From the heart of where innovation money and power collide. In Silicon Valley and beyond. This is Bloomberg Technology with Emily Chang. Emily Chang temperatures go in this is Bloomberg Technology coming up in the next hour. Activision Blizzard employees taking a stand. Staging a walkout to press CEO Bobby coated to step down. This after report he was
aware for years of sexual misconduct claims including allegations of rape at an Activision studio. We will bring you the very latest. Plus it has been an uphill climb for Palatine shares jumping after a one billion dollar stock offering brings in major investors. Well this take the connected fitness company over the hump after its grim forecast for bike sales and sign ups. We'll discuss. And rollbacks shares on the rise after four days in a row including its Investor Day today. Our exclusive interview with CEO David Suzuki about paving new ways to play games into the metaverse later this hour. We'll get to all of that in a moment. But first let's get a look
at the markets with Bloomberg Markets Gupta. And stocks getting a lift from solid economic data out today. Kristie take it away. Well Emily Green on the screen in the markets is really where ended up. But the question is is the consumer spending. And we got that answer really loud and clear today. And it is retail trade data actually showing that spending is actually higher month over month. And on top of that blow out earnings from Home Depot and Wal-Mart really signaling that fiscal stimulus and
monetary support. Well it's not gone yet. It showed up in the stock market. This be five hundred up zero point four percent. We still saw that tech out performer saw that defensive. But ultimately clothing with tech as one of the best performers. Tesla of course leading the way higher. But resentment and a little sour today. And you can really see that in the Bloomberg
Galaxy crypto index down 7 percent. You saw Bitcoin especially retreating from those record highs. I want to show you a micro story though that really caught my eye. And that of course is revealing a 15 percent intraday gain actually boosting its market cap to pass some of his major competitors B Y D and Volkswagen. It is now competing inching its way higher to
Toyota's market cap in particular. Remember Emily this IPO IPO excuse me debuted just last week. So really an eye watering rally. Let's get to some of those other top tech movers. I want to hit it off with Palatine because they actually issued a one billion dollar stock offering to raise more money. You know they've been having that cash crunch. And instead of actually dropping the 8 percent premarket that's Worley where the stock started it actually gained because they got lots of demand not only raising one billion dollars that were supposed to but an extra million on top of that really thing that investors were wanting those those shares. You see those shares soaring 15 percent. Qualcomm as well putting out some pretty good earnings an upbeat forecast but most importantly partnering with BMW 4 to supply chips for their autonomous vehicles. Also good news for
that company in particular up almost 8 percent. But on the downside Emily Activision still dealing with the sexual misconduct stories. The Wall Street Journal reporting that the CEO actually knew about what was going on with his within the company and then the employees staging a walkout until he supported it. The board of course supporting Activision CEO. But is that kind of tug of war that's really weighing on the shares today. All right Kristie I want to continue on that Activision story you just mentioned. Workers at the company staging a walkout pushing for CEO Bobby Koda to step down after these multiple allegations for more. I want to bring in our Bloomberg Tech reporter Jason Trier who
covers gaming and has been closely following all the developments here. Jason the revelations from this Wall Street Journal story are incredibly alarming. Walk us through the new information here and what Bobby Codex supposedly knew and did not know. Yeah thanks so much for having me. Emily so the report was really explosive is a bombshell. It alleged that Bobby Kodak knew about all sorts of things that he was looped in on an email and in a report of a rape by an employee of Sledge Hammer which is a studio that makes Call of duty games. It just detailed all sorts of instances where he was looped in and essentially painted a picture of him as a CEO is very hands on in control of all communications and matters at the company.
So he absolutely knew. The Wall Street Journal also reported that he is the perpetrator of some of these instances telling telling some stories about him dealing with assistance in ways that they found uncomfortable. One assistant said that he left her a voicemail essentially threatening her threatening her life which he and the company claimed was hyperbolic and jokey. But the picture that The Wall Street Journal paints is not pretty for mollycoddling. Activision has called the reporting inaccurate and misleading. They say they're committed to being an inclusive company. And
the board standing behind the Bobby Kodak saying that they believe he's appropriately address these issues brought to his attention. What's the likelihood that he can survive this. Given the direct pressure now being put on him by his own employees. Yeah you know it's so it's it's a strange thing. Bobby Kodak is the longest running CEO in the video game industry. He has been running Activision since I believe in 1990. And he has made a lot a lot a lot of money for that board of directors for shareholders. He has just pumped up the stock through the roof and obviously lost some gains recently since the lawsuit this summer. But it seems like the board has faith in him to keep it going. I beginning of today when I saw the Wall Street Journal
story I honestly thought he would be gone by the end of the day. So it was a little little surprise to see the board standing by him because it feels like he's just completely lost the faith of his employees. Right now as we speak about 150 people are marching or staff are kind of protesting in Irvine California where Blizzard's offices blizzard is a subsidiary of activism Blizzard. And they are calling for his immediate ousting. Even more people are protesting virtually as part of this lockout. So it feels like he's lost the confidence of his staff. So I'm actually pretty surprised that the board board is saying they
stand by him. All right Jason Trier thank you so much for your reporting on the story. We'll continue to follow how all of this plays out. Definitely very shocking revelations in that Wall Street Journal report. Now if you were trying to listen to music on Spotify get ahead on holiday shopping with Etsy or Target a massive cloud outage might have slowed you down. Multiple major company Web sites from Home Depot to Snapchat were down or having issues Tuesday afternoon first indicated on the outage tractor down detector user reports spiked just after noon Eastern. In an incident report published on Google's cloud dashboard the company confirmed it had suffered a global outage and stated they were working to resolve the issues. Google said some problems were caused by bad network configuration and that they
will publish an analysis of the incident once an internal investigation is completed. Coming up how Slack is adapting its platform to meet the needs of an increasingly digital work environment. To speak with slacks at Stewart Butterfield following day one of its Frontiers conference next. This is Bloomberg. Back to the very early days of slack. We came up with this mission to make people's working lives simpler more pleasant and
more productive. And part of that ambition was always finding a new avenue to bring software and systems and tools that people use into the environment where the discussions are happening and the decisions are being made. Eight years after launch the messaging platform Slack is now one of the leaders in business communication and as whole companies now shift to remote work. Businesses across industries have realized the need to digitize their operations. Let's talk about
how Slack is adapting with these changing trends. Joining me now Slacks young co-founder Stuart Butterfield Stuart. Great to have you back with us. You just kicked off your frontiers conference today to talk about the future of work in more connected experiences. How is Slack stepping up to make these experiences even more seamless and real. What a great setup. Thank you and great to be here. I think there's two tracks. So two significant announcements and one is maybe five or six years in the making. This combination and a vision we had to give people building blocks so they can easily assemble and reassemble to build workflows that allow them to deal with hundreds or in some cases a thousand plus tools in use at an average large enterprise. I'll come back to that a little later. But the other one is is much newer and fresher and developed in response to what we saw
from customers what we saw on ourselves during the pandemic. And that's things like huddles which launched in July. It's like audio only not quite a call but more of a call replacement clips which is for asynchronous video meetings so people can free up some time on their calendar. And it's it's really you know honestly it's an exciting environment because there's a lot going on and you really see customers and organizations digging into the challenges. Now what are the things you're doing is
you're working to give more non-technical users the ability to customize their lack experience. I recently spoke to the CEO of Air Table. They're also working on these no no code low code applications to give users the abilities to build their own apps even if they don't know how to code. Take a listen to what how we lose. Sad about the future of work and how it is shifting and why we need these kinds of experiences. In the old way of working there you kind of get away with ad hoc
ways of tracking data sharing data. You would meet with people send emails back and forth tapped on the shoulder. And I think today when you have all these people destroyed in different places that just doesn't steal anymore. How game changing do you think your new suite of products can be. In this post pandemic environment.
Well I think there may be a more valuable this year than they would have been last. And will be more valuable still in the future because they may get a little bit more concrete. And of course I agree with Howie and Slack on their table have a great integration. But imagine your recruiter and the typical day you send out an offer letter to a candidate. Good news. They sign it. You get an email from DAX sign. Now you've memorized all these steps. You're going to go to the applicant tracking system
where you record all the jobs that are open and slipped that one off. Turn the job listing on the Web site off you get it to the H.R. system and say that this person has a start date. You can go tell the hiring manager and it's really allowing people like that recruiter or people in benefits administration legal or finance sales to kind of pull those things together and automate a lot of that work. So that when the notification comes in to DAX I'm the update of the applicant tracking system and the H.R.
system moral automatic or as close to automatic as you can make it. And the idea here is that the people who are doing this work have a much better idea of the workforce that are going to reduce friction and simplify their lives compared to the professional software developers who are building the tools. So ideally there's like a collaboration between the non-technical and users and the people making the software. Now while more people are working remotely not everyone is. Some
are hybrid some are in the office full time. How do you minimize that friction. You know and I know you're you're obviously adopting this in your own workforce. What are the risks of this new work world. Well I mean. It's hard to say because the pandemic is like such a once in a lifetime event. And I think we've made some permanent chefs Mark Gurman changes. There's been a little bit of a revolution in
work but obviously at some point the actual threat of the disease kind of mitigates and we learn to live with the risks. People want to be able to get together but I don't think you're going to get workers to give up the autonomy and flexibility that they've received over the last couple years because you know even let's say two days in the office isn't a 60 percent reduction. You know you don't have to go for three days. For most people it's infinite increase because they're going in zero days now. And this power dynamic has definitely shifted towards labor side to suit the employees from the employers. And that's
happening across all ISE industries. So I don't think it's going to be up to the leaders necessarily to dictate that people have to come into the office. Good news for them is you get to select from a much bigger talent pool you know people all over the world. I don't give stock. Talk to Stuart. Since the Salesforce deal closed and Salesforce has been talking about a digital HQ. What will slacks role be in this. Well I think you think of it as the place where everything comes together. And there's this interesting thing. I'll put myself in this category as well. Historically we thought a lot more about real estate leases and a conference room design an office filled out seating chart and all that kind of stuff. Relatively little attention to the digital infrastructure that supports productivity and
collaboration. But imagine some alternate universe where in March 2020 we were all allowed to go into the office but all of the software that we used to communicate was taken away. We would cease to exist. You like companies that have done really well over the last couple of years just would disintegrate in 48 or 72 hours. So we've obviously switched to the relative importance. It's not the digital supplementing in
person. It's the other way round. It has been for for many years. And it's time for leaders to start paying more attention to that digital infrastructure and thinking about. You've been thoughtful about the design and investing in employees ability to communicate doing more training. All of that kind of stuff. Now that you've been at this hybrid slash remote mode for a year and a half what have you learned about yourself and how you work that's surprised you. Well you know again it's hard to separate the pandemic part but it's been a it's been a really interesting experience. So we
were talking about this earlier but I have a six month old now so obviously born during the pandemic. And I went on on leave and home before I'm going to leave. I was at a home must have for more or less every day. I got to spend a couple of months really deep in the experience with my son. But when I went back
to work I was still just at home. And so I could spend an hour with him in the morning. And you know I walk out of a meeting on a little break I could go see him. It's very different than the experience of like I got to catch the 6 13 train to make sure I get home before the kids go to bed. And that's just one example of the kind of thing that it's not so easy for people to give it up. Right. And something you didn't know you were you would miss. Right. Got to ask you about the metaverse. What's what's your view on the metaverse and what will slacks role be in it. Are you bullish. This just might be one of those things where I feel like I'm
getting old because I don't know. I don't mean that I'm against it but the applications are a little bit hard for me to imagine. And just like the physical setup of having a headset on perhaps when the technology is a little bit more advanced. Now having said that I think there's a lot of applications that aren't really so much about knowledge work. But if your you know you
work at Boeing and you're wiring an airplane augmented reality would be a huge boon. Same thing in fulfillment centers and factories and things like that. And Slack was one of the partners in the metaverse lunch. Ideally we see something that's less you know in the mode of people typing at their keyboards and sending messages that are principally text and more about the button press the acknowledgement the investigation and the notifications coming in and giving people an easier way to deal with it. That might be one of the most honest answers I've heard yet
about the metaverse Stuart. There's a lot that we just still don't know. Thank you for acknowledging that. Slack CEO and co-founder Stewart Butterfield. Great to have you back here on the show. Thanks for stopping by. OK. Coming up online wholesale Marketplace Fares says its goal is to help mom and pop shops keep up with Amazon. We're gonna introduce you to that company making a bet on the rise of independent retail around the world. And it's now valued at almost 12 and a half billion dollars. And on our way to the metaverse how big an opportunity is augmented reality glasses.
Qualcomm president and CEO Cristiano Munn seems to think it could be even bigger than smartphones. Take a listen. Reason we're very bullish on this. We believe that when you look at your phone today the screen is really the limiting factor. There's so much more that you can do but you're limited by the screen. And I can see a future when everybody will have a
companion glasses. You gonna wear your smart glasses next to a smartphone. This opportunity could be as big as the smartphone itself. The online wholesale marketplace fair just hit a twelve point four billion dollar valuation. This after closing four hundred million dollars in a new investment round. Fair is all about putting power in the hands of independent retailers helping mom and pop shops take on e-commerce giants like Amazon. Let's talk about what the future holds and how the supply chain crunch is
impacting their plans with Fair CFO Lauren Cook's Levitt in law. Thank you so much for joining us. So how do you give that power back to mom and pop shops and help them challenge Amazon. Well thanks for inviting me Emily. The main way we do that is by giving them technology tools that historically have only been available to much larger businesses. So we give them the opportunity to shop on a machine learning based assortment. So the recommendations that they're getting we're pretty confident those products are going to sell in their stores and then we give them other tools that are typically only available to much larger businesses like net 60 payment terms and the ability to return goods when they're not selling in their stores. So all of that is something that historically has not been an opportunity for smaller businesses and we know they can compete when we can level the playing field for them. So how are these supply chain challenges impacting these smaller businesses and entrepreneurs.
How are they keeping their shelves stocked especially going into the holidays. So we're a two sided marketplace. On one side our supply are forty thousand brands in 80 countries and then the demand side is over 300000 retailers in North America and now in 15 countries in Europe. And they're facing different challenges associated with the supply chain traffic jam on the brand side. They're trying to get components but they're also able to communicate with retailers about what they have available and in stock in our quick ship. And that's something that retailers really appreciate and come to fair and they can find out what's available. They can shop based on their values including made in the USA. That oftentimes used to be something that was important to them for the origin of the business. But now they're also using a shorthand for things. They think they're going to be able to get into their stores more quickly and accommodate their customers. Interestingly enough we know that consumers want to
shop with their local retailers. They feel really confident they're going to pick products that resonate with them but they also feel more confident that they can move more quickly and adapt to the changes. And they can find small goods with 40000 brands to choose from. They can fill a void in their inventory very quickly by coming out there. Four hundred million dollars in new funding. How do you plan to use it. Well there's really three primary areas the first is to continue expanding both in more categories and more geographies. I mentioned we enter Europe over the last six months have been really excited by the progress we're seeing there. We are over 150 million dollar run rate. That's took us three years to get
to that level and in North America and we did that in six months. So we'll continue emphasizing that growth. Second we'll continue building tools that support both our retailers and our brands. Again level that playing field. And then third we'll continue building out. Our team will end this year and about 800 employees and expect to double that next year as we work on all the ways that we can support the brands and retailers to chase their dreams. Almost twelve and a half billion dollars. That's a
pretty big valuation. What are your plans to go public. Well right now we're really focused entirely on supporting the brands and retailers that are our customer base. If it turns out that being a public company would be in service of achieving those dreams it's something that we would consider. But right now we felt like this public this private financing was the right. And I know you're really passionate about women entrepreneurs women owned businesses. Quickly. How are women business owners faring post pandemic. Well we read so much about the how this
has been a female recession. And the women were really disproportionately impacted. One of the things that's so beautiful about there is we provide working capital tools for all businesses small businesses. And many times those are underrepresented minorities and women. And what we've seen from both our brands who continue to grow and continue to come to
fare now over 40000 of them. And from our retailers who also continue to grow and succeeding drive more volume on our platform we see them succeeding. And it's something that our all of our employees are really proud of being able to support. CFO of Fair Lauren Cuts love it and thank you for joining us. Coming up while expectations were low heading into the first face to face summit between Presidents Biden and Xi Jinping the virtual meeting appears to be a political success at least on its face. We're gonna head to Hong Kong for all those details. And later I will be speaking with Roadblocks CEO David Suzuki in an exclusive interview covering some of their new announcements from their investor conference and their push into the metaverse next. This is Bloomberg. Welcome back to Bloomberg Technology Emily Chang in San Francisco.
Let's head back to New York where Christie Gupta has been taking a look at the markets. Chris what are you watching now. Well Emily in honor of President Biden and President Xi having a virtual meeting I thought we'll take a walk down memory lane in particular of the trade war back in 2013 when you did have a lot of those spats actively reflect on the U.S. stock market. You see the orange lines essentially the stocks in the Russell 1000 that had a lot more exposure to China. The white line is the Russell 1000. You can really see the underperformance if you were exposed to China. But that has seemed to that gap has
seemed to close now really telling you that trade war impact that was so strong four years ago. Well it's faded a little bit. But another place I really want to look for that impact is in the semiconductor space because a lot of American companies are dependent on semis and a lot of those chip makers have supply chains that extend all the way back into Asia. But this year Emily they've been soaring and it has a lot to do with that global chip shortage. But it also has a lot to do with this active understanding that you need chips for things like these. You need chips for things like smartphones. So essentially that
time lag and the idea that the president of Biden's administration is actively willing to invest in infrastructure. You can see just how big the gains are. One hundred and thirty one percent when it comes to end video. And the gains only get to somewhere the 80 somewhere in the 30s. That is not bad compared to the S&P 500 year to date performance. I want to end with Chinese tech versus U.S. tech because that is the divergence that's far more clear and has less to do with the trade war and more with Chinese regulatory scrutiny especially in the last two years. You can see that gap has widened quite a bit and continues to widen as you start to see more restrictions on what these Chinese tech companies can and cannot do and where. What is that doing to U.S. tech. Well it's rerouting funds to U.S. tech. And you can see that in that
white line really outperforming the Golden Dragon index which of course holds those U.S. listed Chinese ADR. All right. Kristie thanks for that. Meantime as Kitty mentioned U.S. President Biden and Chinese President Xi Jinping attempting to stabilize what has been a tense relationship between the world's two largest economies.
They agreed to keep on talking without letting disagreements over Taiwan and other issues derail U.S. China engagement. The virtual summit lasted more than three hours longer than expected. Bloomberg Stephen Engle joins us now with more. So Stephen give us the big headlines. Well we got confirmation from National Security Adviser Jake
Sullivan that Taiwan really did play a large part of those three and a half hours of discussions. And for the most part from both sides you reading the comments from state media and reading the readout from the White House it seems like the engagement was quite positive. And as China has been trying to you know return the relationship to a higher track and a better track a more productive track for the two world's largest economies of course. But Taiwan is is a flashpoint and a sticking point. And there's a new development on that front. Of course Taiwan being the critical cog of course in the global supply chain for tech. It is critical to know kind of track its future. And even Xi Jinping wanted clarity from Biden administration on you know does Biden support the one China policy. Does it support the status quo. And essentially Biden told Xi that yes we support
the one China policy and that he does not support independence. That's the bottom line. And even state media in China has said Biden opposes independence for Taiwan. Well let's fast forward a few hours to just a couple of hours ago Biden on his way to New Hampshire said on the one hand he supports the Taiwan Relations Act. But at the same time he said quote Taiwan is independent. It makes its own decisions. And now I wasn't there. So I don't know if Biden was stepping in it again and misspeaking. I think he was essentially saying well look Taiwan is you know it governs itself but that doesn't necessarily mean
it's independent. So this is going to reopen the wound a little bit rip off the Band-Aid from yesterday. What does Biden actually mean about Taiwan. Indeed. Well what does this actually mean about the future of the US China relationship. It has been incredibly frosty that of course started under President Trump but it's a policy that
President Biden has seemingly continued. Well it's understandable to a certain degree why Biden would not remove the tariffs or the specter of this this trade war. Because then you're removing all that leverage in the first year of office. So I'm sure there are inclinations to remove the tariffs. I mean it's caused anecdotally and also by the numbers some inflation in the United States. We all know inflation is a big problem right now being dealt with by the Fed. But again if you take away those tariffs you immediately remove a big lever of leverage with the China relationship at a time when it was at a at a nadir really. And rebuilding under a Biden vision of China rather than the Trump vision. So it's going to take time. It's still the first year of the Biden administration and they're still trying to work out what works with Xi Jinping. Xi
Jinping is the strongest Chinese leader now we've had since Mao Zedong. So it's a different dynamic. Supply chain issues not going away. China is a critical part of that. How important is it to keep the peace especially right now in six weeks you know through the holidays. Well absolutely I mean look there is a bifurcation going on in the tech world and supply chains and you know China looking a little bit more inward and trying to be more self-sufficient for chips to other high tech products. So they're looking at the at the domestic economy. But of course the United States needs that
those imports from China and Taiwan as well where the supply chain is crimped. But there's an interesting story on the Bloomberg terminal this morning. I don't have time here to get into it but it's a lengthy piece. I encourage all of our viewers to to read it about this new division in China called Shin Truong. And it is this is is basically government backed. And it
is solely with the purpose of identifying suppliers in China who can supply China's high tech ambitions. They're going to be vetting and you know adding input from the government's perspective on hiring and the products that need to be made in China by Chinese companies. So they're less reliant on U.S. suppliers. All right. You can check that story out on the Bloomberg terminal or at Bloomberg dot com Stephen Engle. Always appreciate your view from Hong Kong. Thank you for joining us. Meantime Amazon has decided not to go ahead with a major office expansion in Jersey City. That's a blow for landlord Matt Kelly Realty earlier this month. Bloomberg reported Amazon had been close to a lease with Matt Kelly for roughly four hundred
thousand square feet on the New Jersey waterfront. Bloomberg has learned the deal fell apart after Amazon backed out last minute. Coming up shares of Palatine moving higher after saying it'll sell about one billion dollars of stock. Could this be the U turn. The connected fitness company needs to keep the post pandemic momentum going. We'll discuss next. This is Boomer. Shares of Palatine rising the maker of connected bikes and treadmills saying it will sell a billion dollars worth of stock shares have fallen 45 percent since Palatine slashed its annual revenue forecast by as much as a billion dollars earlier this month. Sara Mark Gurman joins us now with more. So Mark what exactly does this share offering mean. So this means that there
is now a secondary market of shares that peloton is selling to investors to really build up more capital and they expect to build up more than a billion dollars in capital here. Their share price is in the mid 50 dollars per range now or after falling by nearly half the share price that they're going to be selling these additional shares that come in at about forty six dollars a share I believe somewhere in the mid 40s. So that's quite a bit of savings there in order to raise that over a billion dollars in capital. And we sort of see how to get your stock out of a funk. Well you do a move like this. Is it going
to work or do they have to get the numbers to back it up. Well the shares went up today but they closed up 16 percent from yesterday. So it did work at least from today people being able to come in at that much lower price. This is the first time since the IPO a few years ago. That peloton obviously did a major public offering like this. They say they will be profitable again by fiscal 2023. But investors are really going to want to see that happen before they really continue to invest heavily in that stock beyond this initial one billion dollar raise.
Walk us through the challenges that Palestine is facing their grim forecast and what you're going to be looking for through the holiday season. Well this is really self-inflicted wounds in one respect. One is they should not have guided. They should not have provided those forecasts. Only three months ago they said they would be making a billion dollars more than they're actually going to in fiscal 2022. But that doesn't affect that doesn't really impact the overall business. The numbers really be the same. We just won't know about the forecasts. They clearly are anticipating stronger results coming out of Covid than they're going to have. They see people going back to the gym. They see people going back to the
offices. So they're really going to continue to have to invest in their marketing and other strategies and other types of new categories of products to get people hooked on to peloton in order to get back to those levels of profitability. Early next year they're going to be releasing the peloton guide. This is going to be a product that comes in at less than half the price of their bike. This is a home strength training device. So that's going to be a key way to add more people to the ecosystem as they get more people on both connected and digital subscriptions. I think they do have a compelling case to make even though you know Covid is nearing the end in terms of economic re openings. There's still probably is a place for
people working out at home. People button treadmills and other devices for home for many years and Peloton really wants to be the king of that. What's the main competition here. Is it other bike and tread makers or is it the gym or is it coming out of a pandemic and everyone not being on lockdown. I think it's a mix of the three right tonal is their big competitor now in strength training the tonal makes a very similar device. I'll be four to five times more expensive than the peloton guide. I think it's the lower end treadmills that people are buying for a few hundred bucks on Amazon that are a big competitor right there. I also think you know the complications from Covid a combination of the mis
estimation of demand underperforming supply chain. I think these are all red flags that have basically torn apart the peloton story for the next few quarters. So what's next. What are you watching. Obviously the peloton guide coming out in early twenty two will want to see reception to that will want to see how that product integrates with their other devices. There are also other products in the pipeline. There is a rowing machine they have been working on. I want to see them find a way to get the treadmill come out the treadmill that's even less expensive.
Right now the treadmills at twenty five hundred dollars. If they can get that down by another 1000 dollars that could be a really nice sweet spot for people and even lower and bike that comes in at under a thousand dollars. And I think marketing their financing plans with their advertising their different products at a monthly rate instead of the full purchase price. A stronger push in to that perhaps some sort of partnership with a a dedicated credit card of some sort to get people hooked onto peloton really hooking people into the subscription and making it so there's lower churn. I think all of those things combined could be pretty compelling for the company. In addition to to wearables they're coming out with their first arm worn wearable
this heart rate monitor that connects to the peloton guide. It's also going to be available for their other products eventually turning that into a completely standalone device similar to a woop or an Amazon halo could be fairly compelling as well. There's also a whole ecosystem of accessories for the fitness market that they can get hooked on to. Also the pre core acquisition a commercial position for them to get into existing gyms existing hotels college campuses. Getting the peloton outside of the home is a very potential strong area for them. And that really alleviates the concerns around you know do people really want to work out at home versus not telephones at home. Paul in your gym does it really matter to the company.
They're still selling that equipment and drumming up their bottom line. All right. Mark Gurman thank you for sharing that with us. Lots to watch out for. Appreciate it. Coming up I'm going to be speaking with Roadblock CEO David Suzuki in an exclusive interview. You don't want to miss. From the future of gaming to the metaverse and beyond. All that coming up. This is Bloomberg. Roadblocks on a road passing Activision as the world's most valuable gaming company and shares hitting record highs the company kicked off its investors conference. With us now Roadblocks CEO David Suzuki. Here for an exclusive interview
show. Obviously huge day for you David. What are the key takeaways for investors today about where roadblocks is going. Emily thank you for having us on the show reaching out to our community and our shareholders of course. We talked a lot today about innovation. We had over twenty one executives I believe from the company sharing different areas of our product. Stack talked a lot about a foundation of safety and civility running throughout really the whole company and everything we do. We
talked about our amazing community that powers everything on roadblocks everything the millions of experiences all built by this amazing community. Now roadblocks just overtook Activision as the world's most valuable gaming company. Are we seeing a changing of the guard here in terms of the kinds of games people want to play now and into the future. We we shared a vision today. This future category sometimes called the metaverse. We think of it as a human co experience category that supports people coming together to socialize to learn to play someday to work to experience entertainment and amazing brands. So we don't usually think of ourselves as a videogame company. That said are millions of creators make amazing games and experiences on the platform that sometimes their games and sometimes their music concerts. So I don't know
if it's as much changing as the guard as maybe the emergence of a new category. How far away is this metaverse actually and how is roadblocks going to get us there. Yeah the this this term is really been in the genre futurist sci fi writers authors. There's been a dialogue around this over the last 30 to 40 years. And we're we're actually in the middle of it right now. There's over 200 million roughly monthly people on the roadblocks platform every month. They do a lot of things. They have an identity they have an avatar. They do stuff together. Sometimes when they can't be together in person
they'll go to a birthday party together or graduate from high school together. So we're actually in the middle of it. But it's such an amazing big new potential category that there's a lot of opportunity ahead as well. Facebook just changed its name to Metta and seems to want to own the metaverse. Will they will any one company own this new world. Yeah we're we're really really I think early in this this amazing opportunity. I think it's going to change the way people both communicate the way we share stories. I think ultimately it's going to allow people to learn together in interesting new ways. As more people are working remotely it's going to power
that as well. We're very optimistic about a really big civil society emerging on these types of platforms but we think we're still actually really early. There's a keyword you just said there and that is civil Facebook. Your own CTO has warned about harassment as an existential threat in this new world. And of course there's a concern that the worst of society could get replicated in this new world. You were really early to this in the thinking about this. How what have you learned about creating norms and healthy behavior in the metaverse and making sure that other companies do the same.
It's super important. Within a month of launching roadblocks over 16 years ago my co-founder Erik and I we built our first civil civil and safety system and we manned the moderation queues. Now it's really our top priority. We have thousands of people 24/7 keeping roadblocks civil and safe. We build it into everything we do. We have an amazing group of creative people on
the platform many of them young. We're very proud of how much we've worked to make this a place where people can come together to be with their friends to do things. It's the foundation of our company and we really have no tolerance for things like bullying for example. You see big potential for education in the metaverse and I know
you're trying to get one hundred million students engaged there by 2030. Can you give me some examples like does this mean we can visit foreign countries or you know landmarks on the other side of the world with without having to look at them or read about them online. Well in addition to the millions of people that are learning computer science for example on roadblocks there is also this vision that side by side with books and side by side with video as you mentioned. If we wanted to go to
ancient Rome we might actually go there together in our class experience it interact with the environment and actually see what it's like. So we think there's three pillars of education computer science co experience but we're also optimistic even further off in the future for some people that don't have access to education. They may be able to use these 3D type platforms to join a class to dissect a frog even when they're not near that school. Now you've been expanding in China but you're coming up against the government crackdown there on gaming. How is that impacting you and are you reconsidering any of your plans. We have a super long term view in China. We think this type of technology is going to really connect people all around the world. We're very conservative financially with our forecasts. We don't roll China
into that. And of course as you mentioned it is a changing political landscape. But we take the long view and everything we do as well as respect our community. And we continue to take the long view in China. Well blacks had a widespread server outage a couple of weeks ago I believe. You were down for three days and I'm sure those were three long days for you. What lessons did you take from that as you scale and grow. Would you consider partnering with an H W W or a Microsoft one day to to use their
cloud capabilities. Yeah. So we took this very seriously and you're exactly right. This was three long days. We're going to publish an analysis of what happened and share what we're doing to make sure this never happens again. We were really surprised by the outpouring of our community and
support. And when that outage when we came back up we didn't lose any of the people on the platform which was very gratifying. But it highlighted the responsibility we have with our community to be a 24/7 utility really for them. So we'll share more about that in the future. We took it very seriously. Adopt Me is now the most popular game on roadblocks. I believe you can raise virtual pets there. I think my kids use this 64 million players every month. What are your favorite games on roadblocks Steve. Dave This is really fun. It's almost like asking me which is my favorite child right. Except that I would
have millions and millions of children. And all of these are created by our community ranging from hobbyists who are just starting out or learning to code to large teams that can have 30 40 50 people. Were that we're soon approaching the time when one of the teams on roadblocks is going to make one hundred million dollars a year and some of the most creative people in the world are working on the platform. I personally have a affinity for rail road simulation type experiences. There's a lot on the platform but pretty much anything we could imagine. We'll probably find some experience like that on road blocks.
Well speaking of kids yeah. I'm a parent. And even though you've got these parental control controls I still worry. I still worry. Are my kids safe. Are they developing healthy habits. Are they engaging with roadblocks and this technology. You know in a healthy way. What advice do you have for parents and people like me out there who are still trying to understand how we should moderate our children's experiences. Yeah I think this is twofold. We're we're being very very thoughtful and that we're very optimistic over time more and more as people that come together on platforms like roadblocks will be helping with civility and we'll be giving nudges and hints to actually we'd like to make the world a better place through that for parents. Please talk to your kids. There's this is always a discussion. You can use roadblocks and other forms of media to have a great discussion about this. So we always recommend close communication.
Thank you for that advice. Robots co-founder and CEO CEO David Suzuki great to have you back with us. Appreciate it. And that does it for this edition of Bloomberg Technology. Can make sure you tune in tomorrow to have my exclusive interview with Adam. So Lipski the CEO of Amazon Web Services and Sundar Pichai the CEO of Alphabet and Google.
Just another day here on Bloomberg Tech. You don't want to miss Emily Chang in San Francisco. This is Bloomberg.
2021-11-17