US Business

The hugely popular “Call of Duty” game franchise will become available on Nintendo’s Switch console if the acquisition of its developer goes ahead, a Microsoft executive said Wednesday.

The US tech giant is in the process of buying the game maker Activision Blizzard, but the huge $69-billion purchase has yet to be finalised while it is examined by antitrust authorities.

“Microsoft is committed to helping bring more games to more people — however they choose to play,” Xbox head Phil Spencer tweeted, in what analysts called an attempt to show competition would not be affected by the acquisition deal.

“Call of Duty” is a blazingly successful first-person shooter franchise with hordes of devotees that play it on Microsoft’s Xbox consoles or Sony’s PlayStation.

The games are also available on PC and mobile, as well as Nintendo’s older Wii and DS consoles.

Spencer said Microsoft had “entered into a 10-year commitment to bring Call of Duty to Nintendo following the merger of Microsoft and Activision Blizzard King”.

New titles in the series will also continue to be sold on Steam, a platform for downloading games, as soon as they are released on Xbox “after we have closed the merger”, he added.

Serkan Toto of consulting agency Kantan Games told AFP that the timing of the announcement was “clearly a publicity stunt” linked to ongoing negotiations over the Activision purchase.

Nintendo’s Switch, which was launched in 2017, had more than 110 million users in the past year.

“So if Activision was really interested in bringing ‘Call of Duty’ to a Nintendo platform, to the Nintendo Switch, they could have done it three or four years ago,” Toto said.

Earlier this week, Microsoft president Brad Smith wrote in a Wall Street Journal article that the company had offered to strike a new contract with Sony in a similar 10-year deal. However, Spencer told Bloomberg that Sony has so far rebuffed the offer.

Most stocks suffered more selling Wednesday while oil held losses on growing fears Federal Reserve monetary tightening will tip the US economy into recession.

The drop followed another day deep in the red for New York’s three main indexes after the heads of Wall Street’s leading banks warned of tough times ahead in 2023.

JPMorgan Chase chief Jamie Dimon tipped a “mild to hard recession” and Goldman Sachs’ David Solomon said jobs and pay would be hit, while Morgan Stanley and Bank of America were also uneasy about the outlook.

The comments added to the downbeat mood that has coursed through trading floors at the start of the week, after forecast-beating reports on jobs and the giant US services sector fanned worries the Fed will have to push interest rates higher than hoped.

Markets had been rising healthily ahead of Friday’s employment figures after a weaker-than-expected inflation reading for October suggested the almost year-long tightening campaign was finally affecting prices.

“Any hopes that the Fed would turn more dovish in the months ahead have been dashed significantly as the vast US services industry is where sticky inflation hangs out,” said SPI Asset Management’s Stephen Innes.

He added that the latest readings suggest rates will go above five percent before the Fed stops hiking, while several observers have suggested they will not be reduced until 2024.

Hong Kong, Tokyo, Shanghai, Sydney, Seoul, Singapore, Mumbai, Bangkok, Manila and Jakarta all dropped. London opened slightly higher, Paris was flat and Frankfurt slipped.

And Lauren Goodwin, at New York Life Investments, saw further pain ahead for markets.

“We have not yet seen the bottom on equity prices,” she said, according to Bloomberg News. “While this phase of equity market volatility is likely to end in the next few months, earnings have not yet adapted to a recessionary environment.”

The sombre outlook overshadowed China’s moves to wind back some of its harsh Covid rules that traders hope will kickstart the world’s number two economy, which has been battered this year by months of lockdowns and other containment measures.

In a sign of the impact the zero-Covid strategy has had, data Wednesday showed that imports and exports and imports plunged far more than expected in November.

On Wednesday officials announced for the first time a nationwide loosening of restrictions, including a reduction in mandatory PCR tests and allowing some positive cases to quarantine at home.

But while the country edges back to normality, Zhiwei Zhang, of Pinpoint Asset Management, warned that it would take time.

“The zero-Covid policy has been loosened, but mobility has not recovered much on the national level,” he said. “I expect exports will stay weak in the next few months as China goes through a bumpy reopening process.

“As global demand weakens in 2023, China will have to rely more on domestic demand.”

And other observers said the recent rally fuelled by the reopening may have gone too far and traders were now taking a step back as they contemplate a likely spike in infections in the country.

Oil prices remained stuck at lows not seen for around a year as demand expectations tumble.

Brent on Tuesday sank below $80 for the first time since January, while WTI was at its lowest since December, having plunged from the 14-year highs of around $140 touched in March after Russia invaded Ukraine. Both contracts were only slightly higher in Asian trade.

“The crude demand outlook is getting crushed as we are in a slowdown basically across all the major economies,” said OANDA’s Edward Moya.

“Supplies seem plentiful over the near term and that has everyone hesitating on what was one of the easiest trades of the year.”

– Key figures around 0820 GMT –

Tokyo – Nikkei 225: DOWN 0.7 percent at 27,686.40 (close)

Hong Kong – Hang Seng Index: DOWN 3.2 percent at 18,814.82 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,199.62 (close)

London – FTSE 100: UP 0.5 percent at 7,558.09

Euro/dollar: DOWN at $1.0458 from $1.0470 on Tuesday

Dollar/yen: UP at 137.48 yen from 137.04 yen

Pound/dollar: DOWN at $1.2126 from $1.2133

Euro/pound: DOWN at 86.20 pence from 86.26 pence

West Texas Intermediate: UP 0.2 percent at $74.38 per barrel

Brent North Sea crude: UP 0.3 percent at $79.59 per barrel

New York – Dow: DOWN 1.0 percent at 33,596.34 (close)

China announced Wednesday a nationwide loosening of its hardline Covid restrictions that had hammered the world’s second biggest economy and ignited rare protests against the ruling Communist Party.

The new rules are a major relaxation of President Xi Jinping’s signature zero-Covid policy, three years into the pandemic and long after the rest of the world had largely learnt to live with the virus.

However, with vaccination rates remaining low among China’s elderly and a health system still regarded as ill-prepared for a wave of infections, Xi has not abandoned travel curbs and heavy testing completely.

Under the new guidelines announced by the National Health Commission, the frequency and scope of PCR testing — long a tedious mainstay of life in zero-Covid China — will be reduced.

Lockdowns — a major source of public anger — will also be limited to as small a scope as is feasible, and authorities are required to free areas that show no positive cases after five days.

People with non-severe Covid infections can isolate at home instead of centralised government facilities.

And people will no longer be required to show a green health code on their phone to enter public buildings and spaces, except for “nursing homes, medical institutions, kindergartens, middle and high schools”.

China will also accelerate the vaccination of the elderly, the health commission said, long seen as a major obstacle to the relaxation zero-Covid.

– ‘It’s about time’ –

Until recently, Xi and the Chinese propaganda apparatus had hailed zero-Covid as a triumph of communist rule that had kept deaths low compared with democratic countries such as the United States.

But rare demonstrations against the strategy broke out across China late last month, with people railing against the restrictions.

The protests expanded into calls for more political freedoms, with some even calling for Xi to resign, turning into the most widespread opposition to communist rule since the 1989 democracy uprising that the military crushed.

All the while, a stream of data showed the massive impacts of zero-Covid on China’s economy — with spill on effects for the world.

The government released data just before Wednesday’s announcement stating imports in November had fallen 10.6 percent year-on-year, the biggest drop since May 2020. 

Exports fell 8.7 percent over the same period.

Authorities quickly cracked down on the demonstrations, sending security forces into the streets and deploying its high-tech surveillance system against protesters.

However they also began easing restrictions, with some Chinese cities tentatively rolling back mass testing and curbs on movement.

And once dominated by coverage of the dangers of the virus and scenes of pandemic chaos abroad, China’s state-run media dramatically shifted tone to support a moving away from zero-Covid.

There were immediate signs of relief in China following Wednesday’s announcement.

“It’s about time to open up, its been three years already, we should open up fully,” one Beijing resident who asked to remain anonymous told AFP. 

“People need to work and eat, you can’t just tell people not to leave their homes anymore,” they added.

“If people are worried now, they should stay home and avoid coming out, other people need to work and get on with life.”

Searches on the country’s biggest travel app, Ctrip, for flight tickets ahead of next month’s Chinese New Year hit a three-year-high, state-run media outlet The Paper reported.

Analysts at Japanese firm Nomura said they projected China’s GDP would rebound next year in the wake of the relaxations.

But, they warned, China “does not appear to be well prepared for a massive wave of Covid infections”. 

“It may have to pay for its procrastination on embracing a ‘living with Covid’ approach,” they said in an email.

China announced Wednesday a nationwide loosening of Covid restrictions following protests against the hardline strategy that grew into calls for greater political freedoms.

Anger over China’s zero-Covid policy — which involved mass lockdowns, constant testing and quarantines even for people who are not infected — stoked unrest not seen since the 1989 pro-democracy protests.

Under the new guidelines announced by the National Health Commission, the frequency and scope of PCR testing — long a tedious mainstay of life in zero-Covid China — will be reduced.

Lockdowns will also be scaled down and people with non-severe Covid cases can isolate at home instead of centralised government facilities.

And people will no longer be required to show a green health code on their phone to enter public buildings and spaces, except for “nursing homes, medical institutions, kindergartens, middle and high schools”.

The new rules scrap the forced quarantines for people with no symptoms or with mild cases.

“Asymptomatic infected persons and mild cases who are eligible for home isolation are generally isolated at home, or they can voluntarily choose centralised isolation for treatment,” the new rules read.

“Mass PCR testing only carried out in schools, hospitals, nursing homes and high-risk work units; scope and frequency of PCR testing to be further reduced,” they added. 

“People travelling across provinces do not need to provide a 48h test result and do not need to test upon arrival.”

China will also accelerate the vaccination of the elderly, the NHC said, long seen as a major obstacle to the relaxation of Beijing’s no-tolerance approach to Covid.

Rare demonstrations against the ruling Communist Party’s zero-Covid strategy broke out across China late last month.

They expanded into calls for more political freedoms, with some even calling for President Xi Jinping to resign.

Authorities cracked down on subsequent efforts to protest while easing a number of restrictions, with some Chinese cities tentatively rolling back mass testing and curbs on movement.

The capital Beijing, where many businesses have fully reopened, said this week that commuters were no longer required to show a negative virus test taken within 48 hours to use public transport.

Financial hub Shanghai — which underwent a brutal two-month lockdown this year — announced the same rules, with residents able to enter outdoor venues such as parks and tourist attractions without a recent test.

And once dominated by doom and gloom coverage of the dangers of the virus and scenes of pandemic chaos abroad, China’s tightly controlled media dramatically shifted tone to support a tentative moving away from zero-Covid.

The prevalent Omicron strain is “not at all like last year’s Delta variant”, Guangzhou-based medicine professor Chong Yutian said in an article published by the Communist Party-run China Youth Daily.

“After infection with the Omicron variant, the vast majority will have no or light symptoms, and very few will go on to have severe symptoms, this is already widely known,” he assured readers.

But analysts at Japanese firm Nomura on Monday calculated that 53 cities — home to nearly a third of China’s population — still had some restrictions in place.

Wednesday’s announcement came hours after the government released further data showing the crippling economic impacts of zero-Covid.

Imports and exports plunged in November to levels not seen since early 2020.

Imports in November fell 10.6 percent year-on-year, the biggest drop since May 2020, according to the General Administration of Customs. Exports fell 8.7 percent over the same period.

US e-cigarette manufacturer Juul Labs said on Tuesday it had reached a settlement with about 10,000 plaintiffs in California after the company was accused of marketing its products to teenagers.

The vaping giant did not disclose the amount of the settlements, which it said were related to more than 5,000 cases, but said the agreements “represent a major step toward strengthening Juul Labs’ operations and securing the company’s path forward.”

The complaints had been filed for personal injury, with some in consumer class action lawsuits, and others filed by government entities or Native American tribes.

Juul is battling to stay afloat after the US Food and Drug Administration found the company had failed to address safety concerns and ordered all its products off the market in the United States.

The company has appealed the decision but announced last month it had been forced to lay off around 400 employees and cut its operating budget by up to 40 percent.

Juul said in November it had secured financing from early investors to maintain its operations.

Europe is likely to scrape through this winter without cutting off gas customers despite reduced Russian supplies, but even adjusting to colder homes and paying more may not be enough in coming years, analysts say.

“I like a hot house, I have to admit… I really used a lot of gas,” said Sofie de Rous, who until this year kept her home on the Belgian coast at a toasty 21 degrees Celsius (70F).

But like millions of other Europeans, the 41-year-old employee at an architectural firm has had to turn down the thermostat after energy prices surged following Russia’s invasion of Ukraine in February.

Russia’s progressive reduction of gas supplies to Europe via pipeline triggered a bidding war for liquefied natural gas (LNG), sending prices sharply higher.

If certain countries like France and Spain froze prices for consumers, others like Belgium let suppliers more or less pass along the higher costs.

“I was a little panicked in the beginning,” said de Rous, who saw the gas bill to heat her 90-square-metre (970-square-foot) house in Oostduinkerke jump from 120 euros ($126) per month to 330 euros.

She has lowered her thermostat to 18 degrees and is looking into installing double-pane windows and a solar panel.

Like de Rous, the lack of concern about energy consumption of a whole generation of Europeans ended abruptly in 2022, and everyone is mindful of where their thermostat is set.

If previously natural gas was cheap and plentiful, it is now scarce and expensive.

The European wholesale reference price used to fluctuate little, hovering around 20 euros per megawatt hour. This year, it shot as high as 300 euros before dropping back to around 100 euros.

“It’s the most chaotic time I’ve witnessed in all of those years,” Graham Freedman, a European gas analyst at energy consultancy Wood Mackenzie, told AFP.

– Big drops in consumption –

Sky-high energy prices have caused numerous factories, particularly in Germany’s chemicals sector which was highly dependent upon cheap Russian gas, to halt operations.

But European nations were able to fill their gas reservoirs and no one has been cut off yet.

“Until February, the very idea of Europe without Russian energy was seen as impossible,” said Simone Tagliapietra, a senior fellow at the Bruegel think tank in Brussels.

“What was impossible became possible.”

A warm autumn that allowed many consumers to put off turning on their heating also helped put Europe in better position for the winter.

Overall, the reduction in EU gas consumption by consumers and industry was around 25 percent in October compared to the 2019-2021 average for the month, according to calculations by Bruegel.

In Germany, where half the households use gas for heat, data shows consumption down by 20 to 35 percent depending on the week.

“That’s much more than anyone expected,” said Lion Hirth, a professor of energy policy at the Hertie School in Berlin.

“And that’s completely contradictory to the talk that we’ve been hearing from doomsday talkers saying, people just don’t respond. People just keep heating. People don’t change their behaviour. People don’t respond to prices.”

In the space of several months Russia has lost its top gas customer, Europe, with purchases passing from 191 billion cubic metres in 2019 to 90 billion this year. 

Wood Mackenzie forecasts deliveries will fall to 38 billion cubic metres next year.

The EU has been able to import large quantities of LNG, but only by outbidding South Asian nations like Pakistan and India.

This has pushed these nations to increase their dependence on coal — negatively impacting global efforts to curb climate change.

– In 2023? –

Europe’s ability to import LNG has been limited by a lack of infrastructure. 

While France and Spain each had several terminals to unload LNG from tankers and convert it back into gas at the start of the Ukraine conflict, Germany didn’t have one.

And while construction of more LNG terminals is under way, in 2023, unlike at the beginning of this year, Europe will mostly have to do without Russian gas to fill its reservoirs.

This could set up an even fiercer bidding war between European and Asian nations for supplies.

“The key factor is most certainly going to be: what is the weather going to be like this winter,” said Laura Page, a gas analyst at commodity data firm Kpler.

“If we have a cold winter in Asia, and we have a cold winter in Europe… this fight will intensify.”

The problem is that LNG supplies are limited.

“There isn’t enough gas in the world at the moment to actually cope with that loss of supply from Russia,” said Wood Mackenzie’s Freedman.

New LNG projects to boost supply won’t be able to come on line before 2025, meaning Europeans will have to get used to living with homes heated to just 18 degrees.

China’s imports and exports plunged in November to levels not seen since early 2020, as strict Covid restrictions hit the economy hard, according to official figures released Wednesday. 

Beijing’s strict zero-Covid policy of snap lockdowns, travel curbs and daily mass testing has left businesses reeling, disrupted supply chains and dampened consumption. 

November imports fell 10.6 percent year-on-year, the biggest collapse since May 2020. 

Exports fell by 8.7 percent year-on-year, the biggest drop since February 2020, when the country was mired in the early stages of the pandemic. 

The threat of recession in the United States and Europe, coupled with soaring energy prices, is weakening demand for Chinese products. 

After nationwide anti-lockdown protests last week, the government has signalled a shift in messaging and local authorities have begun easing some restrictions — which may brighten the outlook in the coming months.   

But travel between provinces remains complicated and an economic recovery may take time, with health measures highly variable across the country. 

China’s factory activity shrank for a second straight month in November, official data last week showed, as large swathes of the country were hit by lockdowns and transport disruptions.

The Purchasing Managers’ Index — a key gauge of manufacturing in the world’s second-biggest economy — came in at 48.0, down from October’s 49.2 and well below the 50-point mark separating growth from contraction, according to the National Bureau of Statistics.

Chinese leaders have set an annual economic growth target of about 5.5 percent, but many observers think the country will struggle to hit it, despite announcing a better-than-expected 3.9 percent expansion in the third quarter.