Game on
A fantasy buyout in video games
Good morning, avid gamers. This is your Stock Market Rundown for November 29th, 2024. Thank you so much, once again, for tuning in. Let’s get started:
TODAY’S TOP STORY: GAME CHANGER
Picture an ethereal world where you battle monsters and serve demigods on a quest for a mighty ring. Nope, this isn’t a sequel to Lord of the Rings. It’s the storyline of Elden Ring, a smash hit video game. (Believe me, the fantasy genre has more rings than Kay Jewelers.)
Since its initial release in 2022, Elden Ring has swept game awards and sold 25 million copies, becoming one of the biggest-selling video games of all time. Now, its success has attracted a suitor: Sony.
The global media and entertainment giant is reportedly in talks to acquire Kadokawa, the Japanese conglomerate that owns the developers behind Elden Ring and other popular titles.
Sony’s video game business is already a powerhouse. Earlier this month Sony raised its annual revenue forecast after delivering a second-quarter profit beat, propelled by doubling profits in its video game segment.
So why is Sony willing to pay billions to acquire Kadokawa? Well, scoring a hit in video games isn’t as easy as locking a bunch of developers in an office with an ample supply of Red Bulls and Hot Pockets.
Quick case study: Sony just spent eight years and hundreds of millions of dollars developing Concord, a first-person shooter that was supposed to be a tentpole title. It was a disastrous failure and was pulled offline after only two weeks, with users complaining it was dated and derivative. The lesson for Sony: don’t take risks with brand-new IP.
The jewel of Sony’s gaming business is, of course, the PlayStation 5, which launched in 2020 but is still going strong—Sony sold 3.8 million consoles in the most recently-reported quarter. The latest iteration of the console, the PlayStation 5 Pro, just hit the shelves on November 7th, with a hefty price point of $699.
The price tag isn’t stopping gamers, though: the PlayStation network currently hosts 116 million monthly active users. Sounds like a lot of employees working from home are indulging in a little Baldur’s Gate 3 between Zoom meetings.
SO WHAT ELSE IS GOING ON?
Kraft Heinz is being sued for supposed false claims that its mac and cheese contains no artificial preservatives. Crime of the century… or just some class-action lawyer who wants to put a new addition on his house?
Bitcoin smashed through all-time highs just in time for Thanksgiving weekend. Your annoying cousin who bought crypto in 2013 will be sure to tell you all about it.
Speaking of crypto, Donald Trump has pledged to create a crypto advisory council to shape government policy. In 2025 we’re going to have pump-and-dump token promoters draining digital wallets from the Lincoln Bedroom.
I posted back in January about Spirit Airlines’ struggles. Now, they’ve gone from midflight wobbling to crash-landing: the low-cost carrier has just filed for bankruptcy. Turns out meeting their debt repayment obligations was tougher than fitting a week’s worth of resort outfits in your carry-on.
That’s it for this week, my lovelies. Don’t overdo it on the turkey sandwiches, and I’ll see you next week. Yours in capitalism, The Axe