Monthly Archives: October 2020

Redefining Video Game Industry: Microsoft(MSFT)

In game industry, video game consoles are important for players to access particular games. If you have Sony’s console, PlayStation 5, then, you may play Sony’s games. Having been in this industry longer than any other companies, Sony has been stronger than Microsoft particular in Europe and Asia; PlayStaion has been a better tool, as well.

Something interesting happens recently in this Status Quo relationship between Microsoft and Sony.  Xbox Live membership reached 100 million users, has tripled during the Xbox One life cycle due to Microsoft’s duel strategies: software and cloud services (Gallagher, 2020, September 18). Microsoft enabled users to stream any Xbox One game to a mobile device (Needleman, 2019, June 9).

In the past two decades, Microsoft has expanded its presence in gaming markets (Aryedlund, 2002, January 7; Guth & Wingfield, 2006, April 26). In 2013, Microsoft launched its Xbox One equipped with motion sensors and Skype technology (WSJ, 2013, May 29). However, it did not impress much to investors and game players.

Under Satya Nadella, however, Microsoft fortified its position against Sony by acquisitions of Mojang AB for $2.5 billion in 2014 (Needleman, 2018, June 11) and by recent acquisition of ZeniMax Media Inc for $7.5 billion (Tilley & Needleman, 2020, September 21).  Thus, Microsoft has increased gaming portfolio to 23 games from 15. Now, Microsoft promised 60 games available in its new coming Xbox One System and Windows PCs. Its new console has custom-designed processor with Advanced Micro Devices. Microsoft focused on its subscription services such as Game Pass and Xbox live. It seems that Satya Nadella sees something in video game industry, when he said, “Gaming is a much bigger market than it ever was”(Tilley & Needleman, 2020, September 21).

 

Please cite as:

Rachel Kim (2020, October 21). Redefining Video Game Industry: Microsoft(MSFT), The Blue Ocean Management.com, Retrieved from: https://theblueoceanmanagement.com/2020/10/21/redefining-video-game-industry-microsoftmsft/

 

 

References:

Aryedlund, 2002, January 7, Barrons.com

Needleman, 2018, June 11, Wall Street Journal

Needleman, 2019, June 9, Wall Street Journal

Gallagher, 2020, September 18, Wall Street Journal

Guth & Wingfield, 2006, April 26,Wall Street Journal

Tilley & Needleman, 2020, September 21, Wall Street Journal

WSJ, 2013, May 29, Wall Street Journal

New Energy Markets are Getting Hot

Click here if you want to hear this article: Audio Provided

Following the previous hydrogen forecasts from Morgan Stanley and by Goldman Sachs(Goldstein, 2020, September 23), the BofA team (Alpert, 2020, September 30), McKinsey counted five major industries will replace their fossile energy with new type of renewable energy (McKinsey, 2020, October 5). They are transportation, power generation, industrial fuel, fuel for residential and commercial buildings. The competition among wind power, solar power, hydropower, and nuclear power has gotten high. By 2050, according to Bank of America research team, clean-hydrogen industries could see $2.5 trillion in annual revenues (Alpert, 2020, September 30).

Knowingly, Bill Gross bets on the two companies: Energy Vault store solar and wind power for use on cloudy or windless days; Heliogen, uses mirrors to generate the intense heat needed to make hydrogen, as well as steel and cement (Hodari, 2020, October 6). They are not in public stock markets yet backed by SoftBank. McKinsey highlighted transport industry where fuel cell electric vehicles (FCEVs) might be better for American trucks running long distance Plug Power (PLUG) and ITM Power (ITMPF) (McKinsey, 2020, October 5). These two companies are publicly traded, so you can invest them.

The BofA survey listed the industrial gas giants: Linde (LIN), Air Liquide (AIQUY) and Air Products and Chemicals (APD); hydrogen fuel cell specialists: Plug Power (PLUG) and ITM Power (ITMPF); the motor vehicle suppliers:Cummins (CMI), Daimler (DDAIF), Volvo (VLVLY), Toyota Motor (TM) and Hyundai Motor (HYMTF) (Alpert, 2020, September 30). They are all good options for long-term investment.

When markets show no clear direction, it is time for value investors to identify future trends that will come soon and dominate markets in the long run. When you are on the right strong wave, you can ride long.

Cite as:

Rachel Kim (2020, October 7). New Energy Markets are Getting Hot, The Blue Ocean Management.com, retrieved from: https://theblueoceanmanagement.com/2020/10/07/new-energy-markets-are-getting-hot/

References are as follows:

Alpert, 2020, September 30, Barron’s.com

Goldstein, 2020, September 23, Barron’s.com

Hodari, 2020, October 6, Wall Street Journal

McKinsey, 2020, October 5, Wall Street Journal and GLOBE NEWSWIRE