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FirstFT: Microsoft to buy video game maker Activision Blizzard for $75bn

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Good morning. Microsoft has agreed to buy video game maker Activision Blizzard for $75bn in the biggest ever deal by the tech company.

Under the terms of the all-cash deal, Microsoft will pay shareholders of the company behind Call of Duty and World of Warcraft $95 per share, a 45 per cent premium on the closing price last week.

The purchase price includes Activision’s $6.37bn of net cash, valuing the company at $68.7bn.

It is the latest in a wave of dealmaking in the gaming sector. Take-Two Interactive, the maker of the popular Grand Theft Auto game series, agreed last week to buy rival Zynga, the maker of FarmVille and Words with Friends, for $12.7bn. 

The video games sector has taken centre stage in the latest scramble for dominance in digital entertainment. Microsoft said the Activision purchase would power its move into the metaverse, the name given to the immersive virtual worlds that the big tech companies are racing to build.

Thanks for reading FirstFT Asia. Here is the rest of today’s news — Angelica.

1. Goldman Sachs profits drop 13% after big bonus payouts The Wall Street bank paid out $3.2bn in bonuses and overall salary costs were up 33% while its revenue dropped by 7%. Despite earnings missing estimates, full-year net profit for 2021 came in at $21.2b, the largest in the banks’ history.

2. Kazakhstan’s former president reappears to deliver TV address Nursultan Nazarbayev surfaced yesterday for the first time since deadly protests erupted more than two weeks ago, saying he remained in the capital and denying rumours of a power clash with his chosen successor, Kassym-Jomart Tokayev.

3. AT&T and Verizon limit 5G service near US airports after airlines’ outcry The telecoms companies have agreed to scale back or postpone their debuts of high-speed 5G technology after eleventh-hour warnings from the aviation industry that it could interfere with aircraft safety and navigation systems.

4. Tech billionaire seals Spac deal amid Uyghur controversy A Spac backed by tech investor Chamath Palihapitiya has agreed an $825m deal to merge with a healthcare company focusing on kidney disease. The move comes after Palihapitiya stirred controversy by saying “nobody cares” about the Uyghurs in China.

5. Bank of Japan revises inflation projection for first time since 2014 The BoJ revised its inflation projection upward from 0.9% to 1.1% for the fiscal year starting in April, driving the yen lower as a nation that has battled deflation for decades faces the mounting pressure of price rises in food and energy.

Coronavirus digest

  • Hong Kong will cull more than 1,000 hamsters and quarantine over 150 pet store visitors in extreme caution over suspected animal to human transmission.

  • Humanitarian efforts to assist Tonga after a volcanic eruption are being complicated by the South Pacific nation’s determination to keep Covid-19 at bay.

  • Covid-19 endemicity will not be painless, argues science commentator Anjana Ahuja.

  • Countries with high exposure to the Omicron variant are recording record numbers of child coronavirus hospital admissions, although health experts stress that severe cases in the young are rare.

Chart showing that Covid hospital admissions among children have soared to record highs, in contrast to adults where admissions have diverged from cases

The day ahead

US banks earnings Morgan Stanley and Bank of America will report their Q4 earnings today.

EU presidency French President Emmanuel Macron will address the European Parliament today after France takes the revolving presidency of the Council of the European Union.

Ukraine tensions US secretary of state Antony Blinken is to meet Ukraine’s president Volodymyr Zelensky after last week’s talks between US, Russia, and Nato reached a ‘dead end’.

What else we’re reading

Facebook patents reveal how it intends to cash in on metaverse Pupil movements, body poses and nose scrunching are among the flickers of human expression that Meta wants to harvest in building its metaverse, an undertaking that is essentially a ‘global human-cloning programme.

What we know about Evergrande’s ‘black-box’ restructuring The crisis at Evergrande, the world’s most indebted property company, reached a milestone in December when it officially defaulted after months of missing payment deadlines. The rest of the saga could take years to unfold. Here is what we know.

Moscow’s sanction-proofing efforts weaken western threats Moscow’s ‘Fortress Russia’ strategy is likely to make US and Europe’s proposed sanctions less of a deterrent from invading Ukraine. However, the EU has not reduced its dependency on Russian gas, leaving the possibility for Moscow to retaliate by limiting supplies.

Patriotic Gen Zs fuel pandemic jewellery boom in China Gen Z is leading the growth of jewellery retail sales, using their willingness to spend big on “China-chic” pieces to feed the $69bn industry.

Business leaders have to play a better political role Like it or not, business leaders are potent players in our fragile democratic politics, and they need to play the role decently and responsibly, writes Martin Wolf.

Books

Now that the headlines from last year’s COP26 climate change summit in Glasgow have faded, you might think attention to planetary havoc has drifted. Not so in the publishing world, where 2022 has begun with an absorbing crop of environmental books on everything from the polar vortex to veganism and, of course, global warming.

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