Tag Archives: the Wall Street Journal

When drought sets in

That is the moment that is feared, it happens all over the world. The drought in Australia had been close to legendary, and then there is New Mexico, Texas, small parts in Oklahoma, as well as Missouri. Europe is also facing issues of drought with crop failures and loads of farmers now facing bankruptcy. Countries like Spain, Greece, even parts of Southern Sweden now having more than just a dry spell. After a summer of record wildfires that burned roughly 250,000 hectares of forest, we see that the Swedes are slamming down on the change of lifestyle that has squarely hit them in this green jewel called Sweden, they record the worst drought in 74 years.

Drought is a way of life in some cases and depending on the situation you bank, drought becomes a game changer. So when we are introduced to ‘Hezbollah turns to charity amid economic woes‘, we see that it is not merely a dry spell. We are faced with the quote “Iranian excess wealth, which has funded the group with hundreds of millions of dollars a year, appears now to be drying up“, it is in line with “Hezbollah officials have been scrambling to put a lid on the aforementioned “crisis” as its coffers have been depleted in the wake of its large outlays on fighting in Syria and from the increasing squeeze of U.S sanctions on its patron Iran“. Yes there we have it, when we see ‘its patron Iran‘, we see the setting of Hezbollah, the ‘bitch’ of Iran, a tool to be used and discarded when the situation requires and it seems that Hezbollah is a tool that can no longer be afforded and now we see “resorted to the more traditional means of fundraising through its Islamic Resistance Support Organization and Imdad Committee for Islamic Charity“. It seems that those opposing Hezbollah and Iran are making gains in this path, as Hezbollah is now in an economic crises, they might consider that for every missile fired on Saudi Arabia, a thousand people need to abandon a week of food for a thousand persons. Consider that 165 missiles have been fired, where does that leave Hezbollah? OK, that was a wrongful setting, because the missiles are seemingly coming from Iran. We see more and more evidence that this is the case, yet how exactly has remained in the shadows of speculation for now. The biggest issue is not the fact that they rely on charity, it is “Nasrallah seems to understand the severity of the problem, telling members of the group’s Education Unit, which provides scholarships and operates schools, that the crisis would “endure as long as U.S President Donald Trump is in office,” sources told Annahar“. I would think that their involvement in Yemen, being one of the main causes of the absence of humanitarian aid would be a much bigger issue. In this, the National gives us “Saudi Arabia’s ambassador in Washington has set out evidence of Hezbollah’s deep involvement in the war in Yemen, including footage of commanders directing training for Houthi rebels“. In this, I personally do not think that the fact that they are a mere Iranian tool matters, their involvement is a key part in the extensive hardship on the Yemeni citizens. That part is shown in several sources giving us: “Because terrorists use human shields to protect themselves or cause civilian casualties “without facing consequences,” it is imperative that “terrorists and their sponsoring regimes must be held accountable for their brutal practice of using civilians as human shields,” argued two experts in an op-ed published Wednesday in The Wall Street Journal“. In this Hamas and Hezbollah seem to take the same approach. When we are introduced to the Hamas side with: “they exploited “the bodies of our women and children,” in the words of Hamas chief Yahya Sinwar, to protect its fighters as they attempted to infiltrate Israel. Though Salah Bawdawil, another official of the terrorist group. later admitted that most of those killed by Israel were indeed members of Hamas, Dubowitz and Kittrie observed, “the television images had already done the intended damage to Israel’s reputation.”“, so tell me, what happens when the drought of human shields sets in and the lack of children cadavers becomes overly visible? What remains at that point?

This is the setting and whilst Hezbollah is seeing its drought into new requirements for other tactics, we must ask ourselves, why was the entire Iranian-Hezbollah link allowed to continue in the first place. You see, when we are ‘treated’ to “the television images had already done the intended damage to Israel’s reputation“, we are not told that the media will not correct for the exclamatory statements that they make, they will not correct for the howling negligence or incompetence towards the true setting, because the emotional feed is too useful, as they merely focus on the needs of the shareholders, the stake holders and the advertisers.

That jump makes sense in a moment. As we were given (from various sources) “Over 1.4 million people have fled their homes in Yemen and are now struggling to find food and water. There are additional food shortages because farmers are unable to pump water to their fields“. In all this, with all the shortages we see that the Yemeni’s have to make very different decisions. When we see this pristine child, clean clothed, looking not hungry or thirsty, whilst in opposition we see levels of severe malnutrition, we need to reconsider what drought actually means.

You see the dictionary gives us “a prolonged period of abnormally low rainfall, leading to a shortage of water“, yet it also gives us, the version we forget about. With: “a prolonged absence of something specified“. That is the version we need to focus on. As I stated it a few days ago, we might see the setting of those clean kids, new clothes, shiny rifles and a cameraman, but in that setting, in a prolonged absence, we see that they are the most vulnerable, the easiest form of extremism, kill and you do not go hungry (for a while at least).

It is a setting that Hezbollah has used over time again and again. I will say that there is no evidence that this is a specific Hezbollah setting. They might be on the sidelines using whatever tools handed to them and these kids, optionally for the first time in years with new clothes, a proper feed, we see the setting that radicalisation is getting too easy for the players and that is also why Humanitarian help is essential. When we dig deeper, we see the amount of sources, photographs and videos pile up, a proxy war that seemingly has children on both sides, where will it end?

So as we get back to Hezbollah and its patron needs; when we consider: “the party has attempted to implement de facto austerity measures, cutting certain social programs it provides to large segments of Lebanon’s Shiite community yet preserving the payments to the families of dead and injured fighters“. When the issue becomes ‘payments to the families of dead and injured fighters‘, it is their choice, yet in a stage of a drought of basic needs as we see that “its donations have maintained funding to around 40 percent of its needs“. Perhaps setting different priorities like for example, stop being the tool for Iran is a first step in all this. Especially when we see that the funds are drying up. the idea of Iran having to step in and actually do the fighting themselves is a first step to recognising that Iran is no longer in a proxy war, but in an actual war theatre where they are clearly seen as the warring party that they are. I wonder how many European nations would be willing to continue the setting of “The European Commission unveiled Thursday a first tranche of 18 million euros ($21 million) — 8 million for the private sector, 8 million to cope with environmental problems and 2 million for drug abuse“, in some misguided Iran aid deal whilst we see that the involvement of Iran in Yemen is basically part of the children dying through proxy wars and barred humanitarian aid, as this benefits Iran to a much larger degree. So whilst we have seen all kinds of attachments to laws, Is there any clear attachment to the ‘50-million-euro effort to help Iran cope with economic and social challenges‘, with the setting that its involvement in Yemen, once proven will slice funding by 90%, or were the big business people of Europe unable to concede to the idea that there should be some level of morale in all this? This setting is important, because if the Iranian funds are going dry, it equally means that Iran is out of options and in that light we need to consider that Europe had more options to get a much stronger humanitarian based agreement, yet these steps are not done, is that not equally strange?

In all this, whilst the clear diminishing funds are shown, we are also treated (two weeks ago) to the ‘Hezbollah’s Ababil drone on display in Mleeta‘, as well as the misdirection of “the Pentagon estimates that each UAV can cost as little as $200 and will be used by Hezbollah in other combat fields“, It is my personal view that this is clear misdirection as the systems contain at least $300 in metal and $500 in optical parts, the electronic are close to another $1500. So someone at the Pentagon seems to be buttering someone’s sandwich in all this.

Yet the story is clear, it seems that Hezbollah is another player where hunger is inferior towards its hatred of Israel and its facilitating displeasure of Saudi Arabia through Iran, and we must recognise that in all this the US is equally guilty to some degree. Instead of the statement from John Bolton: ‘Hezbollah forces in Syria must go back to Lebanon‘, he should have clearly stated: ‘Hezbollah forces in Syria and Yemen must go back to Lebanon‘. It would have been a first step is setting the stage that Iran would be left with less and less options, by not addressing this we are faced with a Hezbollah who is now eagerly awaiting charity funding to prolong the Yemeni situation (among other options), a situation that needs to get cut short and right quick.

In the end, when the drought does set in and you are still all about a continuing war that was not about you in the first place, at that time when you rely on charity and donations, merely to pay the ammunition and drone bill, isn’t it time that a harsh look at ones priorities becomes more and more essential?

#59HoursUntilMondayMorning

 

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Drop the Mike, Ashley!

Welcome to the issues on a man that I do not know. This is not the most straight-forward of starts, yet the man who has been valued more than once and that verdict is several thousand stacks of £1,000,000. The man who owns Newcastle United, which means he gets the swanky seat in the stadium. Now, we can understand that this man founded Sports Direct. When you get enthusiastic about sports, you can bet that it will be part of your life. There is no denying it and as it became a good success, I would state ‘good for him’. Yet, the focus on him started in an entirely different way. It started with him getting in on the videogame action by getting a near 26% stake in the franchise ‘Game‘. That brand did not go well here in Australia, yet I always found it to be a decent store and the people working there knew their games and consoles. I have seen them in the UK as well and a similar feeling remained on that experience. Here it did not go well as they were up against EB Games (who grew aggressively at that time) and JB Hifi that was an established chain of quality stores, so they had a murder competition, they did not make it (for the most). Yet all this is now in play when I read “Mike Ashley swoops on video games retailer after profit warning forced by shortage of Nintendo Switch consoles“, this is a weird issue. We get ‘profit warning‘ in regards to a situation of shortage. Basically the story becomes, we are short on revenue/profit because we can’t get any more consoles, they are sold out, and everyone wants one! Which at present is pretty much the truth of the desire of people and their need for the Nintendo Switch, it is actually THAT amazing.

The result was “Game shares rose by more than 15% to 28p on the news, and later traded at 26.5p (up 9.3%), giving it a market value of £47m“, apart from the 28p not sounding like that impressive, it is the end result of +9.3% that is staggering. You see, I have issues with the entire part where ‘profit warnings‘ are labelled in the way they were. You see, the entire mess (as reported) gives no clue on the actual situation (well, the one as I personally see it), I do not care how people quantify one way or the other; it is the addressing of profit warnings.

I offer in evidence the following pieces

Part 1, Sony (at http://www.playstationlifestyle.net/2017/01/03/uk-2016-sales-chart-2016-game-sales-down-13-infinite-warfare-the-2-best-selling-game-of-the-year/) gives us ‘UK Sales Chart: 2016 Game Sales Down 13%, Infinite Warfare the #2 Best-Selling Game of the Year‘. In this we see: “The major titles of 2016 also disappointed when compared to 2015’s, with Call of Duty: Infinite Warfare (the second biggest title of 2016) lagging 31.5% behind Call of Duty: Black Ops 3. In other comparisons, Watch Dogs 2 fell just short of the 500,000 copies Assassin’s Creed Syndicate sold in 2015, Steep performed worse than Rainbow Six Siege, Gears of War 4 couldn’t reach the heights of Halo 5, and Final Fantasy XV was outsold by Just Cause 3.” For those who do not talk games, let me boil it down to the first item is that overall less games were bought. In my personal view, the overall quality of games was not great. Even as Watchdogs 2 was a good step up from the previous game, yet many gamers felt too burned by the first game. I believe that the second game was good, it has online and offline options and people were not forced to go online here. Regarding the other title, I am not a fan of Call of Duty, I know many are. the fact that a game like that became ‘the’ game is not entirely on the fact on how good their Infinite Warfare was, it is more that the other games were way below the line. The fact that the last four larger releases this year alone could be bought for 50% down, including the special editions with figurines is also a changing trend. People are less willing to just shell out the cash for games, reviews are more competitive and even though there are really good reviewers, there are a lot more really bad reviewers and they tend to get plenty of exposure. Yet in the end, the games were for a larger extent not up to snuff. The reviewers ‘deserve’ extra attention as some are more and more about the larger players, whilst some of the true gems have been largely ignored by plenty of people. Nioh is perhaps one of the most visible ones. Like Infinite warfare it is a specific game. I actually like this game, but I loathe the challenge it contains at times (they are really hard games). Some saw that is was some Dark Souls games and plenty of people ran for the hills as this is a game for actual gamers, not for wannabe’s. In my view there are several similarities, yet the only thing that the game Nioh truly has in common with Dark Souls III was its graphical excellence.

So here we see two elements that would push any revenue down.

Part 2, Pushsquare. At http://www.pushsquare.com/news/2017/01/ps4_physical_game_sales_increase_as_uk_industry_suffers_blow, we see more confirmation: “Overall sales down 13.4 per cent“, the mere subtitle and the direct impact that matters, less sales overall, this is not entirely correct, but I will get to that in a moment. The next quote is, as I personally see it wrong, but still essential. With “Bethesda’s Dishonored 2, for example, couldn’t come close to matching the success of Fallout 4, while Square Enix’s Final Fantasy XV somehow failed to outsell Just Cause 3.” My issue is that no matter how you slice it, Dishonored 2 is a little bit of a niche game, more intent for those who love stealth gaming (me being one), it is graphically superb, the game is a little steampunk in a very good way, but for the most, it is highly original and exquisite in quality. It is not fair to compare it to a game that has millions of followers and has been revered since its original release (Xbox 360, PlayStation 3 and PC) on 11/11/11, the date that some will carry with them for all time. An established success that was bought on the console be new players as well as nearly everyone who had the previous version. The game is good for months of gameplay, so a game that sells itself due to 5 years of raving reports. The second is equally unfair. I myself was never a FF fan, but I have always admired the originality and scope of the stories and the near perfection each game brought. Even I am surprised that Just Cause 3 outsold it, perhaps merely because of the over the top explosions and things you can do with the game? I cannot tell what the exact reason is, yet the second part implies that the gamers are diversifying in different directions, changing the gaming requirement. It is almost like there is a new generation taking over the baton of gaming and it has different tastes.

Yet he best is left for last, in part 3 we see Retail Week

The mention (at https://www.retail-week.com/sectors/entertainment/game-issues-profit-warning-as-uk-sales-falter/7022184.article), where we see “The specialist retailer, which posted a slump in its interim profits in March, said anticipated supply in the UK of the latest Nintendo console had failed to meet expectations, negatively impacting overall sales“, is a first issue. In this the mention ‘anticipated supply‘ beckons the question, so did you order enough or not? As the experts, you should have seen the impact it would make. The E3 and other events clearly showed that Nintendo was blowing both others out of the water. In addition we see “alongside ongoing poor sales of Xbox and PlayStation devices“, now we can argue about Xbox for several reasons, so let’s take this out of the equation, the PlayStation part gives the issue. Overall sales of the PS4 and PS4pro are still up by a decent amount, so it now becomes a shifting focus, but I will get to that soon.

For now I will end with the quote “The group continues to actively implement its UK action plan, encompassing improved supplier arrangements, enhancements to the customer experience, further operational progress including cost reduction programmes and disciplined cash management“, yet will not address it yet. Let’s take a look at three more elements.

The first is from the Business Insider which gives us “Sony sold 10 million PlayStation 4 consoles between early May 2016 and December 6, 2016. That puts sales in the neighbourhood of over 1 million sold every month, which keeps it locked in as the fastest-selling PlayStation console of all-time

The second is again from PlayStation Lifestyle with “Taking a deeper look at software last year in the UK, Games Industry points out that nearly 80% of all boxed games sold last year were either on PS4 or Xbox One (up from 66% in 2015)

The last is G24/7 where we see (at https://www.vg247.com/2016/11/14/ps4-console-sales-have-tripled-in-the-uk-following-the-launch-of-the-ps4-pro/) “Sony’s PS4 Pro launched at the end of last week and has had quite the impact on PS4 console sales. According to MCVUK, PS4 sales for the week ending Saturday, November 12, were up 204%. 65% of the total PS4 sales last week were for the PS4 Pro, while the final sales figure for all PS4 consoles was 44% higher than those for the Xbox One.

Now we put the whole together!

We know that sales were massive end of year 2016, especially with a new console and Christmas coming up, all that makes sense. We can also clearly see that overall, the consoles represent the bulk of all game sales. This partially makes sense because that is what we see as flagships in pretty much any gaming store, PC owners have a lot more options to buy in other places and at times a lot cheaper and there is Steam to consider, so that part remains an unknown and as such a much lesser impact to these stores (apart from the selling of steam credit). The fact that the PS4 is surpassing the previous consoles, is debatable (PS2 sold over three times the amount in its life time), yet the overall market trend is that games should be on par and were up by a fair bit last year. So when we go back to the initial start with “Video game retailers have been particularly badly affected by the broader shift away from the high street in recent years, with developers moving to increase their own profit margins selling games as direct downloads“, which we get from the Financial Times (at https://www.ft.com/content/172c3ba1-e880-35e8-9273-957e325cd7f4?mhq5j=e3).

In this there is debate, yet he part no one touches on is how the expectations were set, what they were weighed on and on the given image that sales were down, which had been an upcoming known for close to 2 quarters of a year. The part that the Financial Times gives us is that direct downloads are playing more of a role nowadays. It actually impacts the industry in 2 ways. Apart from buying directly, the additional issue is that consoles have a premium service; most gamers take that because of online gaming and the fact that both systems offer at least 2 free games a month. Microsoft was initially really bad with that (lousy games or games everyone had), they are still not great, yet this month it includes Lego pirates of the Caribbean, which is actually a nice and decent game (and not a large download in console terms). Sony beats Microsoft here hands down with titles like Until Dawn and Life is Strange. In all this both offer decent free games, with a bonus for Sony people as their account will also enable them to get free games for their Vita handheld, all that for around £50 per year, the premium service sells itself to both consoles without any difficulty. All elements that shows the impact of a bad year of games, not consoles, the overall quality of games gives rise to people deciding to just download an average game instead. The interesting part that even as Ubisoft lagged in a few ways, the one game what was awesome in many ways, ‘For Honor’ actually did not do that well, which is a mixed signal that multiplayer games are wanted, yet without a strong one player side, it tends to not make the cut in a top 10, which would be unfairly devastating on the makers I think. All elements that the analysts in this case should have known and realised and as such, when we see ‘would not meet expectations‘, my question becomes: “the expectations of whom and on what foundations?” Now we get to the part I skipped.

With “The group continues to actively implement its UK action plan, encompassing improved supplier arrangements, enhancements to the customer experience, further operational progress including cost reduction programmes and disciplined cash management” I wonder what we are being served.

  • Did they call short because they did not keep an eye on running costs, what arrangements would be needed with suppliers? Were they not up to scrap?
  • Even more customer experience? Were the current settings and anticipations of the competitor not up to scrap?
  • Disciplined cash management? Is cash not managed correctly?

The feedback we got from Game, directly below the image of a sort of smiley ‘Game CEO Martyn Gibbs on the merits of in-store gaming arenas‘ is one that leaves us with the thoughts that Game is going down because they are not on the ball of the game, and the game is passing them by? So in all this Mike Ashley merely flying in to pick up a bargain? In this he better realise fast that Game has an issue and more than one potential issue in play, he also needs to realise that the Games market is a shifty one and in the years before the publishers see clear to push a bigger load to online sales in the next 5 years (depending on where you live), we better consider that top games is a market in motion and it is likely to see a shift that Microsoft and Adobe made some time ago on PC’s, it is not a change that gamers are currently happy with, but it is one that the next generations of consoles will likely face, the game shop is seen as the middle man and they are trying to cut it out to maximise it for their own need to please whatever stakeholders they report on. It is early days now, but in 5 years it won’t be.

In the aftermath we actually need to look where I normally do not go. It is the Telegraph, in this case the business section, where (at http://www.telegraph.co.uk/business/2017/06/30/game-warns-profits-will-substantially-expectations/) we see the generic parts like “following its third profit warning“, we know that Christmas was weak (to some extent), yet in equality when you consider the previous information, the issue is not entirely just ‘weak Christmas‘, it is merely a much stronger competition to some extent and the fact that the cost of living in metropolitan UK seems to be ignored by analysts and those who speculate on how it would (read: should) be. The issue that is stronger is “The shares nosedived to just 21p on the back of the profit warning, valuing the business at £35.6m only two years after it was floated at 200p a share by US hedge fund Elliott Advisors” as well as “Elliott cashed in £101m at the time of Game’s stock market listing by selling a stake and made a further £59m by dumping a further 10pc of its stake just three months afterwards, despite agreeing to a lock-up period of six months” which now also implies that Game got played and not in such a nice way. Yet the bulk of all the sources do not give any clarity of the part that Elliott Advisors was playing, even the Financial Times steered clear of that part. In this, I am now also questioning the setting as given to Game and its senior management. Even as CNBC is giving the notion that Paul Singer, CEO of Elliott Management is just the best invention since Frozen Yoghurt (if we are to believe places like Forbes, CNBC and the Wall Street Journal), I wonder what price we can see the UK pay for getting played to the extent it is getting by the US Hedge market, in that regard should we allow for any US company coming in under false pretences and flood the market so that they can drain the profit quickly and walk away? It seems to me that they tried that in the Netherlands with Akzo Nobel, which had the great benefit of Elliott Management failing (for now), but it shows the extent that as a shareholder Elliott Management will go to get their profit, it seems to me that Game was not nearly as lucky and the fact that the different levels of publications left that side seemingly in the dark corners of ‘them not printing that part‘ is also upsetting (to me even more upsetting is the part that the Telegraph actually did get that info out). The fact that Game has been seemingly under exploitative attack does not diminish the issues as given by some of the publishers by the quotes, Game got caught out, which under the current size and the possible level of possible losses is a dangerous place to be in.

In all this, I am aware of things, but not as much as a person like Mike Ashley would be, so is this his triumph with Game, should we see this as a mere quick victory to see if he can get more out of this than Paul Singer’s place did, or is it an actual rescue and grow attempt? I am not implying one or the other, but as you see the presented evidence, there are a few issues with Game and I believe as such they were set up as the weak runt in the market, whether this will happen twice in a row is something I have no way of telling and I am not implying anything wrong, immoral or illegal. The entire mess is not completely shown by some players and that is what seems to be the actual issue. I remain in an attempt to be protective of the places that feed my need for gaming and there is a positive in having a diverse and competitive market. It guarantees to some degree I get the best games at the sharpest price, which is what every gamer wants, there is no exceptions to that rule.

 

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