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Nvidia Says Sales of Video Game Chips to Decline in Current Quarter Due to COVID-19

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By Reuters | Updated: 26 May 2022

Chip designer Nvidia forecast its sales of video game chips would decline in the current quarter, and startled some analysts by laying out new supply-chain issues resulting from China’s COVID-19 lockdowns.

Chief executive Jensen Huang told Reuters that Nvidia’s gaming business revenue will post a percentage drop in the mid-teens for the current quarter compared with the previous quarter.

“Overall the gaming market is slowing,” Huang said. Based on the softer market demand, Nvidia has chosen to reduce what it sells into the China market, he said. Nvidia is also taking a hit from Russia and sees “slower sell-through” in Europe, he said.

Nvidia shares fell 6.7 percent in extended trading, even though the company’s first-quarter revenues and earnings topped analyst estimates. The shares are down about 40 percent so far this year in tandem with a wider selloff in growth stocks over concerns of aggressive interest rate increases by the US Federal Reserve.

Concerns over inflation are spreading through the US economy, as consumers weigh purchases of items such as laptops and video game consoles.

Nvidia forecast second-quarter revenue of $8.10 billion (roughly Rs. 62,842 crore), plus or minus two percent. Analysts on average expected $8.45 billion (roughly Rs. 65,557 crore), according to IBES data from Refinitiv. The lower revenue forecast included an estimated reduction of about $500 million (roughly Rs. 3,879 crore) relating to Russia and the COVID lockdowns in China. Chief financial officer Colette Kress said the $500 million figure included about $400 million (roughly Rs. 3,103 crore) lost in gaming sales in China and Russia, and another $100 million lost in data center sales in Russia.

Kress told analysts on the earnings call that China’s COVID lockdowns, in addition to affecting logistics, were hitting consumer spending.

Dan Morgan, senior portfolio manager at Synovus Trust, said it was puzzling that a company that navigated the supply hurdles so well up to now suddenly hit a bump in the road.

Kinngai Chan, analyst at Summit Insights Group, said almost every tech company that has missed on outlook has blamed the Russia-Ukraine conflict and China’s COVID lockdowns. He expected Nvidia to face more downturns going forward.

One analyst was more optimistic.

“The pullback after hours is an overreaction to geopolitical events outside of the company’s control, not a weakening demand environment,” said Logan Purk, analyst at Edward Jones, noting the tumble in Nvidia’s share price.

Weaker prices for graphics chips and lower discretionary spending amid high inflation are likely to pressure Nvidia’s gaming business, according to experts.

A rout in the cryptocurrency market also hurt demand for its graphics processing units, which are favored by miners of cryptocurrency. Kress, the CFO, said in a statement on Wednesday that Nvidia had a 52 percent year-over-year decline in its “OEM and other revenue” category due to a drop in revenue from processors for cryptocurrency mining.

Still, demand from data center clients remained strong as more firms shift to the cloud and incorporate artificial intelligence in their operations. That and automotive sales will help offset the decline in gaming, said Kress. Data center revenue for the first quarter marked a record $3.75 billion (roughly Rs. 29,097 crore), up 83 percent year on year. Gaming revenue in the first quarter was also a record $3.62 billion (roughly Rs. 28,086 crore), up 31 percent year on year.

Revenue for the first quarter ended May 1 rose 46 percent to a record $8.29 billion (roughly Rs. 64,320 crore). Excluding items, the company earned $1.36 (roughly Rs. 105) per share, beating estimates of $1.29 (roughly Rs. 100).

© Thomson Reuters 2022

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Google Stadia to Shut Down in January 2023, Company to Refund Hardware Purchases: All Details V

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By Agence France-Presse | Updated: 30 September 2022

Google on Thursday said it is shutting down Stadia, the cloud video game service it launched three years ago to let people access console-quality play as easily as they do email.

“It hasn’t gained the traction with users that we expected so we’ve made the difficult decision to begin winding down our Stadia streaming service,” Google vice president Phil Harrison said in a blog post.

Google said it will refund purchases of Stadia hardware, such as controllers, as well as game content bought through its online store, and that players will have access to the service through January 18 of next year, he added.

“They had a great idea and a bad business model,” Wedbush Securities analyst Michael Pachter said of Stadia.

“They tried to offer the service as a subscription without games.”

Xbox-maker Microsoft, meanwhile, offered a rival Game Pass service “with a ton of games,” making it a more tempting option for players, Pachter said.

Game Pass has some 25 million subscribers, while Stadia has fewer than a million, the analyst noted.

Microsoft is considered the streaming video game heavyweight with its Xbox Game Pass service and large community of players who use its consoles and desktop computers.

The Redmond, Washington-based company also has a stable of video game studios.

And while Microsoft makes Xbox video game consoles, it has been leading a shift to letting people play titles on Internet-linked devices of their choosing with titles hosted in the cloud.

Microsoft recently announced that the ability to play Xbox games will be built into Samsung smart televisions in its latest cloud gaming move.

“We’re on a quest to bring the joy and community of gaming to everyone on the planet, and bringing the Xbox app to smart TVs is another step in making our vision a reality,” Microsoft Gaming chief Phil Spencer said in a post.

Microsoft catapulted itself into the big league in one of the world’s most lucrative markets early this year by announcing a $69 billion (roughly Rs. 5,62,730 crore) deal to take over video game maker Activision Blizzard – the biggest acquisition in the sector’s history.

Amazon early this year launched its Luna video game streaming service for the general public in the United States, aiming to expand its multi-pronged empire into the booming gaming industry.

Luna allows players to access games directly online with no need for a console as part of the cloud gaming technology that is seen as a future direction of the industry.

Luna takes on Microsoft and PlayStation-maker Sony as well as Stadia.

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Take-Two’s Grand Theft Auto VI gameplay leaked online – Bloomberg News

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By: Reuters, Updated September 19, 2022

Sept 18 (Reuters) – A hacker released gameplay from Take-Two Interactive Software Inc’s (TTWO.O) Grand Theft Auto VI in one of the biggest leaks in gaming history, Bloomberg News reported on Sunday.

Dozens of authentic, pre-release videos from GTA VI – of robberies, gunplay and open-world driving – were posted on an online message board over the weekend, media reports said.

The hacker also posted a message seeking to “negotiate a deal” and asked Rockstar Games or parent company Take-Two to contact them, according to the Bloomberg report

Rockstar Games, a video game studio owned by Take-Two, is the developer of Grand Theft Auto, one of the best-selling videogame franchises of all time.

Take-Two Interactive did not respond to a Reuters request for comment outside regular business hours.

The hotly anticipated GTA VI is estimated to generate $3.5 billion of bookings at launch and an average of $2 billion annually thereafter, according to Bank of America.

The release could offer a much-needed boost to the U.S. gaming company, which forecast weak annual sales in August in a sign that a thin slate of major releases and easing COVID-19 curbs have reined in the industry’s pandemic-era boom.

The gaming industry, considered by some analysts as “recession proof”, has started to see some weakness as inflation-hit consumers rein in spending on entertainment.

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Microsoft’s $69 billion Activision deal in UK’s crosshairs

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By: Bloomberg, September 15, 2022

Microsoft Corp.’s planned $69 billion purchase of computer games developer Activision Blizzard Inc. faces an in-depth probe in the UK after regulators said the deal could hamper competition.

The Competition and Markets Authority said it decided to kickstart a longer review after Microsoft turned down the chance to offer remedies to address its concerns.

“Microsoft informed the CMA that it would not offer such undertakings,” the regulator said in its decision.

The move was expected after the CMA previously flagged concerns the deal could lead to a substantial lessening of competition in the gaming console, subscription and cloud markets. The regulator now has until March 1 to come to a final decision.

The combination with Activision — which owns some of the most popular franchises including Call of Duty, World of Warcraft and Guitar Hero — will make Microsoft the world’s third-largest gaming company and boost the Xbox maker’s roster of titles for its Game Pass subscribers.

“We’re ready to work with the CMA on next steps and address any of its concerns,” Brad Smith, Microsoft president and vice chair, said in a Sept. 1 statement.

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Video game maker CD Projekt to launch Cyberpunk expansion with Keanu Reeves

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By: Reuters, September 6, 2022

GDANSK, Sept 6 (Reuters) – Poland’s biggest video game maker CD Projekt (CDR.WA) brought in Hollywood star Keanu Reeves as it announced the title of its first expansion to a flagship game Cyberpunk 2077 on Tuesday.

The expansion titled “Phantom Liberty” is set to premiere next year on PlayStation 5, Xbox Series X|S, PC and Stadia, the company said during a stream on videogame live-streaming platform Twitch.

Reeves, who plays a rebel rockerboy Johnny Silverhand in the game, appeared during the stream and will be returning in the expansion, along with new characters, CD Projekt said.

CD Projekt releases major high-budget games every four to five years and in between those titles it often publishes expansions to the games. The company did not mention a specific release date.

The company also said it had launched patch 1.6 to Cyberpunk, which will be the last major update available for older generation consoles.

Delayed three times, Cyberpunk, was one of the most anticipated games in 2020, but after a bug-ridden premiere it was kept off of Sony’s (6758.T) PlayStation Store for six months.

In April, the company said it sold over 18 million copies of the game.

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Sony to buy mobile game developer in push beyond consoles

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By Reuters | Updated: 30 August 2022

Sony Group Corp on Monday said it will acquire Helsinki and Berlin-based mobile games business Savage Game Studios for an undisclosed amount as part of a major push by the Japanese conglomerate beyond console gaming.

Sony’s gaming chief Jim Ryan in May outlined plans to radically broaden the games portfolio beyond the PlayStation 5 console and the group’s focus on single player games with more releases on PC and mobile.

Savage Game Studios, which was established two years ago and is working on a live service action title for mobile, will become part of a new mobile division of PlayStation Studios, Sony said in a statement.

The entertainment conglomerate hopes to tap into more consumer spending on gaming by expanding on other platforms while also defending against technological shifts that are loosening ties to bulky hardware.

“PlayStation Studios must continue to expand and diversify our offering beyond console, bringing incredible new games to more people than ever before,” said Hermen Hulst, head of PlayStation Studios.

Sony is struggling to produce enough PS5 consoles to meet demand amid supply chain snarls and last week announced a price hike in many markets due to pressure from a strengthening dollar.

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Online Gaming Platforms Involving Game of Chance Treated as Illegal, MoS IT Says

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By Agencies | Updated: 3 August 2022

Betting and gambling are unlawful in most parts of the country and online gaming platforms are treated as illegal when game of chance is involved in those platforms, Parliament was informed on Wednesday. Minister of State for Electronics and IT Rajeev Chandrasekhar, in a written reply in the Lok Sabha, said all forms of gambling and betting come under the purview of state governments and they have enacted laws to deal with the same within their jurisdiction under List-II of the Seventh Schedule of the Indian Constitution.

“Betting and gambling is illegal in most parts of the country. Online gaming platforms are intermediaries and they have to follow the due diligence as prescribed in the Information Technology (IT) Act, 2000 and the Rules thereunder.

“MeitY regulates all the intermediaries as per the IT Act and the Rules therein. Online gaming platforms are treated as illegal when game of chance is involved in those platforms,” the minister said.

In response to a question on steps being taken by the government to prevent crimes occurring due to spread of online gambling and betting, Chandrasekhar said ‘police’ and ‘public order’ are state subjects and states and union territories are primarily responsible for the prevention, detection, investigation and prosecution of crimes through their Law Enforcement Agencies (LEAs).

“The Law Enforcement Agencies (LEAs) at Centre and States take appropriate legal action as per provisions of law and when appropriate,” the minister said.

Last month, the Battlegrounds Mobile India, or BGMI, was reportedly removed from the Google Play store and Apple’s App Store following a government order. Google confirmed that it received a government order directing it to delist the popular online game, which is yet to be reinstated on both platforms.

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