstanding job in the aspect of reshoring, scored another giant win last week when it was announced that a suburb of Columbus had been chosen by Intel as home to a new $20 billion (yes, billion with a “B”) operation in two factories on a 1,000-acre site in Licking County, just east of Columbus. The two new factories, called fabs, are expected to create 3,000 company jobs — many of them highly skilled — and 7,000 construction jobs. The facility will support tens of thousands of additional jobs for suppliers and partners, Intel and local and state officials said Friday.It will help alleviate a global shortage of chips while also signaling the giant company’s commitment to manufacturing crucial technology products in the U.S. The move also could create a new technology hub in central Ohio as related businesses that support chip manufacturing open new facilities and bring expertise to the region.
This business currently is dominated by Taiwan. Chips built here in Ohio won’t just reduce supply chain pressures, but will also bolster U.S. national security while bringing more tech jobs to the region.This huge win is proof that Ohio is continuing to move in the right direction.
A report released just last September by Reshoring Initiative, a U.S.-based initiative that promotes reshoring and provides tools and support for companies evaluating locations, had ranked Ohio No. 1 to that point in reshoring announcements, with 37 companies totaling 12,423 jobs.
That report had indicated that most of the jobs coming back to America’s shores are in the fields of transportation equipment, primarily in electric-vehicle battery production.Now, we are well aware that Intel’s decision to come to Ohio brings incredibly significant benefit to all Ohioans.First, the chips soon being manufactured in nearby Columbus will very likely be of great benefit in the growing local manufacture of electric vehicles.Additionally, to support a well-trained workforce, Intel is committing $100 million to partnerships with local educational institutions including Ohio universities, community colleges and the U.S. National Science Foundation.
In all, the project is expected to add $2.8 billion to Ohio’s annual gross state product, Gov. Mike DeWine said.
The hard work by Ohio officials and economic development experts in landing this incredible project must be saluted.
Success breeds success. A growing Intel presence in our state will make it that much easier to attract advanced-manufacturing talent and capital to Ohio. Undoubtedly, this project will send a very direct message that Ohio is high-tech and open for business.
It also should send an equally strong message to all Ohio cities and regions, including our Mahoning Valley, that we must think big. Intel’s selection of Ohio is proof positive that anything is possible.