Microsoft's Purchase of Activision Changing the Gaming Landscape
As a tech giant, Microsoft has long been a monopolist. For its games division headed by CEO of Microsoft Gaming, Philip Spencer, which has the Xbox console as the focal point, the monopolist continues to expand its reach and foundation in the gaming world. In a massive all-cash deal wherein each share costs $95.00 with a total value of $68.7 billion, Activision Blizzard will soon be in the hands of Microsoft. Microsoft's play in the gaming business would allow them ownership over games such as Call of Duty, World of Warcraft, Candy Crush, Diablo, and Overwatch from the studios of Activision, Blizzard, and King. Aside from the initially mentioned studios, Double Fine, Ninja Theory, and Obsidian Entertainment are studios previously added to the growing gaming business of Microsoft.
Microsoft's Stance on Activision Blizzard Deal
The company plans to include both new and old games from Activision Blizzard's array of games in its catalog into its cloud subscription service called Game Pass. The purchase aims for players to have a gaming experience with ease, according to the collective emphasis of Nadella, Microsoft CFO Amy Hood, Spencer, and Activision Blizzard CEO Bobby Kotick. The gaming industry is bound to change with this leap taken by the Microsoft Corporation. Moreover, another goal stated by Spencer is to reach an increased number of players. A new category of entertainment will soon be available for more players. Hence, the device-agnostic future Microsoft envisioned meets reality gradually as big-name titles become its possessions.
Crash Course on How Big Companies Work
There is no secret to how big and powerful companies attain immense success. It is, however, through adaptability. For instance, while other big companies are left in the dust and inevitably knocked out of business, others such as Microsoft remain competitive. Spotting technological trends and exploiting key software technologies became its advantageous abilities. The reasons emerged from new research by Harvard Business School professors Marco Iansiti and Alan MacCormack. Despite the hefty amount of money required to purchase the video-game publisher, this strategic deal will bring long-term gains to Microsoft.
What's In It for Microsoft?
Through this power move by the company, mobile gaming also becomes a target for expansion as metaverse platforms continue development. World-class content; and an inclusive, accessible, and safe gaming environment for players and creators summarize the investment goal of Microsoft. Additionally, in this deal, the independence of the gaming company does not become recipient to compromise. Microsoft still allows independence and creativity in developers to ensue. Also, along with the deal are 10000 employees of the gaming company.
Aside from this merger of Microsoft with Activision, Microsoft has had numerous successful game mergers that happened in the past. In 1996, the first game it acquired was Exos, a company for video game controllers. In the same year, it acquired Electric Gravity. In 1999, added to the list was FASA Interactive and Access software. Come to 2000, Bungie, Netgames, and Digital Anvil also merged. Ensemble Studios, Rare, Lionhead Studios, Massive Incorporated, Twisted Pixel Games, Press Play, and Mojang, to name a few, comprise the companies acquired by Microsoft. Over the span of three decades, the company had myriads of successful game mergers. In the past five years, more game companies added to the long list of mergers and acquisitions of Microsoft.
Victories of Microsoft and Activision
The Xbox celebrated its 20th-anniversary last year and today remains one of the largest companies standing in the console business. and it became a contributor to the growth and change in console gaming over the years. To add, the release of Forza Horizon 5 of Microsoft in 2021 became the Xbox Game Studios strongest launch as it garnered 4.5 million players in a week.
For Activision, it developed the famed games that many players enjoy. It bears the top spot in being a worldwide developer, publisher, and distributor of interactive entertainment. The target of interactive entertainment produced by Activision is gaming consoles, hand-held platforms, and PC. Call of Duty, Crash, and SpyroTM are among the popular franchises that raked in players and profit for Activision.
Microsoft-Activision Deal Effect on Sony and Nintendo
The acquisition of Activision by Microsoft poses a threat to the home of PlayStation - Sony. Sony took a critical blow after the deal became public with a 13% downwards swoop in the shares of the maker of the PlayStation, which was their worst stock price plunge since 2008. Gaming content is the cause for concern for Sony as Microsoft leveled up its gaming content. Also, with Microsoft's Game Pass cloud subscription service, a strong challenge persists for the PlayStation series of Sony.
In comparison to Nintendo, Sony suffers a heavier impact. Only minimal blow has reached Nintendo as it leans more toward concepts and content. The head-on clash is between Sony and Microsoft as they operate likely, while a small corporation such as Nintendo remains separate, strong, and unbothered.
Yay or Nay?
The deal will close in 2023, and only good claims about the entertainment and metaverse platform potential of the merger have been released by Microsoft. Furthermore, in the gaming industry, the future of Xbox will be secured once the deal is closed. Also, with the help of Microsoft in the form of resources, Activision Blizzard could approach game improvement and development notably. The merger sounds promising, but players will have to see if it pushes through approval. By then, gamers can yay or nay in finality as the current impression for the merger is guarded optimism.