Microsoft to acquire Activision for $68.7 billion / Google is building an AR headset / The 5G battle between the FAA, AT&T, Verizon, and airlines

Episode Summary

Executive Summary: The episode centers on Microsoft’s $68.7B all-cash acquisition of Activision Blizzard, framed as both a gaming/content strategy and a bid to strengthen Microsoft’s future in cloud gaming and the ‘metaverse.’ It also covers Google’s revived AR headset ambitions, and a heated discussion of Senate antitrust bills that could reshape platform power, app stores, and de-platforming rules.

Main Topics: Microsoft’s acquisition of Activision Blizzard (Priority: 5/5): Ash Parrish breaks down the scale, structure, and likely rationale behind Microsoft’s massive all-cash purchase of Activision Blizzard, including the role of Phil Spencer, Game Pass, and the troubled state of Activision Blizzard. Bobby Kotick, workplace abuse, and the future of Activision Blizzard leadership (Priority: 5/5): The hosts discuss the company’s abuse/harassment scandals, employee strikes, and why the acquisition likely functions as an exit path for embattled CEO Bobby Kotick while the deal slowly closes. Microsoft’s metaverse and cloud-gaming strategy (Priority: 4/5): The conversation argues that ‘metaverse’ language is largely corporate signaling, while the real strategic value is Microsoft’s need for content to support Game Pass, cloud gaming, and future distribution shifts. Google’s AR headset and mixed-reality ambitions (Priority: 4/5): Alex Heath’s scoop reveals Project Iris, a new Google AR/mixed-reality headset effort, alongside Google’s Starline display tech, highlighting both the company’s renewed commitment and its history of stop-start execution. Tech antitrust legislation and platform regulation (Priority: 5/5): Russell Brandom joins to discuss Senate antitrust bills, platform self-preferencing, sideloading, and the broader fight over how to regulate big tech without creating loopholes for bad-faith lawsuits. The future of platform ecosystems and developer control (Priority: 4/5): Across the Microsoft, Google, Apple, and Meta discussions, the episode explores how closed platforms, app stores, content distribution, and developer ecosystems may shape the next wave of consumer tech.

Key Arguments: Microsoft is not just buying a game company; it is buying content and distribution leverage for Game Pass, cloud gaming, and future hardware/software ecosystems. The ‘metaverse’ explanation is mostly buzzword marketing; the real reasons for the deal are games, recurring revenue, and strategic control over gaming content. Activision Blizzard’s corporate culture crisis and worker strikes make the company vulnerable and make an eventual leadership change, especially Bobby Kotick’s exit, seem likely. Google’s new AR work shows it still wants to compete in headsets, but its history of abandoning products makes its commitment uncertain. The Senate antitrust bills aim at platform self-preferencing, but the drafting raises difficult questions about maps, search, app stores, and de-platforming. Regulating tech platforms is politically bipartisan in a general sense, but the specific bills are vulnerable to lobbying, legal ambiguity, and amendments. A major long-term issue is distribution: if games move from one-time purchases to subscriptions and cloud access, platform control becomes far more important than individual titles.

Data Points: Microsoft acquisition value: $68.7 billion - All-cash purchase of Activision Blizzard announced Tuesday. Microsoft’s previous largest deal: $26 billion - Purchase of LinkedIn, used as a comparison to show how much larger the Activision deal is. Activision deal premium: 45% - Described as a discount-adjusted premium on Activision’s stock price. Bethesda acquisition: $6 billion - Microsoft’s prior major gaming purchase in 2021. Deal close timeline: Before end of Microsoft fiscal year 2023 - Expected closing window noted as June 2023, roughly 18 months from announcement. Microsoft gaming leadership: Phil Spencer promoted to CEO of Microsoft gaming - He would oversee Activision after the acquisition closes. Raven Software strike duration: 7th week - QA testers at the subsidiary were striking at the time of discussion. Free COVID tests site traffic: More traffic than all other .gov sites combined - Used as an example of the government website launch functioning unusually well. Free COVID tests: 4 - Number of tests available through the USPS-run website. Free at-home tests distribution: 400 million - White House plan to distribute tests via pharmacies. Google AR headset project: Project Iris - Alex Heath’s scoop on Google’s revived headset efforts. Starline target price: Under $10,000 - Google’s goal for bringing the display tech cost down for wider deployment. Starline commercialization target: 2024 - Target year mentioned for possible commercial rollout. Senate committee vote: 16 to 6 - The antitrust bill advanced out of committee with some lawmakers indicating reservations about the current text. Apple/Google billing concern: Sideloading and platform control - Referenced as a core issue in the open app markets debate. LinkedIn ad credit promotion: $250 spend / $250 credit - Ad read included a LinkedIn ads promotion. Wealthfront APY: 4% APY - Ad read for Wealthfront cash account.

Pivotal Quotes: "we are actively looking for mergers and acquisitions, and we want to buy up everything we want to buy up" — Ash Parrish: Describing Phil Spencer’s pre-existing strategy and Microsoft’s openness to acquisitions. "I think this just fully encapsulates what metaverse has become, which is a meaningless buzzword that CEOs want to use" — Alex Heath: Commenting on how Microsoft used metaverse language in the Activision announcement. "the abuses of big tech are such that I am happy to be to unleash the trial lawyers" — Ted Cruz (quoted by Russell Brandom): Discussing the antitrust bill amendment that would let users sue platforms.

Implications: Microsoft’s deal could reshape game distribution, platform power, and studio consolidation. Google’s AR push suggests headset competition is heating up. The antitrust bills may force clearer rules for app stores and platforms, but also risk years of litigation and lobbying battles.