Microsoft is taking an interesting approach to secure regulatory approval for its acquisition of Activision Blizzard. In a recent filing spotted by Rock Paper Shotgun, the company told New Zealand’s Commerce Commission the troubled publisher produces no “must have” games. Yes, you read that right.

“There is nothing unique about the video games developed and published by Activision Blizzard that is a ‘must have’ for rival PC and console video game distributors that give rise to a foreclosure concern,” the company says in the document. Put another way, Microsoft believes owning the rights to best-selling Activision Blizzard franchises like Call of Duty won’t prevent rivals like Sony from competing against it.

At first glance, that would seem to be a nonsensical argument to make about a company Microsoft plans to spend $68.7 billion to acquire. All the same, it’s a claim the tech giant is making in response to its rivals. In a filing with Brazilian regulators, Sony called Call of Duty “an essential game” and an AAA title “that has no rival.” It argues the franchise is so popular that it influences the consoles people buy. Sony is likely speaking from experience. In 2015, the company announced an agreement with Activision that saw some Call of Duty content arrive on PlayStation consoles first.

Downplaying the importance of Call of Duty is just one of the ways Microsoft has tried to placate regulators. In February, the company pledged it would continue to make the franchise available on PlayStation consoles beyond the end of any agreements Sony and Activision had in place before the acquisition was announced. More recently, the company announced a labor neutrality agreement with the Communications Workers of America, which has been organizing video game workers across the industry.

At the end of its fiscal year in May, Sony was fairly bullish on gaming sales, predicting sales of 18 million PlayStation 5s for 2022 after selling 11.5 million in 2021. The company also expected a "significant" revenue increase over 2021 due to a boost across "all categories."

In its latest earnings drop, however, the company has revised its profit forecast down by 16 percent from 305 billion yen ($2.3 billion) in May to 255 billion yen ($1.9 billion), "due to an expected decrease in sales of first party titles," it wrote. The company also chalked up the drop in revenue to higher expenses due to its acquisition of Bungie Studios closing earlier than expected. 

Sony didn't say anything about its PS5 console forecast, but it sold 2.4 million units this quarter compared to 2.3 million in the same quarter last year (21.4 million units to date). That means it must sell over 5 million units on average for the next three quarters to meet its May forecast — something it has never done before. In May, however, Sony said that it will finally be able to ramp up production to meet PS5 demand as supply chain issues ease — though as it stands now, the consoles are still in short supply. 

On the software side, things also went south as Sony sold just 47.1 million titles, including 6.4 million first party games, compared to 63.6 million titles and 10.5 million first-party games in the same quarter of 2021. On top of that, PlayStation Plus users dropped slightly from Q4 (47.3 million instead of 47.4 million), and monthly active users also dropped from 106 to 102 million. Sony introduced the new higher-priced PS Plus Extra and Premium tiers in June, but it has yet to reveal the impact of those — hopefully, we'll learn more next quarter.

Looking ahead, Sony has a few major titles on the horizon that could perk up software sales, including God of War Ragnarokcoming November 9th, and The Last of Us Part I remake arriving on September 2nd. On the hardware side, the PSVR 2 has been revealed but isn't expected to arrive until next year.  

The next quarter will be a lot more interesting for Sony's gaming division, as PS5 sales will show if it's been able to ramp up production. Game sales will also be notable, as the steep drop this quarter bodes ominously for the industry as a whole. 

After a strong quarter earlier this year, Apple is continuing to break records. According to the company's financial results posted today, it's reporting a revenue record of $83 billion, an increase of 2 percent from the same period last year. Apple also said it reached an all-time high for its installed base of active devices "in every geographic segment and product category." However, the company's profits are down by a whole 11 percent, and while it continued to see growth in its iPhone sales, revenue from Macs and wearables dropped.

It's worth noting that Apple's recently announced MacBook Air with M2 chip only started shipping this month, so the numbers for Macs are likely to increase next quarter. Considering the devices the company is expected to launch in the fall, it's also possible consumers are holding out for new products and waiting out the ongoing inflation. 

Apple CEO Tim Cook said in a press release “This quarter’s record results speak to Apple’s constant efforts to innovate, to advance new possibilities, and to enrich the lives of our customers.” The company's CFO Luca Maestri added “Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment."

The company is holding a call at 5pm ET to shed light on its results and answer questions from the investor community, and we'll update this post with any newsworthy findings.

As expected, electric pickup manufacturer Rivian is laying off 6 percent of its 14,000-strong workforce in an effort to boost production without raising more funds, The Wall Street Journal has reported. The company has a 71,000 vehicle pre-order backlog for its R1T and R1S electric pickup and SUV, but had to slash its production forecast for 2022 in half to 25,000 vehicles. 

Rivian is also concerned about raising cash in the current economic environment. "Over the last six months, the world has dramatically changed with inflation reaching record highs, interest rates rapidly rising and commodity prices continuing to climb — all of which have contributed to the global capital markets tightening," wrote chief executive RJ Scaringe in a note seen by the WSJ. 

With investors like Ford and Amazon having helped it raise $12 billion, Rivian is one of the best funded EV startups out there. However, the company is at a delicate phase, trying to ramp up production enough to finally bring in revenue after building a factory in Illinois. It's also planning to accelerate development of a more budget-oriented EV called the R2 and build a second $5 billion factory for that model in Georgia.

Another EV startup struggling with production is Faraday Future, which delayed the launch of its first EV, the FF91, yet again. The company said it needs to raise another $325 million in cash to fund operations until the end of the year. 

For the second quarter of 2022, Samsung has reported a consolidated revenue of KRW 77.2 trillion (US$59.4 billion), which is a record high for the quarter ending on June 30th. Samsung's operating profit also reached KRW 14.1 trillion (US$10.8 billion) — that's 12 percent higher from the same period a year earlier and is its best yet since 2018. As has been the case these past years, the company's semiconductor or Device Solutions (DS) division greatly contributed to those numbers and has achieved a historical high in quarterly revenue for the second consecutive quarter.

The DS division posted KRW 28.5 trillion (US$21.9 billion) in consolidated revenue and KRW 9.98 trillion (US$7.7 billion) in operating profit in the second quarter, thanks mostly to server chip demand. However, chip demand for consumer products, such as mobile phones and PCs, was much weaker than expected "due to widening impacts of macro issues." In fact, Samsung said its DRAM and NAND shipments came in below guidance. The company also expects demand for consumer devices to stay weak and even believes that there's a possibility for this slump in demand to make its way to enterprise.

As you can guess based on that information, Samsung's Mobile eXperience (MX) business was also affected by the overall decline in market demand. The company blamed "geopolitical issues and concerns over inflation on top of continued weak seasonality" for the mobile division's decline in earnings. It also said the costs of components and logistics affected the business' profitability and caused it to slide lower than the previous quarter's.

The tech giant doesn't expect smartphone sales to blow up next quarter either: Demand for new phones will likely stay similar year-on-year or show only a single-digital growth, it predicts, because of prolonged geopolitical issues and economic uncertainties. That said, it's hoping that the launch of new foldables could pad its sales numbers in the coming months. Samsung will unveil its next-gen foldable phones at its upcoming Unpacked event on August 10th. 

Facebook parent company Meta has just reported its earnings for the second quarter of 2022, and it was another quarter of shrinking profits. Total revenue of $28.8 billion was only down one percent compared to Q2 one year ago, but net income dropped 36 percent to $6.7 billion. Making almost $7 billion in profit is not a bad quarter for anyone, but the size of the decline compared to a year ago is pretty significant. And, according to the Wall Street Journal, this is the first-ever drop in revenue for Meta / Facebook — so even though we're only talking one percent, it's still noteworthy.

Revenue from advertising and Meta's "family of apps" was essentially flat year-over-year, and Reality Labs (home to hardware like the Meta Quest and other metaverse-related initiatives) actually grew 48 percent year-over-year to $452 million. But Reality Labs accounted for a $2.8 billion loss this quarter, a 15 percent larger loss than Q2 one year ago. At this rate, it seems likely that Reality Labs will lose Meta more than the $10 billion it cost the company in 2021.

This comes the same day that the FTC announced it was seeking to block Meta's acquisition of 'Supernatural' VR workout app maker Within, a proposed sale that was announced last year. “Instead of competing on the merits, Meta is trying to buy its way to the top,” John Newman, deputy director of the FTC's Bureau of Competition, said in a statement.

Meta is holding a call with investors at 5PM ET, and we'll be listening in to hear comments from CEO Mark Zuckerberg and will update this post with anything we learn.

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Spotify’s second-quarter financial release shows the streaming giant hasn’t yet felt the dread hand of the looming global recession. Unlike Netflix, which had to report a fall in its overall customer base, Spotify has seen both free and paying accounts grow. It now has 433 million users, up from the 422 million reported at the end of the first quarter. 188 million of those are paying for Premium, a leap of six million from three months ago, while a further four million are signed up on an ad-supported basis.

Despite industry-wide fears that household budgets would cut entertainment costs to help free up much-needed cash, Spotify has dodged cost-cutting so far. The company said that while it was keeping an eye on the “uncertain” environment, it was “pleased with the resilience of [its] business.” That said, the company did spend big to help grow its user figures, with marketing campaigns designed to coax back users who let their subscriptions lapse, or who wanted to expand to a family plan.

That marketing spend helped blow a hole in the company’s finances, with Spotify posting a quarterly loss of €194 million ($197 million). The company is banking on sharp increases in revenue both for subscriptions and advertising to help balance those losses out. In addition, its plan to pivot toward cheaper forms of audio content, like podcasts and audiobooks, should see the volume of cash it pays to record labels fall to a more tolerable (for Spotify) level — even if recording artists continue to demonstrate that they’re being starved of an income by the piddling royalties paid out on a per-stream basis.

Internet satellite operators OneWeb and Eutelsat are planning to merge in the hopes of becoming a stronger rival to SpaceX's Starlink. The merger, which is subject to approval from regulators and Eutelsat shareholders, is expected to close by mid-2023 and it values OneWeb at $3.4 billion. Shareholders of OneWeb and Eutelsat will each own half of the combined company.

Eutelsat has a fleet of 36 geostationary orbit satellites. These will be combined with OneWeb's cluster of low-earth orbit satellites, which can provide internet access from the skies. OneWeb currently has 428 satellites in orbit of a planned 648 in its first-generation network.

OneWeb and Eutelsat expect to have combined revenues of €1.2 billion ($1.56 billion) in the 2022-23 fiscal year. Eutelsat chair Dominique D’Hinnin and CEO Eva Berneke will remain in those positions in the merged entity. OneWeb investor Sunil Bharti Mittal will become co-chairman.

The merger comes after OneWeb stumbled in its bid to become a viable competitor to Starlink and Amazon's Project Kuiper. OneWeb filed for Chapter 11 bankruptcy in March 2020 as it sought a buyer. The UK government and Mittal's Bharti Global each paid $500 million for a 45 percent stake in OneWeb. The company secured additional funding in early 2021 to launch hundreds of satellites.

More recently, OneWeb was caught in the crossfire between Russia and the West following the former's invasion of Ukraine. UK sanctions prompted Russia to block launches of OneWeb satellites — it demanded that the UK sell its stake in OneWeb and wanted assurances the satellites wouldn't be used for military purposes. OneWeb ended up turning to its rival SpaceX to launch the remainder of its first-gen satellites.

After the expected merger, the UK will retain a "special share" in OneWeb as well as exclusive rights over the company. These grant the government a significant say in national security controls over the network and veto rights over certain decisions, such as the location of OneWeb's headquarters.

Back in February, Faraday Future presented the production version of its FF91 electric SUV at its California plant and said it would start manufacturing its long-delayed vehicle in the third quarter of 2022. Now, according to Bloomberg, the embattled company has revealed in a filing for investors that it has to push back the EV's production yet again and that it needs more cash for its commercial launch. 

Apparently, the company said it has to delay FF91's deliveries to the "third or fourth quarter of 2022." Seeing as the third quarter has already started, it's now likely aiming for late Q3 — that said, the fourth quarter seems more likely, and that is if Faraday Future's plans finally go as intended. Especially since it also has to find the money needed to keep running: The company also told investors that it needs additional cash to launch the FF91 and that it's looking to raise around $325 million to fund its operations until December 31st, 2022. 

Faraday Future was founded in 2014 and planned to launch its first electric vehicle way back in 2018. It's had to postpone launching its EV several times over the past years as it grappled with a litany of financial issues. The company almost ran out of cash in 2017 until a company called Season Smart, which was later acquired by Chinese company Evergrande, agreed to invest $2 billion in it. Faraday Future quickly burned through Season Smart's $800 million initial cash injection, though, and it spent 2018 feuding with its main investor. 

While it reached a restructuring deal with Evergrande by the end of 2018, it wasn't able to secure enough money to bring back the employees it put on unpaid leave. The company also had to give up on its plans to build a factory in Las Vegas and put up the 900-acre plot for sale for $40 million. Faraday went public in a merger with a blank-check company back in 2021, but it looks like that wasn't enough to solve its financial woes.

As Bloomberg notes, the delay comes in the midst of an issue between the company and its founder, Jia Yueting, who stepped down as CEO in 2019 as part of the company' restructuring deal. Apparently, a shareholder group associated with Yueting offering Faraday Future "at least $100 million" to remove an unnamed director from the startup's board. The company reportedly pushed back, and the group accused it of not treating the offer "with the gravity, urgency and fairness it deserves" considering Faraday's financial condition. 

Volkswagen is shaking up its leadership. The automaker has announced that group chairman Herbert Diess will leave at the end of August. Porsche chairman Oliver Blume will take over the role (while preserving his existing position) as of September 1st. The company didn't explain Diess' exit, but said the move was the result of a "mutual agreement."

Diess has a somewhat mixed track record. He replaced former chief Martin Winterkorn as the Dieselgate emissions cheating scandal unfolded in 2015, and was meant to help VW move past a dark chapter in its history. In 2019, though, German prosecutors charged Diess with stock manipulation for allegedly delaying reports on the cheating to minimize the impact on company shares. Diess' attorney contended that the executive joined VW too late to understand the ramifications of the scandal, but the allegations still tarnished the leader's reputation.

At the same time, there's little doubt that Diess oversaw an important moment in VW's history. He helped the company start its transition to EVs and self-driving cars. He also prepared for declining car ownership by fostering mobility services. Much of VW's business still depends on conventional combustion engine vehicles, but it now expects EVs to represent half of its sales by 2030. If the Dieselgate-era VW was clinging to the past, Diess' company was bracing itself for the future.

Don't expect a radical change under Blume. The new chairman will "press ahead" with the transformation that largely began under Diess, according to VW. Blume may serve as a custodian in that regard, but that won't necessarily be a problem if the company continues to expand and improve its EV lineup.