Microsoft’s bid to buy TikTok has just foundered amid US-China tensions, but its switch to investing in a clash of empires in the fantasy world of The Elder Scrolls makes far more sense anyway.
The Xbox maker has acquired ZeniMax for $7.5bn, parent of Bethesda Softworks, whose eight gaming studios produce franchises including The Elder Scrolls, Fallout, Wolfenstein, Doom, Quake and Starfield.
It was hard to see where TikTok, the short video app popular with teens, would fit in Microsoft’s portfolio, but acquiring Bethesda’s high quality content is much more in keeping with a strategy that dates back to acquiring Halo developer Bungie 20 years ago and includes the purchase of Mojang’s Minecraft for $2.5bn in 2014.
This is a much bigger deal and is its third largest after LinkedIn and Skype.
A person familiar with the transaction compared it to Disney purchasing Pixar in 2006 for $7.4bn. “This has always been one of the highest quality, if not the highest quality, independent studios that is left,” the person said.
It comes as pre-orders begin for the two new Xbox consoles launching in November and the franchises Microsoft is acquiring lend themselves to its streaming service and the subscription model for games and hardware it is now pursuing.
Morgan Stanley analysts see the deal as “transformative” for Microsoft, giving it an edge over Google, Amazon and other emerging players who lack its content library. Lex says if the acquisition of ZeniMax doubles subscriber numbers to its Game Pass, it would contribute more than $4bn to the company’s annual top line.
At the other end of the spectrum, in the expanding world of hyper-casual games, France’s Voodoo has won a lengthy court battle where it alleged key elements of its carpentry game Woodturning had been copied by the publisher Rollic Games and its developer Hero Games in their Wood Shop title.
This case has opened up a whole new creative world to me, as I’m now tempted to explore not only “One lathe to rule them all” Woodturning, but also Soap Cutting, Ice Carving and even Weld It 3D.
The Internet of (Five) Things
1. TikTok takes down 100m videos
While its future ownership may be murky, TikTok released its latest Transparency report today, revealing it has taken down 104.5m videos in the first half. It also testified about data privacy to the UK parliament. Yuan Yang in Beijing gave evidence as well and writes that President Trump has helped his counterpart export China’s vision of cyber-governance.
2. Facebook to act if US election chaotic
The social media platform has said it will take aggressive and exceptional measures to “restrict the circulation of content” on its platform if November’s presidential election descends into chaos. In an FT interview, Nick Clegg, head of global affairs, said Facebook had drawn up plans for how to handle a range of outcomes, including widespread civic unrest.
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3. Chinese tech ETFs approved
China’s securities regulator has given the nod to the first four exchange traded funds to track Shanghai Stock Exchange’s Nasdaq-style Star Market. Lex says the potential market is huge and the likely IPO of Ant Financial next month will change the landscape, with a target valuation of more than $200bn.
4. European tech overtakes banks
The equity value of European banks, hit by loan losses and historically low interest rates, has slipped below the region’s technology groups for the first time. Listed tech companies are now worth a combined €842bn, above banks’ €822bn, according to Refinitiv. However, this week’s #fintechFT looks at a McKinsey report that argues the fintech sector is facing an “existential threat”.
5. Who’s your head of remote?
Apple chief Tim Cook has told a conference he doesn’t think that a post-Covid Apple will “return to the way we were because we’ve found that there are some things that actually work really well virtually”. Pilita Clark’s latest column looks at how tech companies are leading in appointing a “head of remote”.
Tech tools — Royole FlexPai 2
Flexible display pioneer Royole has unveiled its latest stab at a smartphone. The FlexPai 2 will be available in China, costing around $1,500. Its wraparound screen has been folded 1.8m times to prove its reliability and the handset also features a four-camera array and 5G connectivity.
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