Candy, crushed… Yesterday Microsoft announced plans to buy Activision Blizzard, which makes hits like World of Warcraft and Candy Crush, for about $70B — the largest all-cash acquisition in corporate history. For reference: Previously Microsoft’s biggest deal was its $26B LinkedIn purchase. Shares of Activision spiked 26% yesterday, after slipping 27% since California regulators sued the company over employee harassment in July.

• Microsoft’s gaming biz is now the third largest in the world after Tencent’s and Sony’s. Microsoft’s existing gaming biz (think: Xbox, Minecraft) brought in $15B last year, and its Xbox Game Pass monthly subscription now has 25M subscribers.
• Antitrust scrutiny is expected, but Microsoft is reportedly so confident the deal will close, it’s agreed to pay a $3B cancellation fee if it falls through.

When it games, it pours… Sales across the gaming industry boomed 27% during lockdown in 2020 and continued growing last year. Gaming revenues are forecast to jump from $180B in 2021 to $220B by 2024. And as gaming companies reach new sales levels, there’s been a flurry of consolidation: There were $117B worth of gaming acquisitions last year, and Grand Theft Auto maker Take-Two agreed to buy FarmVille creator Zynga last week for $12.7B.

Don't look up... at your streaming bill. Netflix is raising prices for its 74M subscribers in the US and Canada across plans. The standard plan (aka: the most popular) is rising by $1.50/month to $15.50. The hike comes less than a year and a half after the Flix's last US increase.

• Watch again: Netflix gained 36M subscribers in 2020 as we hibernated with laptops, ramen, and "Tiger King."
• Next episode: That led to subscription saturation (#subscripturation) and slowing growth. Last quarter Netflix added fewer than 4.5M subs.

The real "Single's Inferno"... no one to share a Netflix password with. US-Canada subscribers make up more than a third of Netflix’s 214M subs. But in the second quarter Netflix lost US-Canada subscribers. The price hikes could add $1B+ in annual revenue to compensate for sluggish growth in the Flix’d-out market. As streaming competition #intensifies, Netflix is exploring other growth opportunities:

• New products: Last year it launched a merch shop (think: "Emily in Paris" sunglasses). It also released games on its mobile app, including two based on "Stranger Things."
• New markets: Netflix is doubling down on foreign content like “Squid Game” for international growth. Last month it slashed prices in India to $2.60 to compete with Disney and Amazon in the largest untapped digital market.

• Swallow: Pfizer said its newly authorized Covid pill is effective at treating Omicron in lab tests — but supplies are scarce.
• Miss: Goldman Sachs shares fell 7% after it said quarterly profit dropped from last year on disappointing trading revenue. It’s also been splurging on comp to retain stressed-out talent.
• Slick: Exxon pledged to hit net-zero emissions on its operations by 2050. It's the last US oil giant to make a net-zero promise amid pressure from activist investors.
• Yikes: AT&T and Verizon are delaying the rollout of 5G wireless services near some US airports after airlines warned the technology could cause "catastrophic disruption" for flights.
• Subtle: An activist investor once again told Kohl's to shape up or sell the company, writing that its exec team is "incapable" of creating shareholder value — a month after a separate investor applied pressure.

• Earnings expected from: UnitedHealth, Bank of America, Procter & Gamble, Morgan Stanley, and US Bancorp

Authors of this Snacks own shares of: Microsoft, Netflix, Amazon, Disney, Zynga, AT&T, and Pfizer

ID: 1995744