By Reuters | Updated: 2 November 2022
Electronic Arts (EA) lowered its annual bookings forecast on Tuesday as the publisher of FIFA and Apex Legends struggles with this year’s surge in the US dollar and a gaming industry slowdown from pandemic heights. The company now expects annual bookings – an indicator of future revenue – between $7.65 billion (roughly Rs. 63,280 crore) and $7.85 billion (roughly Rs. 64,930 crore), compared with $7.90 billion (roughly Rs. 65,350 crore) to $8.10 billion (roughly Rs. 67,000 crore) earlier.
After a meteoric rise during the pandemic, video game sales have been easing this year due to a lack of major releases and lower spending by consumers facing decades-high inflation.
That, coupled with the industry’s prolonged supply-chain challenges, also pressured quarterly revenue from Sony’s PlayStation 5 and Microsoft’s Xbox content and services.
Overall, the gaming market is expected to grow just 2 percent in 2022, according to data from research firm Newzoo, a far cry from 2020’s 23 percent jump.
A near 17 percent rise in the US dollar this year has also stifled growth, with EA forecasting a roughly $200 million (roughly Rs. 1,650 crore) hit to annual bookings. The company earns more than half of its revenue from outside the US. But EA, which had no major releases in the first three quarters of 2022, could get some support from the October launch of FIFA 23 – the latest instalment in its popular football franchise.
FIFA 23 had the best launch week of any game in the series, and it looks set for more demand thanks to the soccer World Cup in Qatar next month. EA booked second-quarter adjusted sales of $1.75 billion (roughly Rs.14,475 crore), missing the $1.80 billion (roughly Rs. 14,890 crore) expected by analysts, according to Refinitiv data.
Net income rose to $299 million (roughly Rs. 2,470 crore), or $1.07 per share, from $294 million (roughly Rs. 2,430 crore), or $1.02 (roughly Rs. 85) per share, a year earlier.
© Thomson Reuters 2022
Microsoft Could Face FTC Antitrust Lawsuit to Block Activision Blizzard Takeover Bid: Report
By Reuters | Updated: 24 November 2022
The US Federal Trade Commission (FTC) is likely to file an antitrust lawsuit to block Microsofts $69 billion (roughly Rs. 5,63,500 crore) takeover bid for video game publisher Activision Blizzard, Politico reported on Wednesday, citing people familiar with the matter. A lawsuit challenging the deal is not guaranteed, and the FTC’s four commissioners have yet to vote out a complaint or meet with lawyers for the companies, the report said, adding that the FTC staff reviewing the deal are skeptical of the companies’ arguments. The FTC did not immediately respond to requests for comment from Reuters.
“We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won’t hesitate to fight to defend the transaction if required,” an Activision Blizzard spokesperson said. Any suggestion that the transaction could lead to anticompetitive effects is “completely absurd,” the spokesperson added.
Shares of Activision fell about 2 percent in extended trading after closing 1% higher.
Microsoft, maker of the Xbox game console, announced in January the deal to buy Activision, the maker of Call of Duty and Candy Crush games, in the biggest gaming industry deal in history as global technology giants staked their claims to a virtual future.
Microsoft is betting on the acquisition to help it compete better with videogame leaders Tencent and Sony.
The deal is also facing scrutiny outside the US. The EU opened a full-scale investigation earlier this month. The EU competition enforcer said it would decide by March 23, 2023, whether to clear or block the deal.
Britain’s antitrust watchdog in September said it would launch a full-scale probe.
The acquisition could damage the industry if Microsoft refused to give rivals access to Activision’s best-selling games, Britain’s antitrust regulator has said.
The deal has drawn criticism from Sony, maker of the Playstation console, citing Microsoft’s control of games like Call of Duty.
“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation,” Microsoft President and Vice Chair Brad Smith has said.
A spokesperson for Microsoft said: “We are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence. We’ll still trail Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers and make the industry more competitive.”
© Thomson Reuters 2022
Activision Blizzard to Suspend China Game Services After NetEase Licenses End in January
By Reuters | Updated: 17 November 2022
Activision Blizzard said on Thursday it would suspend most Blizzard game services in mainland China once its current licensing agreements with NetEase end in January.
Blizzard Entertainment said it was unable to reach a deal with the Chinese Internet and gaming giant that was “consistent with Blizzard’s operating principles and commitments to players and employees.”
Hangzhou-based NetEase said in a Chinese statement that it was unable to agree on key terms of cooperation and added, in a second statement in English, that the expiration of the licenses would have no “material impact” on its financial results.
NetEase’s share price slid about 11 percent in morning trading in Hong Kong, pulling back slightly from a steeper drop following the announcement.
NetEase has become China’s second-biggest gaming company behind Tencent in large part due to its status as Blizzard’s publishing partner in China since 2008-2009 when Blizzard ended its deal with The9.
California-based Blizzard said new sales would be suspended in the coming days and players would receive further details.
The games to be suspended from January 23 include World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch, the StarCraft series, Diablo III, and Heroes of the Storm.
According to NetEase, the recently published Diablo Immortal, co-developed by NetEase and Blizzard, is covered by a separate long-term agreement, allowing its service to continue in China.
NetEase said Blizzard’s games contributed a low-single-digit percentage to its total net revenue and net income in 2021 and the first nine months of 2022.
The absence of Blizzard games could lower NetEase’s revenue by 6-8 percent next year, Daiwa Capital Markets wrote in a research report on November 9. The calculation was based on its estimate that licensed games account for around 10 percent of NetEase’s total revenue and Blizzard accounts for 60-80 percent of licensed games.
China’s massive gaming industry, once marked by unbridled growth, has been heavily bruised by Beijing’s efforts to tighten its oversight of the sector, including by reducing the number of gaming licenses given out and limiting play time for teens.
Blizzard Entertainment said upcoming releases for World of Warcraft: Dragonflight, Hearthstone: March of the Lich King, and season 2 of Overwatch 2 will proceed later this year.
“We are looking for alternatives to bring our games back to players in the future,” Blizzard President Mike Ybarra said in the statement.
NetEase’s Nasdaq-listed shares have nearly halved to about $71 (roughly Rs. 5,800) from their February 2021 peak of $132 (roughly Rs. 10,800).
© Thomson Reuters 2022
Microsoft Faces Full EU Antitrust Investigation Into $69 Billion Bid to Acquire Activision Blizzard
By Reuters | Updated: 9 November 2022
Microsoft may have to offer concessions to address EU antitrust concerns about its $69 billion (roughly Rs. 5,62,500 crore) bid for Call of Duty maker Activision Blizzard after regulators opened a full-scale investigation on Tuesday and warned about the impact of the deal. The US software company, which announced the deal in January, is betting Activision’s stable of games will help it compete better with leaders Tencent and Sony, with the latter critical of the deal.
“The Commission’s preliminary investigation shows that the transaction may significantly reduce competition on the markets for the distribution of console and PC video games, including multigame subscription services and/or cloud game streaming services, and for PC operating systems,” the European Commission said in a statement.
“The preliminary investigation suggests that Microsoft may have the ability, as well as a potential economic incentive, to engage in foreclosure strategies vis-à-vis Microsoft’s rival distributors of console video games,” it added.
Microsoft said it would work with the EU antitrust watchdog to address valid marketplace concerns.
“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less,” a Microsoft spokesperson said.
The EU competition enforcer said it would decide by March 23, 2023, whether to clear or block the deal. Reuters reported on October 31 that Microsoft would face an extensive EU probe after declining to offer remedies during the preliminary EU review of the deal.
Britain’s antitrust watchdog is also investigating the acquisition, with similar concerns to its EU peer.
© Thomson Reuters 2022
Video Games Shown to Improve Children’s Cognitive, Memory Skills in New US Study
By Agence France-Presse | Updated: 25 October 2022
Parents often worry about the harmful impacts of video games on their children, from mental health and social problems to missing out on exercise.
But a large new US study published in JAMA Network Open on Monday indicates there may also be cognitive benefits associated with the popular pastime.
Lead author Bader Chaarani, an assistant professor of psychiatry at the University of Vermont, told AFP he was naturally drawn to the topic as a keen gamer himself with expertise in neuroimagery.
Prior research had focused on detrimental effects, linking gaming with depression and increased aggression.
These studies were however limited by their relatively small number of participants, particularly those involving brain imaging, said Charaani.
For the new research, Chaarani and colleagues analyzed data from the large and ongoing Adolescent Brain Cognitive Development (ABCD) Study, which is funded by the National Institutes of Health.
They looked at survey answers, cognitive test results, and brain images from around 2,000 nine- and ten-year-olds, who were separated into two groups: those who never played games, and those who played for three hours or more a day.
This threshold was chosen as it exceeds the American Academy of Pediatrics screen time guidelines of one or two hours of video games for older children.
Impulses and memory
Each group was assessed in two tasks.
The first involved seeing arrows pointing left or right, with the children asked to press left or right as fast as they could.
They were also told to not press anything if they saw a “stop” signal, to measure how well they could control their impulses.
In the second task, they were shown people’s faces, and then asked if a subsequent picture shown later on matched or not, in a test of their working memory.
After using statistical methods to control for variables that could skew results, such as parental income, IQ, and mental health symptoms, the team found the video gamers performed consistently better on both tasks.
As they performed the tasks, the children’s brains were scanned using functional magnetic resonance imaging (fMRI). Video gamers’ brains showed more activity in regions associated with attention and memory.
“The results raise the intriguing possibility that video gaming may provide a cognitive training experience with measurable neurocognitive effects,” the authors concluded in their paper.
Right now it’s not possible to know whether better cognitive performance drives more gaming, or is its result, said Chaarani.
The team hope to get a more clear answer as the study continues and they look again at the same children at older ages.
This will also help exclude other potential factors at play such as the children’s home environment, exercise and sleep quality.
Future studies could also benefit from knowing what genres of games the children were playing — though at age 10 children tend to favour action games like Fortnite or Assassin’s Creed.
“Of course, excessive use of screen time is bad for overall mental health and physical activity,” said Chaarani.
But he said the results showed video games might be a better use of screen time than watching videos on YouTube, which has no discernible cognitive effects.
Is PS Plus better than Xbox Game Pass now? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
Roblox Faces Lawsuit for Enabling Minor’s Sexual, Financial Exploitation; Meta, Snap, Discord Also Targeted
By Reuters | Updated: 6 October 2022
Roblox has been accused of enabling a California girl’s sexual and financial exploitation by adult men, according to a lawsuit against the online gaming firm on Tuesday. The lawsuit, filed in San Francisco Superior Court, also targets online chat company Discord, Snapchat parent Snap and Instagram parent Meta. Snap and Meta are already facing dozens of similar lawsuits.
Meta declined to comment. Roblox and Snap could not immediately be reached.
A Discord spokesperson said the company has a “zero-tolerance policy for anyone who endangers or sexualizes children” but declined to comment directly on the lawsuit.
According to the lawsuit, which was seen by Reuters, the minor was born in 2009 and began using Roblox when she was nine or ten years old. Roblox is popular with children under 13 but also has adult users.
Starting in early 2020, the minor came into contact with adult men through Roblox, who encouraged her to sign up for Discord, Snapchat and Instagram to communicate with them, according to the lawsuit. None of the companies required parental consent, and Discord did not verify the minor’s age even though it said it did not allow users under 13 years old, the lawsuit said.
The men exploited her by encouraging her to drink and abuse prescription drugs and send sexually explicit photos of herself, according to the lawsuit. One man allegedly persuaded her to send him money.
The minor suffered severe mental health problems leading to suicide attempts and hospitalisation as a result of her experience, the lawsuit said.
Both the minor and her mother claim the companies failed to take steps to keep minors using their platforms safe, and that Snap and Instagram encouraged addiction in children. They are seeking unspecified damages.
© Thomson Reuters 2022
Google Stadia to Shut Down in January 2023, Company to Refund Hardware Purchases: All Details V
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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