Tech Brew Ride Home - Tue. 01/18 – Microsoft Buys Activision Blizzard In The Biggest Gaming Deal Of All Time

Episode Date: January 18, 2022

Microsoft is buying Activision Blizzard in the biggest gaming acquisition of all time. Partially this is a metaverse play, but meanwhile, Meta is quietly locking down all the metaverse patents. Crypto.com halts withdrawals on its platform but insists it hasn’t been hacked. And why are countries encouraging their athletes to use burner phones when they attend the upcoming Olympics? Sponsors: Streak.com/techmeme EditorX.com Links: Microsoft to buy Activision in $68.7 billion all-cash deal (CNBC) Activision Blizzard Games Will Come To Xbox Game Pass As Part Of Acquisition (PureXbox) Facebook patents reveal how it intends to cash in on metaverse (Financial Times) Crypto.com Suffers Hack for At Least $15M in Ethereum (Decrypt) Samsung begins mass production of Exynos 2200 smartphone processor (ZDNet) Cross-country Exposure - Analysis of the MY2022 Olympics app (Citizenlab.ca) Olympic burner phones? Athletes warned about bringing personal devices to China for 2022 Beijing Games (USAToday) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the tech meme right home for Tuesday, January 18th, 2020. I'm Brian McCullough. Today, Microsoft is buying Activision Blizzard and the biggest gaming acquisition of all time. Partially, this is a Metaverse play, but meanwhile, meta is quietly locking down all of the Metaverse patents. Crypto.com halts withdrawals on its platform, but insists it hasn't been hacked, and why are countries encouraging their athletes to use burner phones when they attend the upcoming Olympics? Here's what you miss today in the world of tech.

Just an absolute blockbuster today. Microsoft this morning announced plans to acquire Activision Blizzard for $68.7 billion in cash or $95 a share with the deal slated to close in the fiscal year 2023. Apparently, Activision Blizzard will be run independently until then. Bobby Kotik will remain as the CEO, but will report directly to Xbox Head, Phil Spencer. Now, when I say this is a blockbuster, listen to these superlatives. It is Microsoft's biggest acquisition ever, and by quite a margin, the previous record for Microsoft was the $26 billion purchase of LinkedIn. It's also the largest acquisition in the gaming industry, full stop of all time. It's nearly 10 times the size of the Bethesda acquisition. It makes Microsoft the third

largest gaming company in the world by revenue after Tenson and Sony. What does Microsoft, get for all of this? Oh, you know, they've just acquired Candy Crush, Overwatch, Starcraft, Skylanders, and the two crown jewels, World of Warcraft, and Call of Duty, quoting CNBC. Activision, which is known for popular games such as Call of Duty and Tony Hawk's pro skater, has been mired in controversy for the last several months following reports of sexual misconduct and harassment among the company's executives. On Monday, Activision said it fired dozens of executives after an investigation. Under the deal, Activision CEO Bobby Kotik, who has faced calls to resign over the cultural problems within his company, will remain CEO and report to Microsoft's

Xbox boss Phil Spencer. Microsoft has gotten more aggressive with gaming over the past several years. It bought Minecraft Maker Mojang for $2.5 billion in 2014, and last year, Microsoft completed a $7.5 billion acquisition of GameMaker Bethesda. The deal also plays into a long-term vision for Microsoft as it competes with meta, formerly Facebook, to build technologies to create a virtual world called the Metaverse. In fact, Microsoft CEO Satcha Nadella was the first big tech CEO to publicly acknowledge the value of the Metaverse months before Meta CEO Mark Zuckerberg. Today, virtual worlds are dominated by gaming, but the hope is they expand to cater to other demographics and replace a lot of traditional social networking activity online, end quote. So let's unpack all of that.

A Metaverse play. Clearly, World of Warcraft and Call of Duty especially would be, you know, strong foundations for a Metaverse. But most immediately, apparently, Activision Games will be coming to Xbox Game Pass, Toot Suite, quoting Pure Xbox. This, of course, is massive news for Xbox Game Pass going forward where hopeful many Activision Blizzard games will launch on the service, given Microsoft's commitment to first-party titles arriving day one. Oh, and we should see some of the back catalog arrived to, quote, upon close of the acquisition, we will offer as many Activision Blizzard games as we can within the Xbox GamePass and PC Game Pass, both new titles and games from Activision Blizzard's Incredible Catalog. We also announced today that GamePass now has more than 25 million subscribers. As always, we look forward to continuing to add more value and more great games to GamePass, end quote. That was quoting from a Microsoft press release, but I'm continuing again. This is particularly big news, especially as Activision games don't usually end up in Game Pass. The publisher has worked closely with Sony in recent years, preventing much of anything from them coming to the service, end quote. So this is clearly an aggressive move against competitors now on behalf of Microsoft. P.S., that 25 million number from GamePass is up from 18 million Game Pass subscribers just a year ago.

and it's also clearly an aggressive move to the metaverse, you know, now-ish or later. Both things tie into this analysis from Nicholas De Leon on Twitter, quote, Microsoft has been 100% all-in on services since Nadella took over. They don't care what you use device-wise, as long as you use Microsoft services on it, i.e. Game Pass. Look at the lengths they were reportedly willing to go to to get on the iOS App Store. Put another way, why bother building Xboxes, which is hard and expensive, when you can just have a GamePass app on your TV. Microsoft has been building toward this. I don't really see this clarity of direction from Sony. Nintendo is a different matter, probably, end quote. Yes, and the metaverse will largely not be about hardware either, in theory, right? So, but also, yes, as we've

discussed, Activision has been the site of turmoil involving tons of labor, harassment, discrimination, and other issues. so that's probably why the deal is happening, the turmoil depressed Activision stock, which made it attractive to Microsoft. But as Laura Kate Dale tweeted, quote, If Microsoft is making this purchase knowing the state of the company, RE, ongoing lawsuits, and incredibly low consumer and worker trust, I hope that means they have a plan to institute actual change, but I'm not holding my breath for that. Microsoft basically just purchased a company mired in stories of abuse. If their first move is not to make serious change, a lot of that bad sentiment might start sticking to Microsoft too. Kotik remaining as CEO post-purchase is a bad sign for meaningful change.

Additionally, this is also a huge move further toward Microsoft's monopolization of the video game industry. This makes huge games like Call of Duty Microsoft exclusives now, one would assume. That's not healthy for the overall industry, end quote. So yes, one more thing. Do you think this deal might raise some antitrust eyebrows? Microsoft owns the platform, and increasingly they own the biggest game developers, as the great Peter Kafka tweeted, quote, Microsoft buying Activision makes a lot of sense. Microsoft has been buying game devs, and this is the biggest prize with a leadership team

submerged in self-inflicted scandal. Also, it earns Microsoft a seat at the big tech antitrust table, which they have avoided until now, end quote. I'm sure this is nothing, but coincidentally, there's an article in the Financial Times this morning looking at how Meta has filed dozens of patents to monetize the Metaverse, including a virtual store with sponsored items, eye and face tracking, and headsets, and more, quote, The Financial Times has reviewed hundreds of applications to the U.S. Patent and Trademark Office, many of which were granted this month. They reveal that Meta has patented multiple technologies that wield users' biometric data in order

to help power what the user sees and ensure their digital avatars are animated realistically. But the patents also indicate how the Silicon Valley Group intends to cash in on its virtual world with hyper-targeted advertising and sponsored content that mirrors its existing $85 billion a year ad-based business model. This includes proposals for a virtual store where users can buy digital goods or items that correspond with real-world goods that have been sponsored by brands. For us, the business model in the Metaverse is commerce-led. Nick Clegg, Meta's head of Global Affairs, told the Financial Times during a recent interview, clearly ads play a part in that, end quote.

The patents do not mean that meta will definitely build the technology, but they offer the clearest indication yet of how the company aims to make its immersive world into a reality. Some of the patents relate to eye and face tracking technology, typically collected in a headset via tiny cameras or sensors, which may be used to enhance a user's virtual or augmented reality experience. For example, a person will be shown brighter graphics where their gaze falls, or ensuring their avatar mirrors what they are doing in real life. One meta-patent, granted on January 4, lays out a system for tracking a user's facial expressions through a headset that will then, quote, adapt media content based on those responses. There is a wearable magnetic sensor

system to be placed around a torso for body pose tracking. The patent includes sketches of a user wearing the device but appearing in virtual reality as a soldier, complete with a sword and armor. Another patent proposes an avatar personalization engine that can create three-dimensional avatars based on a user's photos using tools including a so-called skin replicator. Meta aims to be able to simulate you down to every skin pore, every strand of hair, every micro-movement, said Noelle Martin, a legal reformer who has spent more than a year researching meta's human monitoring ambitions with the University of Western Australia. Quote, the objective is to create 3D replicas of people, places, and things so hyper-realistic and tactile that they're indistinguishable,

from what's real and then to intermediateate any range of services, in truth, they're undertaking a global human cloning program, end quote. Crypto.com has halted withdrawals from its platform and is requiring users to re-sign in and reset their two-factor authentication. Independent research shows crypto.com might have lost more than 4,600 eth, worth more than $15 million during a suspected hack, quoting to Crypt. Despite reports of missing funds, the platform has yet to confirm that it has indeed been attacked. With almost $3 billion in trading volume in the last 24 hours, Crypto.com is the industry's fourth largest centralized crypto exchange, according to Coin Gecko.

A household name in Asian markets, the Singapore-based exchange recently spent $700 million to buy the naming rights to the Staples Center, the Los Angeles home venue of the NBA's Lakers and Clippers. Despite users complaining about funds missing from their accounts, and Dogecoin, founder Billy Marcus pointing to odd activity on one of the Ethereum wallets associated with crypto.com, the exchange announced that withdrawals had resumed as of 1742 UTC on Monday. The events took a turn for the worst when security research company PeckShield took to Twitter in the early hours on Tuesday to reveal that crypto.com had lost at least 4,600-Eath around

$15 million in current prices. Peck Shield added that half of the stolen funds were sent to tornado cash, the Ethereum-centric mixing service. Pekshield told decrypt via a Twitter message that the true scale of the damage is definitely worse, their words. Quite remarkably, a few hours later, crypto.com, CEO Chris Marseleck said that no customer funds were lost. According to Marzlech, the exchange, quote, has hardened the infrastructure in response to the incident and will share a full postmortem after the internal investigation is completed, end quote. Samsung has unveiled its 4-nanometer Exinose 2,200 system on a chip with an X-Clips GPU using AMD's RDNA2 architecture, offering hardware accelerated ray tracing and variable rate shading, quoting CD-NET.

According to the South Korean tech giant, X-Clips will offer advanced graphic features, including hardware accelerated ray tracing, which simulates how light physically behaves in the real world inside the game, and variable rate shading, where shading rate in areas of the game can be lowered to optimize GPU workload. Xclips will also come with advanced multi-IP governor, a feature that manages power efficiency to reduce battery drain for high-resolution games, Samsung said. AMD, senior vice president of Radion said Xclips is, quote, the first result of multiple planned generations of AMD RDNA graphics in Exenos systems on a chip. Meanwhile, Exenose 2,200 also comes with an octacore CPU design that uses Arm's new Arm V9 CPU cores, which Samsung said have beefed up security and performance over Arm V8 cores. The CPU will have three clusters, the Cortex X2 flagship core, three Cortex A710 Big Core, and four Cortex A510 Little Cores.

According to Samsung, Exenose 22000 will also offer upgraded on-device AI, thanks to new neural processing units or NPUs that have double the performance of its predecessor. The NPU can be used with the image signal processor to support the taking of more realistic pictures with the camera. The image signal processor supports 108 megapixels in single camera mode and offers 4K HDR and 8K video recordings. Exxinose 2200 also comes with a 5G modem that meets 3GP release 16 standards and supports sub 6 gigahertz and m-m-wave spectrum bands, as well as ENDC, that group 4G and 5G signals. The modem offers up to 10 GbPS in maximum speed. Security features in Exxinos 2,200 include integrated secure element, root of trust, and in-line encryption for the memories, end quote. And yes, this is the announcement

that Samsung earlier announced and then mysteriously ghosted on. No word on why that happened, why there was a weak delay without any explanation, except for this statement from Samsung, quote, we have timed the announcement after customer communication. We cannot answer questions that are based on rumors, end quote. Finally today, China's My 2020 Olympics app, which is mandatory for any attendees of the upcoming games to be used to report travel and health data reportedly has serious encryption flaws and contains censorship keyword lists. Quoting, Citizen Lab. My 2020, an app mandated for use by all attendees of the 2022 Olympic Games in Beijing has a simple but devastating flaw where encryption protecting users' voice audio and file transfers

can be trivially sidestepped. Health customs forms, which transmit passport details, demographic information, and medical and travel history are also vulnerable. Server responses can also be spoofed, allowing an attacker to display fake instructions to users. My 2020 is fairly straightforward about the type of of data it collects from users in its public-facing documents. However, as the app collects a range of highly sensitive medical information, it is unclear with whom or which organizations it shares this information. My 2020 includes features that allow users to report politically sensitive content. The app also includes a censorship keyword list, which, while presently inactive,

targets a variety of political topics, including domestic issues such as Zhang Zhang and Tibet, as well as references to Chinese government agencies. While the vendor did not respond to our security disclosure, we find that the app's security deficits may not only violate Google's unwanted software policy and Apple's App Store guidelines, but also China's own laws and national standards pertaining to privacy protection, providing potential avenues for future redress, end quote. But this is actually not the first tech-related controversy surrounding the upcoming Olympic Games, quoting from USA Today. Olympic athletes from several countries, including the United States, are being encouraged to leave

their personal cell phones and laptops at home next month due to cyber surveillance concerns at the 2022 Beijing Winter Games. Dutch newspaper D. Vauxkrant first reported Tuesday that the Dutch Olympic Committee is, quote, anticipating Chinese surveillance during the games, end quote, and has therefore instructed athletes to not bring their personal electronic devices to Beijing. Spokespeople for the British Olympic Association and the Australian Olympic Committee have since told the Guardian and the age, respectively, that they made similar recommendations to their athletes. We've reminded all Team Canada members that the Olympic Games present a unique opportunity for cybercrime. The Canadian Olympic Committee said in a statement and recommended that they be extra diligent at games, including considering leaving personal devices at home, limiting personal information stored on devices brought to the games, and to practice good cyber hygiene at all times. quote. Meanwhile, a technology bulletin distributed by Team USA states that rental slash disposable computers

and burner phones are, quote, encouraged for members of its delegation, end quote. You know what game hooked me this weekend? Genshin Impact. Is anyone else playing this? I know it's a breath of the wild ripoff, but it's hell of fun and it's mostly free, i.e., you can get really, really far in this game, like hours and hours in. If you only care about exploration and stuff before even the idea of paying up comes up, it's weirdly impressive how deep this game is for a free-to-play, at least at the beginning game.

And the fact that I can pick the game up on my phone or my iPad and be exactly where I left off, it's kind of mind-blowing. I know I'm late to this one, but hey, port this thing to the portal, and I would play this all day long in VR as well. Talk to you tomorrow.