Forget Netflix. Gaming companies are winning the pandemic
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It’s a good time to be a gamer—and an even better time to be a gaming company. With so many people homebound and seeking indoor entertainment now, video-game makers are profiting wildly.
Take Nintendo. The latest installment of the Japanese firm’s anthropomorphic-homemaking hit Animal Crossing helped deliver “stratospheric” earnings for the company, as the Verge put it. The company reported skyrocketing operating profit of $1.37 billion, up 428% year-over-year. If Nintendo’s supply chain hadn’t been so disrupted by COVID-19 lockdowns, causing global shortages of the Switch console, it’s fair to say Nintendo might have reached the Mesosphere.
Tencent also recently reported a record-smashing quarter. Revenue rose 29% from a year earlier and operating profit leaped 43% for the quarter ended in June, both its highest ever gains. And while the White House is threatening to ban WeChat, the company’s super-popular chat app, the move will barely dent the Chinese giant as the U.S. market accounts for less than 2% of its revenues, per a Morgan Stanley estimate.
The recent spate of money-making is an industry-wide phenomenon. Madden NFL-maker Electronic Arts, Call of Duty’s Activision Blizzard, and Red Dead’s Take-Two Interactive all crushed their recent earnings expectations. Even Pokémon Go-maker Niantic, which adapted its ambling outside adventure game to the exigencies of the quarantined and couch-bound, is on track to pull in record sales. According to Sensor Tower, an app-usage data tracker, the game reaped $445 million in revenue for the first six months of 2020, up 12% year-over-year.
While much of the economy is struggling to restart, the gaming set is making money hand over controller-clenched fist. And investors have taken notice: Returns on video game-related exchange-traded funds exceeded 50% this year, Bloomberg reports. That beats out even Netflix’s stunning 45% rise.
Soon, Microsoft and Sony will release their long-awaited new video-game consoles: the Xbox Series X and Playstation 5 respectively. The debuts will come just in time for the holiday shopping season—one that is hopefully, let us pray, not accompanied by another wave of coronavirus infections.
By then a new generation of gamers will be thirsting for the latest screen-side diversions. Lucky for them and their suppliers, the consoles runneth over.
Born again. Airbnb is planning to file IPO-related paperwork with regulators next month, meaning the home-rental business could go public before the end of the year, the Wall Street Journal reports. The company had put the process on hold a few months ago after coronavirus lockdowns ravaged its business and caused $1 billion in cancellations. Rental activity has rebounded since.
Son's second coming. SoftBank has bounced back. The Japanese conglomerate led by billionaire Masayoshi Son posted a quarterly profit of $12 billion, recouping historic losses it posted only a few months ago. Son can thank the company's recent sale of a stake in a newly merged T-Mobile and Sprint telecom giant, plus a widespread tech rally that has boosted the valuations of big holdings like Uber and Slack.
Jesus, take the wheel. Speaking of Uber, CEO Dara Khosrowshahi said in an interview with MSNBC that the ride-hailing firm will probably have to shut down operations in California, at least temporarily, if it loses a high-profile court appeal. Uber is seeking to overturn a ruling that its gig workers should be regarded as full-time employees, a legal distinction that could prove highly disruptive to its business model.
Schism. Pinterest's former chief operating officer Francoise Brougher is suing the company for gender discrimination. She alleges that the photo-sharing site's male-stacked management team excluded her from board meetings and ultimately fired her after she reported sexist comments made by one team leader to human resources. Pinterest said it is reviewing the complaint and planning to conduct an independent review.
The meek shall inherit the earth. Electric automaker Tesla is splitting its stock in a five-for-one exchange. The move will lower the price point on its shares and make them more affordable for retail investors. Tesla's share price has more than tripled since the beginning of the year to $1,500; with a market capitalization of $290 billion, it is the world's most valuable automaker, at least by the stock market's estimation. Tesla's stock-splitting move follows a similar 4-for-1 split approved by Apple's board last month.
Occupational hazard of competitive lock-picking: bruised fingers.
We've all experienced the feeling before, that uncanny, spooky certainty that Facebook has been eavesdropping on us. It goes like this: Your friend happens to mention some new product or trend—an obscurely branded pair of yoga pants, a podcast about ghost stories, a celery water diet—and then—kablamo!—an advertisement for that very thing appears on your screen. Here's Simon Pitt, head of digital at the BBC, writing about his overwhelming compulsion to get to the bottom of the alleged conspiracy.
Hateful posts on Facebook and Instagram soar By Danielle Abril
The pandemic is speeding up automation, putting jobs in question by Jonathan Vanian
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ONE MORE THING
Last night witnessed the peak of the Perseid meteor shower. If you missed the shooting-star spectacle, worry not: The height of the show runs through dawn on Aug. 13, and the event extends, albeit less dazzlingly, through Aug. 22.
I'm planning to catch a bit of the display while camping in the wilds of New England next week.