Hey Snackers,
So long, airport iPad menu: concessions company OTG Management is pulling 21K Apple tablets from North American terminal restaurants. Now you can get that overpriced sandwich delivered gate-side by ordering through your phone.Â
Stocks sagged yesterday after more disappointing economic data from China (the recovery is not recovering). The world’s second-largest economy said it would stop reporting its youth-unemployment rate after months of worsening.
“FarmVille” maker Zynga announces a flashy web3 game even as play-to-earn sputters
It’s all fun and games… until games are your biz. Social-gaming icon Zynga dove headfirst into the web3 pool this week, announcing that it’ll release a blockchain-based game (dubbed “Sugartown”) this year. The mobile-game maker, best known for web 2.0 hits “FarmVille” and “Words With Friends,” was purchased by “Grand Theft Auto” owner Take-Two Interactive last year for $12.7B. With “Sugartown,” it’s stepping into crypto’s contentious play-to-earn model.
Grinding: Play-to-earn games let players collect digital assets that can typically be sold on blockchains like ethereum.
Press play: To access “Sugartown,” players would get ethereum NFTs (dubbed “Oras” in the game), which they can stake to earn in-game currency (but apparently not crypto).
Not earning fans… In the not-so-distant past, play-to-earn’s future seemed bright. In 2021 Sky Mavis, the Vietnamese company behind play-to-earn poster child “Axie Infinity,” was valued at $3B. The game had 2.7M daily users at its peak, and last year its NFT series passed $4B in sales. Meanwhile, blockchain-integrated games like “Stepn” and crypto VCs like Reddit cofounder Alexis Ohanian teased a world where players would be compensated for their time. But enthusiasm for play-to-earn sagged as in-game economies collapsed.
“Play” may beat “earn”… Many play-to-earn games were panned as boring, feeling more like a job than a pastime (in some cases, people actually made them a job). But Zynga is known for churning out colorful, addictive games that people flock to for free. Its foray into web3 could be a power-up for the crypto-gaming industry. But “Sugartown” could also meet resistance if people stay soured on play-to-earn.
Russia, China, and Argentina struggle as the value of their currencies slides
Currencies currently… The Russian ruble, Chinese yuan, and Argentine peso all slid in value this week. The ruble dropped to its lowest level since Russia’s invasion of Ukraine as President Putin’s country is increasingly cut off from the global economy. China’s yuan neared the record low it set in October as its economy struggles to bounce back from zero-Covid policies. Meanwhile, the Argentine gov’t intentionally knocked down its peso’s value by ~18% to get ahead of its downward spiral.
Depreciating: A weakening currency means paychecks don’t stretch as far while necessities can cost more, resulting in a vicious “make less, spend more” cycle. In Argentina, where inflation’s been 100%+, 4 in 10 people live in poverty.
Hiking: The central banks of Russia and Argentina raised interest rates this week to try to prevent their currencies from sliding further relative to the dollar.Â
Driving the slide… The balance of trade is tipping (in a bad way) for China and Russia, weakening their currencies on the world’s stage. Before the war in Ukraine, 74 Russian rubles would get you $1. Now you’d need ~100 rubles. Companies aren’t ordering as many goods from Russia and China as Western governments ramp up economic sanctions. Russians have historically bought dollars and euros to protect their savings from the ruble’s volatility, and they’ve been adding yuan this year as Russia’s relations with * gestures almost everywhere * sour.
Once trust is lost, it’s hard to get back… Just look at Argentina, where for decades the gov’t has been fighting a fall in the peso’s value. Argentines swap their pesos for USD at illegal hubs and quickly spend any pesos on hand before they lose value — further devaluing the currency. Argentines have lost so much confidence in the peso that a far-right candidate who wants to make USD the country’s main currency recently won the biggest share of primary-election votes.
What else we’re Snackin’
Uncord: For the first time, cable and broadcast TV makes up less than half of US viewing hours. As cord-cutting intensifies, streamers like Netflix and Disney are chasing profit, hiking prices ~25% in the past year.Â
Buckled: California greenlighted robotaxi companies Waymo and GM’s Cruise to run 24/7 driverless rides in San Francisco. The following day, 10 Cruise cars stalled because of wireless issues, causing a traffic jam.Â
FixDown: Home Depot’s quarterly sales fell 2% as Americans paused DIY projects. Now it’s forecasting an annual sales decline for the first time since 2009. Home improvement has slowed since the lockdown boom.Â
Imagine: Florida Republican Gov. Ron DeSantis said he’s “basically moved on” from a feud with Disney over its special tax status. He said he wants CEO Bob Iger to drop Disney’s lawsuit against the state.
Frenzy: Saudi Arabia and the UAE have bought thousands of Nvidia’s next-gen chips in a bid to become AI leaders. Human-rights experts worry that software made in the countries could lack ethical guardrails.
Wednesday
Housing starts
Earnings expected from Cisco, TJ Maxx parent TJX, JD.com, and Target
Authors of this Snacks own ethereum and shares of: Apple, Disney, GM, and Nvidia