😓 Microsoft's Big Gaming Hiccup

Update 2023-04-27

What’s in today’s Business Edge update?

Meta goes all-in on generative AI, boosting B2B support and its product ecosystem! There is also a big hiccup: the Microsoft-Activision Blizzard deal is blocked by a UK watchdog! Meanwhile, PwC and Microsoft join forces, investing $1B in generative AI expansion.

Dive in for the details!

🌍 Impactful news

Top five news we spotted during the last 48 hours that can significantly impact the tech market, sorted according to impact level.

Microsoft-Activision Blizzard Deal Blocked by UK Watchdog

The UK's Competition and Markets Authority (CMA) has unexpectedly blocked Microsoft's $70 billion acquisition of gaming giant Activision Blizzard, potentially halting the largest deal in gaming history. The decision came as a surprise after the CMA initially seemed to accept Microsoft's promises to maintain Call of Duty on rival platforms. However, the watchdog ultimately rejected the acquisition due to concerns over Microsoft's potential to dominate the nascent cloud gaming market.

More:

• Microsoft aimed to acquire Activision Blizzard for its extensive portfolio, including the highly successful Call of Duty series

• The CMA's decision is unusual, focusing on the deal's impact on the relatively small cloud gaming industry

• Both Microsoft and Activision Blizzard have expressed concerns that the block could discourage tech innovation and investment in the UK

_{Tags: #Microsoft #ActivisionBlizzard #Regulation}

Read more about it at —> (read time: 4 minutes)

Insight: We classify this news as having Industry-wide Impact. The CMA's decision to block the Microsoft-Activision Blizzard deal will affect the entire gaming industry, potentially influencing future acquisitions and partnerships. The focus on cloud gaming also highlights the growing importance of this emerging sector in the market. However, we find that focusing on a small subset of the gaming market, emerging but still, is odd.

The block may also have significant regulatory implications for other mergers and acquisitions, signaling a more cautious approach by authorities when assessing deals in the tech industry.

If the deal is blocked, we believe that Microsoft long-term will focus less on Xbox and the gaming segment, leading to increased dominance from Sony (PlayStation). So the ruling would long-term lead to a less competitive environment for the gaming industry as a whole.

Meta Platforms Sees First Sales Increase in Nearly a Year

Meta Platforms, Facebook's parent company, reported a 3% increase in revenue, reaching $28.6 billion in Q1, breaking its streak of three consecutive quarters with declining revenue. The company attributed the growth to improvements in its advertising business and investment in AI tools for better ad-targeting systems.

More:

• Meta's Q1 revenue surpassed expectations of $27.7 billion

• Shares increased by over 10% in off-hours trading

• The company forecasts Q2 revenue as high as $32 billion

• Meta has faced competition from TikTok, which reached 150 million monthly users in the US in February

• The company expects 2023 expenses to be between $86 billion and $90 billion, lower than the previous outlook of between $89 billion and $95 billion

_{Tags: #Meta #AI #Advertising}

Read more about it at —> (read time: 5 minutes)

Insight: We classify this news as having a Market Impact. Meta Platforms' Q1 revenue increase, driven by improvements in its advertising business, affects a specific market segment within the tech industry. It showcases Meta's investment in AI tools and efforts to adapt to the challenges posed by Apple's ad-tracking changes and growing competition from TikTok. This news also impacts consumer behavior and trends within the market, as Meta's continued growth and revenue increases may influence consumer perceptions and preferences.

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PwC and Microsoft Partner to Invest $1B in Generative AI Expansion

PwC plans to invest $1 billion over the next three years to expand its artificial intelligence (AI) portfolio, aiming to help clients reimagine their business workflows through generative AI. PwC is partnering with Microsoft to develop scalable AI solutions using OpenAI's GPT-4/ChatGPT technology and Microsoft's Azure OpenAI Service. The collaboration will focus on creating a secure generative AI environment for tax, audit, and consulting services, transforming how PwC serves its clients.

More:

• PwC's global legal practice has adopted OpenAI-based Harvey application for legal and tax work automation.

• PwC has implemented Azure OpenAI Service capabilities for clients in industries such as insurance, aviation, and healthcare.

• PwC will upskill its 65,000 employees through its proprietary My+ program to help them leverage AI tools and capabilities.

_{Tags: #AI #Microsoft #PwC}

Read more about it at —> (read time: 6 minutes)

Inisght: This news has an industry-wide impact as it affects multiple sectors within the tech industry and involves significant technological advancements. PwC and Microsoft's collaboration could lead to innovative AI applications and scalable solutions that will transform business workflows, streamline services, and accelerate revenue growth for clients. By investing in generative AI technology, PwC is reimagining how it serves its clients, driving advancements and promoting responsible AI use across various industries.

Meta to Integrate Generative AI Across All Products, Enhance B2B Support

Meta plans to integrate generative AI across all its products, according to CEO Mark Zuckerberg during the company's Q1 earnings call.

More:

• Generative AI will impact every app and service offered by Meta

• Visual creation tools for Facebook and Instagram ads and posts are being explored

• Generative AI to support WhatsApp's B2B customer support business

_{Tags: #Meta #AI #WhatsApp}

Read more about it at —> (read time: 4 minutes)

Insight: We classify this news as having a Market Impact. Integrating generative AI into Meta's products will affect a specific social media and technology industry segment. This move involves moderate technological advancements and is expected to impact consumer behavior and trends within the market and enhance B2B customer support for WhatsApp.

⚡️Quick news

Other news we have found of importance, but in a very short format.

Meta CEO Envisions AI Agents for Billions, Generative AI Integration Across Products

Mark Zuckerberg announced Meta's plan to introduce AI agents to billions of people, incorporating generative AI into various products like WhatsApp, Messenger, Facebook, and Instagram.

_{Tags: #Meta #AI #Facebook}

Read more about it at —> (read time: 5 minutes)

Instagram Time Spent Grows 24% with AI-Powered Reels Recommendations

Meta revealed that time spent on Instagram has increased by 24% since the introduction of Reels, driven by AI-powered content recommendations similar to TikTok's approach.

_{Tags: #Meta #Instagram #AI}

Read more about it at —> (read time: 3 minutes)