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the Dow Jones Industrial Average (DJ INDEXES: ^ DJI) it fell 2.9% at 12:15 pm EDT on Monday. The possibility of renewed restrictions due to a second wave of COVID-19 and the lack of action by Congress on new stimulus measures could be contributing to the market downturn.
Microsoft (NASDAQ: MSFT) Shares fell on Monday despite the tech giant announcing a billion-dollar game acquisition ahead of the launch of its new game consoles. Meanwhile, shares of Walmart (New York Stock Exchange: WMT) managed to rise as investors bet the retailer would continue to perform well in an uncertain economic environment.
Image source: Microsoft.
Microsoft acquires Bethesda Softworks
As the launch of Microsoft’s new Xbox game consoles nears, the company is shelling out billions to strengthen its gaming ecosystem. Microsoft announced Monday that it had agreed to acquire ZeniMax Media, the parent company of Bethesda Softworks and other gaming studios, for $ 7.5 billion in cash.
Bethesda is primarily known for its Fall out and Ancient scrolls game series. As part of Microsoft, future Bethesda games will be available on launch day for Xbox Game Pass subscribers. Game Pass is Microsoft’s subscription gaming service, providing access to more than 100 games on Xbox and PC, as well as cloud games on Android devices.
“This is an amazing time to be an Xbox fan. In the last 10 days alone, we’ve released details on our two new consoles that will be pre-ordered tomorrow, we released cloud games on Xbox Game Pass Ultimate, and now ‘We’re making another investment in the most critical part of our strategy: games, “Microsoft games director Phil Spencer said in a statement.
The deal is expected to close in the second half of Microsoft’s 2021 fiscal year. It is unclear if future Bethesda games will be available on non-Microsoft platforms like SonyPlayStation. Microsoft’s current generation Xbox One console outsold Sony’s PlayStation 4. This time, exclusive games and an attractive subscription service help Microsoft’s upcoming Xbox Series X and Series S consoles.
The Bethesda news didn’t stop Microsoft shares from slipping on a tough day for markets. Microsoft shares fell around 0.6% in the early afternoon.
Walmart bucks the trend
As the major stock indices sold strongly on Monday, Walmart was the top performer on the Dow. While the lack of additional economic stimulus will put pressure on the retailer’s growth, there are some reasons to believe that Walmart will do well if a second wave of COVID-19 hits the US later this year.
Walmart’s e-commerce business has exploded during the pandemic, facilitated by the company’s investments to develop its online capabilities over the past few years. While Walmart is still far behind Amazon In e-commerce, the retailer increased its US e-commerce sales by a whopping 97% in the second quarter.
Eating online has been and will continue to be an important part of Walmart’s e-commerce success. Grocery pickup was popular even before the pandemic, and the company’s new Walmart + membership program offers free same-day grocery delivery and select general merchandise. If stay-at-home orders are re-implemented due to the resurgence of COVID-19, Walmart is uniquely positioned to increase its share of the grocery market.
Shares of Walmart were up about 0.4% in early Monday afternoon. The stock has gained about 14% so far this year.
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