The Sandbox (SAND) Extends Winning Streak to Seven on Metaverse News

Key Insights:

  • It was a bullish Saturday session, with The Sandbox rallying by 16.3%.
  • Metaverse news updates delivered support, with tech giants Meta, Microsoft, and Sony among big names forming the Metaverse Standards Forum.
  • Technical indicators are bullish, with SAND sitting above the 200-day.

On Saturday, The Sandbox (SAND) jumped by 16.3%, supported by metaverse news updates. Following an 8.6% rally on Friday, The Sandbox ended the day at $1.278.

A mixed morning saw SAND fall to an early low of $1.0780 before making a move.

Steering clear of the Major Support Levels, SAND broke through the day’s Major Resistance Levels to a late high of $1.329.

A late pullback, however, saw SAND fall back through the Third Major Resistance Level at $1.3063 to end the day at $1.278.

While finding support from the broader market, Metaverse news updates delivered the breakout session. The Sandbox extended the current winning streak to seven sessions.

Tech Giants Form the Metaverse Standards Forum to Evolve Web3

This week, Epic Games, Meta, Microsoft, and Sony were among a list of tech giants announcing the formation of the Metaverse Standards Forum.

More than 30 names from the tech industry have formed a partnership to support the evolution of the metaverse.

According to the press release,

“The Metaverse Standards Forum brings together leading standards organizations and companies for industry-wide cooperation on interoperability standards needed to build the open metaverse. The forum will explore where the lack of interoperability is holding back metaverse deployment and how the work of Standards Developing Organizations (SDOs) defining and evolving needed standards may be coordinated and accelerated.”

The press release went on to say,

“Open to any organization at no cost, the Forum will focus on pragmatic, action-based projects such as implementation prototyping, hackathons, plugfests, and open-source tooling to accelerate the testing and adoption of metaverse standards, while also developing consistent terminology and deployment guidelines.”

Vishal Shah, vice president of Metaverse at Meta, said,

“Building a metaverse for everyone will require an industry-wide focus on common standards. The Metaverse Standards Forum can drive the collaboration that’s needed to make this possible, and Meta is committed to this work. Creators, developers, and companies will all benefit from the technologies and experiences that will be made possible by common protocols.”

For The Sandbox and other metaverse-related tokens, the new focus on driving the adoption of the metaverse is price positive.

The Sandbox (SAND) Price Action

At the time of writing, SAND was down 0.78% to $1.270.

A mixed start to the day saw SAND rise to an early morning high of $1.294 before falling to a low of $1.248.

SAND left the Support and Resistance Levels untested early on.

SAND on metaverse breakout
SANDUSD 2605 Daily Chart

Technical Indicators

SAND will need to avoid the $1.2285 pivot to target the First Major Resistance Level at $1.3782.

SAND would need broader crypto market support to breakout from the Saturday high of $1.329.

An extended rally would test resistance at $1.40 and the Second Major Resistance Level at $1.4794. The Third Major Resistance Level sits at $1.7303.

A fall through the pivot would bring the First Major Support Level at $1.1277 into play. Barring an extended sell-off, SAND should avoid sub-$1.10. The Second Major Support Level sits at $0.9770.

SAND eyes $1.40
SANDUSD 2605 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bullish signal.

This morning, SAND sat above the 200-day EMA, currently at $1.1740. The 50-day EMA converged on the 100-day EMA, providing support. The 100-day EMA narrowed to the 200-day EMA; SAND price positive.

A bullish cross of the 50-day EMA through the 100-day EMA would support a run at $1.40. However, SAND will need to avoid sub-$1.20 to extend the winning streak to eight sessions.

EMAs bullish
SANDUSD 2605 4 Hourly Chart

Manchester City FC Partners with Quidd to Launch New NFT Collection

Key Insights:

  • English Premier League side Manchester City FC partners with Animoca Brands subsidiary to launch a new 3-D NFT collection.
  • Manchester City FC has been a strong advocate of Web3, with a Sony partnership taking the club to the metaverse.
  • On the cusp of winning the English Premier League title, the Manchester City Fan Token (CITY) sits just behind Paris Saint-Germain, with a market cap of $29.5 million.

Manchester City Football Club is one of the leading English Premier League (EPL) sides and currently sits at the top of the table, with one game remaining. This week, City and Animoca Brands subsidiary Quidd launch a new NFT collection.

The club is a strong advocate of Web3 and is particularly active in the digital space, with plans to expand into the metaverse.

Manchester City FC and Quidd Marketplace Launch NFT Collection

On Friday, Animoca Brands announced a new collaboration between subsidiary Quidd and Manchester City FC.

Taking to Twitter, Animoca Brands tweeted,

“Tomorrow our subsidiary @quidd launches @ManCity’s Debut Collection with first-of-its-kind, fully interactive, beautifully-styled 3D cards. You don’t want to miss that!”

According to the Quidd marketplace,

“The collaboration features four drops starting on May 20th and extending through the end of the season. Fans will discover not only the 3D player cards – a first in sports collecting – but also sets that highlight major moments in the club’s recent history, with archival details found when spinning the card around to its back.”

For avid Man City fans and NFT collectors, a Signature Gold Set is also on offer. According to Quidd,

“There will also be a Man City Debut Signature Gold set, where only the top 500 ranked collectors in the Man City Debut set at exactly 11am EST / 4pm BST on Monday, May 23 will unlock 1 print of each of the 6 cards.”

 

The latest NFT collaboration follows a partnership with Sony to take Premiership football to the metaverse.

Socios Fan Tokens Enjoy a Breakout Week on Listing News

This week, Fan Tokens got a boost in response to news of  BitPanda listing seven Socios Fan Tokens on Wednesday.

Manchester City Fan Token (CITY) was one of the seven. The remaining six included Paris Saint-Germain (PSG), Juventus Fan Token (JUV), Atletico De Madrid Fan Token (ATM), Santos FC Fan Token (SANTOS), FC Porto Fan Token (PORTO), and FC Barcelona Fan Token (BAR).

Socios fan tokens are on the Chiliz (CHZ) Chain, a Proof-of-Authority Ethereum-based sidechain.

Adding to the upside for Fan Tokens were enhancements to drive fan engagement.

On Tuesday, Chiliz announced the launch of Scoville Testnet Phase 2. Key feature enhancements include the launch of PepperSwap, a decentralized exchange (DEX), and Fan Token Test Surveys.

For the fans, the Fan Token Test Survey delivers a mouth-watering prospect. The ultimate goal is for Fan Token holders to vote on club decisions.

According to CoinGecko, Paris Saint-Germain ranks #1 with a market cap of $30.06 million. Manchester City Fan Token sits at #2, with a market cap of $29.46 million.

In 7-days, Paris Saint-Germain Fan Token has surged 96.9%, with Manchester City Fan Token up 58.9%.

CITY Ranks #2 ahead of tomorrow's EPL game.
MarketCap Table 210522

CITY Price Action

At the time of writing, CITY was down 1.09% to $7.7350. A mixed start to the day saw CITY rise to an early morning high of $7.8375 before falling to a low of $7.4725.

A move back through to $8.00 would signal another breakout day ahead. Near-term, the bulls will be eyeing a run at May’s high of $12.7700.

Price action for the weekend will be depend on tomorrow’s final game of the EPL season.

A Manchester City FC win over Steven Gerrard’s Aston Villa would seal the English Premier League title and support a weekend breakout session. A City loss and a Liverpool FC win against Wolverhampton Wanderers would give the reds the title and a shot at the much-hyped quadruple.

A City victory would bring $12 into play.
CITYUSD 21522 Daily Chart.

Epic Games and Lego to Build Metaverse For Kids Following Funding Round

Key Insights:

  • Epic, Sony, and Lego will team up to build a safe virtual world for kids.
  • Epic Games has raised $2 billion from the two investors.
  • Safety, privacy, and parental control will be features of the new virtual world.

The company behind the wildly popular Fortnite game has laid out its plans for Metaverse expansion following a massive funding round. The $2 billion cash injection came from entertainment giant Sony and Kirkbi, the parent company of the Lego Group, who put in $1 billion each.

In the April 11 announcement, Epic Games stated that the three companies highly value both creators and players. They aim to create new social entertainment exploring the connection between the digital and physical worlds.

The announcement comes just a few days after Epic revealed a Lego partnership that would involve the development of a Metaverse for kids. The company was valued at $31.5 billion following the raise.

Sony Deepening Metaverse Relationship

Epic Games is no stranger to epic funding rounds. The firm raised $1 billion in April 2021, including $200 million from Sony.

Kenichiro Yoshida, Chairman, President, and CEO of the Sony Group Corporation, said that the firm wants to deepen its relationship in the Metaverse field before adding:

“We are also confident that Epic’s expertise, including their powerful game engine, combined with Sony’s technologies, will accelerate our various efforts such as the development of new digital fan experiences in sports and our virtual production initiatives.”

Kirkby CEO Søren Thorup Sørensen added that a proportion of its investments is focused on trends the firm believes will impact the future world that children will live in. Epic Games CEO Tim Sweeney continued the narrative stating that the investment will accelerate its work to build the Metaverse.

Epic and Lego have yet to release details on what they have planned for their new virtual world. However, principles regarding child safety, privacy, and well-being were outlined as a priority. They would also equip children and adults with tools that give them control over their digital experience.

A Safer Virtual World

The Metaverse concept is a broad one, with several different companies planning to build their own versions of what a virtual world should be.

Safety and privacy concerns have already been raised, especially concerning companies such as Meta (formerly Facebook) that do not have the best track record regarding privacy and online security and protection, especially for minors.

Football Club PSG Enters the Metaverse with Trademark Filing

Key Insights:

  • PSG is arriving in the metaverse with a trademark application filing.
  • The move aims to protect the brand as the club moves into the metaverse.
  • Previously, FC Manchester City announced the creation of the world’s first football stadium inside the metaverse.

The digital asset market has seen a staggering growth in the last 12-months alongside the intersectoral expansion. Interestingly, a blossoming relationship between crypto exchanges, NFTs, and sports was one of the key highlights of the crypto market rise over the last year.

Notably, football club Paris Saint-Germain recently took a significant step into the metaverse space, furthering the crypto market’s amalgamation with sports.

Sports, NFT and Metaverse Hype

French football club Paris Saint-Germain popularly called PSG, has filed a new trademark application to register the name ‘PARIS SAINT-GERMAIN’ for non-fungible tokens (NFT) and metaverse products and services.

On March 21, metaverse trademark attorney Michael Kondoudis revealed the filing details. The attorney announced via Twitter that the trademark filing took place on March 16.

According to the information disclosed, the trademark will cover NFT backed multimedia, crypto wallets, managing cryptocurrency transactions, virtual clothing, sports gear, and electronics.

In the press release, the Washington DC-based lawyer said,

“Paris Saint-Germain is one of the world’s best-known football clubs, and the value attached to the team’s name and brand is substantial. This filing represents the next logical step to protect the brand as it moves into the metaverse.”

Kondoudis further stated,

“PSG sees the potential of the metaverse and is preparing its trademark for the virtual economy that will dominate it. This move follows the trend by other professional sports brands to begin preparations to participate in the metaverse.”

Rising Interest in The Metaverse

Interest in the metaverse space has witnessed exceptional growth in the last year. Top players from music, fashion, and sports have entered the virtual space.

Recently, FXEmpire reported about the English football club Manchester City building the world’s first football stadium inside the metaverse in partnership with Sony.

News about the Australian Open and the first-ever tennis tournament on Decentraland (MANA) hit the wires in January. The Australian Open replicated Melbourne Park in Decentraland, giving tennis fans a taste of Melbourne tennis.

All in all, a sheer rise in interest from sports organizations has been noted over the last year. Kondoudis anticipates a surge in the number of trademark registrations from the professional sports industry for non-traditional and virtual goods and services in the following year.

About the rising interest in the metaverse, the attorney said:

“We expect the number of trademark filings from the professional sports sector for NFT and virtual products and services to increase over the next twelve months as brands come to appreciate the need for protections in the metaverse.”

Coinbase Announces Plan to Launch NFT Marketplace

Key Insights:

  • Coinbase eyes a piece of the NFT marketplace pie.
  • The US-listed crypto firm plans to bring innovation to the NFT sector.
  • At launch, hundreds of NFT creators will bring content to Coinbase NFT.

Coinbase is a crypto exchange based in the US and listed on the NASDAQ. Supporting crypto trading, Coinbase is one of the world’s leading crypto exchanges, with a global presence.

Coinbase Plans a Move into the NFT Sector

Overnight, Coinbase took to Twitter, announcing the imminent launch of Coinbase NFT. Coinbase NFT is a peer-to-peer marketplace allowing users to discover, mint, purchase, and showcase NFTs.

According to the announcement, Coinbase NFT met with more than a hundred creators looking to expedite the launch of the NFT marketplace.

Competing with other NFT marketplaces, including OpenSea and LooksRare (LOOKS), Coinbase NFT will aim to provide a more collaborative environment by supporting interaction between platform users and creators.

Since first announcing the planned launch of Coinbase NFT in October 2021, more than 2.5 million people have reportedly joined the Coinbase NFT waitlist.

In late 2021, Coinbase CEO Brian Armstrong talked up the NFT sector, reportedly saying that Coinbase NFT could be more successful than its cryptocurrency business. When considering the Coinbase brand, other NFT marketplaces may face tough competition ahead.

With creators currently minting on other NFT marketplaces, it is likely for them to join the Coinbase NFT community for access to more than 2.5m waitlisted users.

Regulatory Landscape Should Favor Coinbase NFT

In recent months, NFTs have garnered greater regulatory scrutiny. Record trading volumes at the start of the year coincided with a marked increase in regulatory activity.

Several jurisdictions have raised concerns over NFTs and the need for greater regulatory oversight. Despite the increase in regulatory chatter, mainstream names have flooded into the virtual world.

Big industry names entering the NFT space come from the fashion, healthcare, music, sport, and retail sectors. Some of the biggest brands include Sony, Walmart, Victoria’s Secret, Nike, the NFL, the MLB, the NBA, and UFC fighting.

The heightened interest in NFTs, rising number of trademark applications, and its continued compliance with US laws should position Coinbase NFT as a market leader. Following news of KYC requirements for the next Bored Ape Yacht Club release, Coinbase will also have the appropriate infrastructure in place to hit the ground running should US regulators impose tighter measures to protect investors.

The Sandbox Goes K-Pop with Cube Entertainment Partnership

Key Insights:

  • The Sandbox and Cube Partnership embark on a K-Culture mission in virtuality.
  • Joint venture AniCube aims to spread K-Culture globally with NFTs and via the Metaverse.
  • K-Pop sensation BTS and its forays into the Metaverse have paved the way for K-Culture to go global.

It has been a busy week for NFTs, the Metaverse, and the music industry. Industry giants of the music industry have entered the NFT marketplace and the Metaverse. Music labels Warner Music Group (WMG), Sony Music, Universal Music Group, Tencent are big names that have gone virtual. Leading the way since last year, however, has been K-Pop band BTS.

The Sandbox Partners with Cube on K-Pop Move

On Wednesday, Animoca Brands and The Sandbox (SAND) announced a partnership with Cube Entertainment. The collaboration aims to take K-Culture global via NFTs and the Metaverse.

According to the announcement, “AniCube” is established in a joint venture between Animoca Brands and Cube Entertainment to focus on business expansion in the Metaverse and NFTs.

The Sandbox and Cube entertainment will hold events to “introduce K-Culture in the Metaverse.” K-Culture will include K-Pop. A K-Culture complex in Cube Entertainment-owned LAND will allow users to virtually experience K-Culture from across the world.

The joint partnership looks to leverage off the global success of K-Pop bands, including BTS and BlackPink. Animoca Brands placed K-Pop as the driving force behind the likely success of the partnership with Cube Entertainment.

Cube Entertainment is a South Korean record label. Artists under the Cube Entertainment banner include Jo Kwon, Yoo Seonho. Bands include BTOB, CLC, PENTAGON (G)I-DLE, and LIGHTSUM.

Global K-Pop Sensation BTS Paved the Metaverse Way

Globally renowned K-Pop band BTS has seen success in the virtual world. In 2020, K-Pop phenomenon BTS held a virtual concert, Bang Bang Con The Live, which reportedly drew 756,000 global viewers. According to ELLE, the event raked in $20m.

The MAP OF THE SOUL ON:E live stream sold an even more impressive 993,000 tickets across 191 countries. According to Bandwagon, the live stream brought in an estimated $43m in sales.

AniCube also follows in the footsteps of a U.S-South Korean partnership that began in January. U.S domiciled Metaverse concert organizer Animal Concerts partnered with South Korea’s Klatyn blockchain to host music concerts in the Metaverse. The partnership places focus on the Korean music scene and K-Pop in particular.

Sony and Universal Go NFT with Bob Dylan and Miles Davis

Key Insights:

  • Sony Music and Universal Music Group join a growing list of music industry titans entering the NFT space.
  • Fan engagement is the name of the game.
  • Music legends including David Bowie, Bob Dylan, and Miles Davis are among big names going digital this year.

It has been a busy first quarter for the music industry, with interest in NFTs and the Metaverse continuing to grow. Driven by a surge in NFT marketplace trading volumes at the start of the year, a number of major names in the music business have taken to NFTs and purchased LAND in the Sandbox (SAND).

Sony and Universal Go NFT

On Wednesday, Solana (SOL) blockchain-focused Snowcrash announced the involvement of two major music companies in the start-up NFT marketplace.

Sony Music and Universal Music Group (UMG) will reportedly become part of the platform. The news comes ahead of planned Miles Davis and Bob Dylan NFT drops.

According to the report, Sony Music aims to develop opportunities for signed recording artists, with UMG taking a similar view. Both see NFTs as an opportunity for music artists to have better engagement with NFT creators and music fans.

Sony Music and Universal Music Group have reportedly spent a whopping $550m buying Bob Dylan’s music rights alone. According to the report, UMG spent close to $400m in 2020, with Sony buying his recorded music rights for $150m in 2021.

The link between Snowcrash and Bob Dylan is significant. Bob Dylan’s son Jesse Dylan is a co-founder of Snowcrash. Snowcrash and the Metaverse are also closely linked. Snow Crash is the name of a 1992 Sci-fi novel that introduced the concept of the Metaverse.

Universal Music Group and Sony Music Join Other Music Titans in Virtuality

Sony Music and UMG join a growing list of industry giants and artists going virtual.

Earlier this year, Music industry powerhouse Warner Music Group (WMG) purchased LAND in the Sandbox (SAND). WMG purchased a beachfront property in the Metaverse to build a musical theme park and concert venue.

For the music industry, it appears to be a case of “it’s now or never.” Some may even argue that the giants of the music industry have been slow to embrace NFTs and the Metaverse.

In 2020, K-Pop phenomenon BTS held a virtual concert, Bang Bang Con The Live, which reportedly drew 756,000 global viewers. According to ELLE, the event raked in $20m. The MAP OF THE SOUL ON:E live stream sold an even more impressive 993,000 tickets across 191 countries. According to Bandwagon, the live stream brought in an estimated $43m in sales.

With the music legends David Bowie, Kurt Cobain, John Lennon, and the Beatles, and the likes of Dolly Parton and John Legend embracing NFTs and the Metaverse, activity across NFT marketplaces and the Metaverse are only going to accelerate.

Alongside Snowcrash, other major NFT marketplaces linked to the music industry include Rarible (RARI), OpenSea, LooksRare (LOOKS), Solanart, Solsea, and Starly (Starly).

North Korean Hackers Stole Over $200 Million Worth of Ethereum in 2021

A new report from blockchain analytics firm, Chainalysis, has revealed that North Korean hackers stole more Ethereum than any other digital asset in 2021. These cybercriminals now appear to have changed their targets from corporations and ransomware to cryptocurrency exchanges.

North Korean Hackers Prefer Ethereum 

In 2021, the state-sponsored hackers launched at least seven attacks and stole almost $400 million worth of digital assets. The hacks focused on centralized exchanges and investment firms, with funds siphoned out of the hot wallets of these organizations into state-controlled wallets.

Perhaps what’s most notable about the attacks was the tokens stolen. 58% of stolen assets were Ethereum, and Bitcoin was only 20%. The rest were ERC-20 tokens and altcoins.

Chainalysis identified Lazarus as the most notorious of the several groups behind this attack. The group, sponsored by the North Korean intelligence unit, first became popular in 2018 after the WannaCry and Sony Pictures attacks.

It also discovered that the stolen digital assets were usually laundered using multiple mixers and decentralized exchanges to hide their trail. However, the hackers still hold about $170 million of unlaundered digital assets, some for up to 6 years.

It should be noted that the growing rate of cybercrimes involving crypto has become a huge cause for concern. 

While it accounts for a small percentage of financial crimes or even crypto transactions, these attacks have led to renewed calls for regulations by several government stakeholders.

Why They Might be Targeting Ethereum

This report shows the role that decentralized exchanges unwittingly play in facilitating these crimes. Since Ether is the native currency on Ethereum, where most of these DEXs and mixers are, it’s understandable why hackers prefer it. But this could have serious implications as more countries attempt to regulate the crypto space.

Regulating the decentralized finance sector might be a little tricky given its permissionless nature. Though regulations in the crypto space is still very much in its early stages, it may take a while before regulatory activity shifts to DeFi

As of press time, the value of Ethereum had fallen by close to 3% within the last 24 hours to $3268, continuing its current red run which has seen it shed 33% of its ATH.

Universal Music Valued Around $39 Billion Ahead of Stock Market Debut

France’s Vivendi is spinning off Universal and on Monday set a reference price for the listing at 18.5 euros per share, according to a statement issued by Euronext.

Universal Music Group’s (UMG) listing will be Europe’s largest this year and will hand 60% of shares to Vivendi shareholders.

Universal is betting that a boom in streaming led by Spotify that has fuelled royalty revenue and profit growth for several years still has a long way to run, in a music industry it dominates along with Warner and Sony Music, part of Sony Group Corp.

Its flotation carries high stakes for Canal+ owner Vivendi, which hopes to rid itself of a conglomerate discount. However, the listing raises questions about Vivendi’s strategy once it parts ways with its cash cow, in which it will retain only a 10% stake.

Several high-profile investors have also already snapped up large Universal stakes, banking in part on the group’s back catalogue, which includes the likes of Bob Dylan and the Beatles. They also hope deals with ad-supported software and social media platforms such as Alphabet Inc’s YouTube and TikTok will sustain its performance and valuation.

U.S. billionaire William Ackman suffered a setback when his attempt to invest in Universal via a special purpose acquisition vehicle (SPAC) hit a snag with regulators and investors. However, Ackman still got a 10% stake via his Pershing Square hedge fund. China’s Tencent owns 20% of Universal.

One winner in the listing will be Vincent Bollore, the French media tycoon who is Vivendi’s controlling shareholder. He will receive Universal shares worth 6 billion euros at Monday’s price.

Bollore has been an aggressive consolidator in France’s media and publishing landscape, and he has a long-held ambition to build up a southern European media powerhouse.

Vivendi itself may suffer in the short run, however, and shares are expected to fall Tuesday as they begin trading without Universal.

BNP Paribas, Natixis, Credit Agricole, Morgan Stanley and Societe Generale are the lead financial advisers on the deal, out of 17 banks in total — an unusually large total.

The fee pot is expected to be below standard listings as no fresh cash is being raised as part of the spin-off.

Universal said in its prospectus that the overall expenses to be paid in relation to the Universal deal would not go beyond 0.5% of the total amount of the share distribution.

The listing is the latest win for Euronext in Amsterdam, which has grown as a financial centre in the wake of Britain’s departure from the European Union. Before Universal, Amsterdam had attracted a record 14 IPOs so far this year, of which 10 were SPACs.

But the only Amsterdam listing of a size comparable to Universal in recent history was the 95 billion euro listing of technology investor Prosus, also a spin-off, in September 2019.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 0.8524 euros)

(Additional reporting by Toby Sterling; Writing by Sarah White; Editing by David Evans and Lisa Shumaker)

Activision Blizzard Under Pressure Ahead of Report

Activation Blizzard Inc. (ATVI) reports Q2 2021 earnings after Tuesday’s closing bell, with analysts expecting a profit of $0.75 per-share on $1.88 billion in revenue. If met, earnings-per-share (EPS) will mark no improvement over identical results in the same quarter last year, when gamers were emerging from lockdowns. The stock bounced off a multi-month low in May after a mixed Q1 report but the uptick failed, with downside since that time reaching the lowest low since December 2020.

Toxic Workplace Allegations

June 2021 video gaming spending rose just 5% year-over-year, failing to overcome tough comparisons after last year’s pandemic sales windfall. Social distancing and the run-up into new console releases by Sony Group Corp. (SONY) and Microsoft Corp. (MSFT) generated the most industry excitement in ages, translating into higher stock prices and extremely overbought technical readings that are partially responsible for year-to-date losses in top sector plays.

Activision is also dealing with fallout from sexual harassment allegations at Blizzard’s “World of Warcraft”, one of the hottest titles of the 21st century. That game no longer tops the sales charts but the toxic culture being exposed by unit employees could damage the corporate brand, which includes many titles directed at female players. California just filed suit, citing a culture of “constant sexual harassment”, so this story is likely to attract attention and potential disgust into 2022.

Wall Street and Technical Outlook

Wall Street consensus remains overly bullish, with a ‘Buy’ rating based upon 24 ‘Buy’, 5 ‘Overweight’, and 3 ‘Hold’ recommendations. Price targets currently range from a low of $100 to a Street-high $145 while the stock is set to open Tuesday’s session more than $18 below the low target. This dismal placement highlights Main Street skepticism after 2020’s 56% return. In addition, analysts have been as quiet as church mice since the scandal broke, most likely because they have no clue how it will impact sales.

Activision topped out at 84.68 in October 2018 and got cut in half in the next four months. A slow but steady uptick reached the prior high in August 2020, yielding a pullback, followed by a December cup and handle breakout that posted an all-time high at 104.53 in February 2021. The subsequent decline completed a descending triangle breakdown after the sexual harassment news, also failing the breakout. None of this bodes well for the stock in coming months.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Netflix Holds Its Own in Midst of Market Sell-Off

It’s hard to spot a winner in today’s session, as the bottom appears to have fallen out from beneath stocks. The Dow Jones Industrial Average is suffering what is shaping up to be its steepest drop of the year so far, and the other major indices are in freefall too.

Netflix, which is a component in both the S&P 500 and the Nasdaq, has been meandering between positive and negative territory. Most recently, it succumbed to the selling pressure but its declines are modest. Investors appear to be confident about the streaming giant’s upcoming earnings, which are planned for tomorrow after the bell.

Potential Gaming Gains

One of the catalysts for Netflix’s stock is a planned push into video games, for which the company has brought a seasoned gaming executive on board. Netflix tapped Mike Verdu, an alum of Electronic Arts and Facebook, to lead its gaming efforts.

ARK analyst Nicholas Grous suggests that Netflix could start its gaming push by “distributing third-party titles” and eventually build its own “in-house titles.” Games could reportedly make their way onto Netflix’s platform in the next 12 months. As Grous points out, the strategy certainly paid off for Netflix and investors with content streaming.

Incidentally, Netflix recently inked a multi-year contract with Sony in which the film giant’s movies will be available on the streaming platform starting next year. Speculation on social media suggests the relationship could potentially spill over into gaming.

Analyst Optimism

Wall Street analysts are expecting good things from Netflix’s second quarter. JPMorgan’s Doug Anmuth remains “positive into earnings” amid the streaming company’s content lineup for the balance of the year. Anmuth has a bullish USD 600 price target on the stock, which is currently hovering at USD 529.

Investors are focused on the number of new subscribers that Netflix managed to add in the quarter. Netflix is up against tough comparisons from the pandemic year when the company saw explosive numbers. Consumers were stuck at home due to the lockdowns and turned to streaming content for entertainment.

The JPMorgan expert is predicting 2 million added subscribers for Q2, which he upped from his former forecast of 1.6 million. He expects the momentum to continue for the final two quarters of the year.

Sony Expects Profit to Slip After Pandemic Boom

That demand has helped Sony continue its shift from consumer electronics to entertainment content and digital subscription services and game downloads, but as more people in key markets such as the United States get vaccinated against the coronavirus those gains could wane.

“We expect software sales in quarter ending June 30 to be below the same period of last fiscal year when lockdowns were widespread,” Chief Financial Officer Hiroki Totoki said during an online news conference.

“We don’t see the significant increase in subscribers for network services like we saw last fiscal year from stay-at-home demand,” he added.

For the business year that started on April 1, Sony forecast profit to fall to 930 billion yen ($8.53 billion), missing the 976.4 billion yen average of 19 analyst estimates, Refinitiv data showed.

Sony benefited from strong demand for its new PlayStation 5 (PS5) games console last business year, which launched in core markets in November and quickly sold out. It wants to use the console to encourage online game downloads and attract subscribers.

Totoki said Sony was aiming to ship more than 14.8 million PS5s this year, double the number sold since its launch, but that a global shortage of semiconductors meant that it couldn’t drastically boost output.

To beef up entertainment content, Sony is pursuing acquisitions and distribution deals. In December, Sony agreed to buy AT&T Inc animation business Crunchyroll, giving it 3 million new subscribers across 200 countries.

This month, Sony said it had reached a deal with Walt Disney Co to offer “Spider-Man” movies and other films on Disney’s streaming service after they are shown on Netflix Inc’s service, which had already agreed a streaming deal.

In the three months through March, Sony posted a profit of 66.5 billion yen – almost double the same period a year earlier. That result compared with a 76.1 billion yen average of five analyst estimates compiled by Refinitiv.

(Reporting by Tim Kelly; Editing by Christopher Cushing and Kim Coghill)