🎮 Microsoft Gearing Up to Take on Sony

What you need to know before the US markets open

Hey Global Investor, here’s what you need to know before the US markets open.

🔥 Winvesta won the Fintech of the Year for Asia Pac in the Barclays Entrepreneur Awards 2020, and is nominated for the Global Award.

You’ve been an integral part of the Winvesta community, and the reason we’ve been nominated for the People’s Choice Award. But there’s not much time left: vote for us while you still can.

Market Snapshot 📈

S&P 500 (Monday Close) 3,281.06 −38.41 (1.16%)

NASDAQ (Monday Close) 10,778.80 −14.48 (0.13%)

FTSE 100 (5 PM IST) 5830.29 +26.00 (+0.44%)

NIFTY 50 (Today’s Close) 11,153.65 −96.90 (0.86%)

USDINR (5 PM IST) 73.43 (1 Year +3.52%)

Microsoft’s Throws Down the Gauntlet at Sony – Acquires Bethesda for $7.5B

Microsoft announced Monday that it would acquire ZeniMax Media, parent of video game giant Bethesda for $7.5B.

What is Happening? The video game industry is currently exploding, and it’s common knowledge that Sony is ahead in the race. Microsoft is set to unveil Xbox Series S and Series X consoles in November to take on Sony’s PS5 in the next-gen console wars. The company lost ground to Sony in the current console generation as it sold nearly 60M fewer Xbox One units compared to PS4 and is keen to turn things around.

Enter ZeniMax Media, one of the foremost gaming firms in the world. Its $7.5B acquisition by Microsoft is a big deal. The tech giant will add eight new studios to the existing 15. It will publish hugely popular titles like The Elder Scrolls, Doom, Fallout, and Wolfenstein on Xbox’s “Game Pass” subscription service the same day they hit the market. Generally, third-party titles take months to show up on Game Pass after the initial release.

The Bethesda purchase highlights Microsoft’s need for gaming studios. The company currently has 15M Game Pass subscribers and is making nearly $1B in annual subscription revenue. By adding ZeniMax titles on the Game Pass the same day as their release, Microsoft plans to double its subscribers and ultimately earn substantial profits.

The acquisition which will consummate next year will preserve ZeniMax’s leadership structure. It is unlikely Microsoft will make all ZeniMax games exclusive to Xbox and PC as it would attract a lot of criticism from gamers worldwide. More importantly, the company would lose out on revenue from gamers buying ZeniMax titles for PS and Nintendo platforms.

With the Bethesda acquisition, Microsoft is positioning itself as a greater player in the gaming industry vis-à-vis Sony. Add to it, the soon-to-be-launched next-gen consoles, and Game Pass’s superb value, there’s enough pressure on Sony to make its move. It’s game on!

Market Reaction: Microsoft stock closed at $202.54, up 1.07%

Microsoft Snapshot 📈

MSFT $202.54 +2.15 (+1.07%)

Analyst Rating (31 Ratings) BUY 90% HOLD 10% SELL 0%

Newsworthy 📰

Intel ‘Outside’!: Intel gets U.S. licences to supply some products to Huawei (INTC -0.34%)
Expectations: What to expect from Tesla on Battery Day? (TSLA +1.64%)
Team Up: Walmart teams up with Goldman Sachs to offer online sellers business credit lines (WMT +1.32%, GS -0.44%)

Later Today 🕒

6.30 PM IST: Existing home sales (SAAR)
7.30 PM IST Fed Chair Jerome Powell testifies on the CARES Act
9.30 PM IST: Richmond Fed President Tom Barkin speaks
After Market Close: Nike Inc (NKE) Earnings
Before Market Open: Manchester United Plc (MANU) Earnings

Fun Fact of The Day 🌞

If you lift a kangaroo’s tail off the ground it can’t hop.

Disclaimer: The content of this article has been created and published by Winvesta India Technologies Pvt. Ltd., in order to ease the reader’s understanding of the subject matter. The information and/or content (collectively “Information”) provided herein is general information sourced through various news reports and does not constitute a research report or a research analysis. The Information is not intended to offer advice, target or solicit any particular customer or group of customers to buy or sell securities.

Winvesta does not render any research or advisory services and provides a more detailed description of its services on its website and mobile application along with the terms and conditions published therein from time to time. While reasonable care has been exercised to ensure that the Information is adequate and reliable, no representation is made by Winvesta as to its accuracy or completeness and Winvesta, its affiliates, subsidiaries and employees accept no liability of whatsoever nature for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this Information. Neither Winvesta nor any of its affiliates are acting as an investment adviser, research analyst or in any other fiduciary capacity. Accordingly, reader’s are expected to undertake their own due diligence in consultation with their own advisors and are advised not to solely rely on the Information. Any such reliance shall be at the reader’s own risk.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.