Microsoft unleashes its ultimate weapon
While the dew is still drying off our tents from our latest camping trip, Microsoft (MSFT) has already respawned from 2021 and activated its ultimate weapon - a monster cash pile - to capture game maker Activision Blizzard (ATVI). Yep, your new Call of Duty squadmate is… Clippy. 📎
Microsoft’s US$69 billion purchase is the biggest deal in gaming’s history and will seriously buff the tech titan's gaming portfolio. The deal makes for a timely leap into mobile games, an area they’d previously been lagging… kinda like dial-up speeds in the 1990s. Not any more, thanks to Activision Blizzard ownership of Call of Duty Mobile and your mum’s obsession with Candy Crush. 🍬 Gaming growth has seriously levelled up over the pandemic, and big, well-looted companies have been on the prowl for fresh acquisitions. GTA maker Take-Two Interactive (TTWO) recently announced their US$12.7 billion deal to buy mobile games maker Zynga (ZNGA).
Microsoft’s not shy of splashing the cash. Their monster deal comes just a year after closing the US$7.5 billion purchase of ZeniMax Media, which brought us Fallout and soon Starfield, which some experts have flagged as one of the hottest games in 2022. To put this latest purchase in perspective, US$69 billion is just over half of the enormous US$130 billion pile of cash and short-term investments Microsoft had in June last year. In gaming, that’s what they call OP.
The OG tech giant quickly reassured gamers that they’d honour their existing agreements with Sony and not pull Call of Duty from PlayStation. But that didn’t stop the Sony share price from getting knocked down 13% on the news. Along with legendary game franchises like Overwatch and World of Warcraft, Microsoft also inherits claims against Activision Blizzard of sexual harassment and discrimination, which company CEO Satya Nadella has already vowed to fix.
Driverless driving is revving up
Last year might have been about SPACs ‘n’ space, but 2022 has tech companies and carmakers in a race to reach level 5 autonomous vehicles - and Kiwis are in the lineup. Level 5 means vehicles are full self-driving (FSD) in any condition, and London-based Wayve’s technology could be among the first to cross the finish line. 🏁 Headed by Christchurch-born Alex Kendall, Wayve raised US$200 million in their latest funding round, including investors Sir Richard Branson and Microsoft (MSFT).
Getting revved for FSD vehicles is more than just Twitter fodder; it could transform lives for people with disabilities. As Alphabet’s Waymo (GOOGL) hopes, it may even put a dent in the 1.35 million vehicle crash deaths each year. And Wayve’s ‘simpler’ camera system could set a new pace. Their AI machine learning capability is going head-to-head with Waymo, GM’s hands-free Super Cruise (GM) and Aurora (AUR), which uses ‘expensive and cumbersome’ LiDAR and radar technology, says Kendall, along with Tesla’s video input system.
LiDAR relies on laser beams to 3D map a vehicle’s surroundings, and while Tesla initially rejected laser technology, Bloomberg reported last year that the EV carmaker had signed a deal with laser sensor makers Luminar (LAZR) as part of their drive towards FSD (along with Volvo and Nvidia). Meanwhile at Hogwarts, erm, Oxford, real-life testing of Oxbotica's Ford Mondeos using a combination of cameras, radar, and LiDAR has hit the streets and doesn’t look ridiculous at all. 👀
Mercedes-Benz has also tar-sealed a deal to use LiDAR technology in their next-gen vehicles following owner Daimler also signing the bottom line with laser maker Luminar, whose stock temporarily lit up 23.1% last week. China hopes to have level 4 self-driving electric cars consumer-ready in 2024, following the country’s largest automaker Geely’s deal with Mobileye, owned by Intel (INTC). As for autonomous racecars hitting speeds of 278kmph… what’s the point? 🏎
It’s a Monster mashup!
Not content with their range of rainbow-coloured bevvies, Monster Beverage (MNST) has announced plans to dip their hairy toes into the alcohol market. Splashing US$330 million to purchase US craft beer company CANarchy Craft Brewery Collective, the sixth-largest craft brewer in the US. 👹
Could this be the pot of gold at the end of the rainbow? CANarchy comes pre-loaded with the types of eye-popping cans we’ve come to know ‘n’ love from craft brewers (looking at you, Wellington!) as they battle to stand out on supermarket and liquor store shelves. CANarchy is made up of six different craft brewers, and even their brew names sound like they could be slapped straight onto the side of a Monster Energy can: Deep Ellum, Oskar Blues, Cigar City, Revitalyte.
Monster’s mash-up is just the latest example of soft drink companies fizzing to team up with big brewers. Coca-Cola (KO) owns 19% of Monster and has been testing a partnership with Corona brewer Constellation Brands (STZ) to move beyond mixers into the fast-growing canned cocktail market. Yes, yes, hunkering down at home during a pandemic doesn’t mean you have to miss cocktail hour! 🍸 Or the juicy gossip for that matter, because while Coke and Constellation were going out for drinks, Monster has reportedly been getting down to business with Constellation Brands and mulling over a potential merger of the two companies. It could make for a messy love triangle?
Is Pepsi ok? Not waiting around with the popcorn to find out, Pepsi (PEP) has been out making their own moves. The challenger brand has brewed up a deal with giant Boston Beer (SAM) to dip their toes in the alcohol sector with their sugar-free alcoholic version of Mountain Dew, called ‘Hard MTN Dew’. Don’t mind if we Dew!