November 30, 2021

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The hype for “Halo Infinite” is real. After a much talked about augmented reality integration with Oregon Ducks football, the game’s multiplayer beta is the most played game on Xbox — beating out top-of-the-chart mainstays “Fortnite” and “Call of Duty: Warzone.”

Disney to Pour $33B Into Content as Pay-TV Subscribers Fall

Ivan Pierre Aguirre-USA TODAY Sports/Design: Alex Brooks

Disney is ramping up content spending while ESPN — one of its major media revenue drivers — faces an increasingly tricky balance between traditional media distribution and streaming.

The Mouse said [[link removed]] it would spend $33 billion on content in fiscal 2022, which began on Oct. 1. Revealed in the company’s annual report to the Securities and Exchange Commission filed last week, the sum represents a 32% increase from the $25 billion it spent in fiscal 2021.

In the same filing, Disney revealed a 10% drop in pay-TV subscribers with access to ESPN. That figure fell to 76 million, from 84 million at the end of fiscal 2020.

Disney charges [[link removed]] cable providers nearly $10 per subscriber per month for the package of ESPN and ESPN2.ESPN+, which costs $6.99 per month, ended the fiscal year with 17 million subscribers, up 66% year-over-year.ESPN News and ESPNU, which each had 62 million pay-TV subscribers a year ago, dropped to a respective 59 million and 51 million in fiscal 2021.

Disney has denied reports that it could spin off ESPN but indicated that it may consider bundling ESPN+, Disney+, and Hulu into a single service at a later date — it’s currently restricted by media rights deals.

In the meantime, the company will add ESPN+ and Disney+ to its Hulu live TV bundle ($64.99 per month) in December.

How World Champion Magnus Carlsen Rode the Chess Boom

Design: Alex Brooks

World chess champion Magnus Carlsen has both stoked and parlayed a boom in chess interest to turn his fame and dominance in the age-old game into a major business.

Carlsen cofounded Play Magnus in 2013, the same year he became world champion. The company has expanded [[link removed]] from a training app to include a playing platform, lessons, and a publishing arm.

In February, it listed on the Oslo stock exchange, becoming the only publicly traded chess company in the world.

Play Magnus saw [[link removed]] both its revenues and expenses grow in the last year, with third-quarter earnings growing 176% year-over-year to $5.5 million.However, expenses have risen along with revenue, and the company posted a $5.3 million pre-tax loss in the quarter.Play Magnus had $22 million in cash as of Nov. 15.

The company has worked to bring mainstream interest to chess through its PogChamps tournament, which features popular non-chess streamers and other celebrities.

Interest in chess has risen [[link removed]] over the last year, particularly after the release of the hit Netflix show “The Queen’s Gambit” in November 2020, which was streamed by 62 million households in its first 28 days.

Popular chess playing and teaching site chess.com added 1 million accounts each month for the 12 months starting in March 2020 — including 2.8 million in November of that year.

Carlsen began the defense of his title last Wednesday against grandmaster Ian Nepomniachtchi. The first three games of the 14-match tournament ended in draws.

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Lululemon Fires Back After Peloton Sues Over Apparel

Lululemon/Design: Alex Brooks

Lululemon has responded after Peloton sued the clothing brand asking that a federal court declare that the connected fitness company didn’t infringe on athletic apparel designs.

The Vancouver-based company filed a lawsuit of its own against Peloton, seeking injunction against Peloton’s alleged infringement of intellectual property rights, damages, and other monetary relief.

The suit filed in the Central District of California follows Peloton and Lululemon ending a five-year cobranding deal in September and Lululemon issuing a cease-and-desist letter earlier this month to Peloton over the launch of its new apparel line two months prior.

Peloton’s new apparel line is an effort to diversify its business following a tumultuous year for the connected fitness company known for its at-home bikes and treadmills.

In May, the company issued a voluntary recall on the Peloton Tread+ treadmill following at least 70 related injuries and the death of a child.Earlier this month, Peloton filed [[link removed]] lawsuits against Echelon and iFit over alleged patent infringement related to the company’s on-demand fitness classes.The company plans [[link removed]] to sell $1.1 billion of its Class A common stock in an effort to come up with more cash as demand for its products slows.

Peloton missed Wall Street revenue estimates of $810.7 million in fiscal Q1 2022, generating only $805.52 million in revenue for the quarter.

Niantic Raises $300M to Build Metaverse

Niantic/Design: Alex Brooks

Niantic, the creator of augmented reality gaming hit “Pokémon Go,” has raised $300 million, valuing the company at $9 billion.

The California-based company will use the money from tech-focused investment manager Coatue to build the “real-world metaverse.”

“You could call it the ‘real-world metaverse’ to distinguish it from the virtual video game version,” Niantic founder and CEO John Hanke said [[link removed]] last month. “I think we are just going to experience it as reality made better: one infused with data, information, services, and interactive creations.”

Niantic adds to a growing list of tech companies building metaverse apps, which are projected [[link removed]] to reach over $3 billion in consumer spending in 2022.

Microsoft announced an integration with its office-focused Microsoft Teams software and metaverse platform Mesh with an eye toward gaming.Disney CEO Bob Chapek said he envisions building a metaverse using streaming service Disney+ as a platform.Nike partnered with Roblox to build Nikeland, a virtual playspace featuring courts, arenas, and product showrooms with digital shoes and apparel.Epic Games is building a metaverse with a goal to reach 1 billion users, citing its potential to be a “multi-trillion-dollar part of the world economy.”

Last month, Niantic generated [[link removed]] $62 million in revenue from its mobile apps, with $29 million coming from iOS and $33 million from Android.

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Conversation Starters Fenway Sports Group and Liverpool chairman Tom Werner revealed [[link removed]] that Nike plans on creating a new product line with LeBron James and Liverpool F.C. The Pac-12, Big Ten, and ACC announced [[link removed]] “Teammates for Mental Health,” a joint initiative aimed at raising mental health awareness for their athletes. The NFL partnered [[link removed]] with Melon to create a virtual store in the video game “Roblox.” UConn basketball player Paige Bueckers has signed [[link removed]] a multiyear NIL deal with Gatorade, becoming the company’s first college athlete partner. Today's Action

NHL

07:08 PM

Sharks (+125) at Devils (-150)

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NBA

10:10 PM

Lakers (-180) at Kings (+155)

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NCAAM

09:30 PM

Duke (-145) at Ohio State (+125)

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*All times are EST unless otherwise noted.

*Odds/lines subject to change. T&Cs apply. See [[link removed]] for details.

Question Of The Day

Do you play chess?

Yes [[link removed]] No [[link removed]]

Monday’s Answer

Only 35% of respondents think FIFA will win its proposal to host biennial World Cups.

Written by Owen Poindexter [[link removed]], Justin Byers [[link removed]]

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