Activision was founded in 1979 when a group of Atari employees quit their jobs to start their own company. This company was a first of its kind working as a 3rd party game development company that started developing and publishing titles for other companies. After a long journey of 43 years in the gaming world, Activision Blizzard was sold to the big-tech company Microsoft for a savage amount of US $68.7 billion dollars. It is being said to be the most expensive sale in the history of video gaming. Activision Blizzard has been the biggest owner of popular gaming franchises under its authority including Candy Crush, Call of Duty (COD), Diablo, Starcraft, and World of Warcraft. And now these games come under the ownership of Microsoft along with millions of fans of these titles. But what is going to change with the new ownership, let’s find out in this article.
The motive behind the acquisition
Acquiring gaming platforms in exchange for big money is nothing new in the video game industry. Activision also partnered with Blizzard in 2008 to become a more successful platform. Big tech companies keep acquiring pre-existing successful platforms to increase their market value. But buying Activision Blizzard was a big step taken by Microsoft. However, Microsoft has made some aggressive purchases in the last decade including Minecraft developer Mojang, and Elder Scrolls & Doom publisher ZeniMax in the years 2014 and 2020 respectively. These purchases have made Microsoft a leading company in the gaming world, besides Tencent and Sony. This massive acquisition is a huge step taken by Microsoft to increase their subscribers in order to have an increased user base. They have planned a big business strategy in the video gaming industry to focus more on buying rather than selling their services to have an increased user base. Microsoft provides Game Pass Service that requires subscribers. Game Pass is a platform similar to Amazon Prime and Netflix which allows its users access to numerous games by charging for monthly subscriptions. Microsoft has reached a prodigious number of more than 25 million subscribers on the Game Pass. If a user is paying a monthly fee of US$16; 25 million subscribers generate about US$400 million revenue in a month. With new games launched on their platform, Microsoft now has a huge fan base to subscribe to their game pass service.
Leading Gaming Platform
Microsoft has the power to make games under its ownership only available at the game pass and users will be drawn to its own platform while leaving behind gaming consoles and other gaming platforms. It has the potential to dominate the gaming world on its own. This strategy is widely being used by all the big-tech digital platforms to rent their services rather than sell them. Individual games are also adopting an in-game purchases strategy to sell passes and additional gaming ad-on to the players for having an exclusive experience. Games that create their own ecosystem by allowing in-game purchases include Call of Duty, Hearthstone, Fortnite, etc. Users pay for services such as passes, costumes, guns, cosmetics, extra lives, and many more.
Microsoft buying Activision Blizzard means that all the game renters coming under these game franchises will now be paying to Microsoft only. Usually, gamers stay religiously committed to specific game titles which will act in favour of Microsoft as gamers will keep playing their favourite games irrespective of the ownership. Furthermore, data mining from such a huge population can be done to provide personalised services to customers.
How is it going to affect players and developers?
Changes for players wouldn’t be immediate but might be seen somewhat later. Microsoft might take away the freedom of making its games available on other platforms. In that case, gamers will have to shift from other platforms such as Steam to Microsoft Game Store to be able to keep playing these games. Acquired franchises for its own platform will be a huge step taken by Microsoft to increase its fan base, revenue, and popularity. For a player, it wouldn’t be much of a problem to play via another platform. However, the situation can be worse for those who use PlayStation and Mac for gaming as they will have to buy a PC or an Xbox to get access to these franchises.
People are also concerned if large mergers will suppress creativity and innovation among video gamers. But that is not going to happen since most of the revenue generated by gaming enterprises has constantly been focused on a noticeably small number of risk-averse corporations. Studies suggest that only the top ten video gaming companies account for almost 49% of the entire gaming industry’s revenue. Instead of such huge revenue generated by well-established gaming companies, creative and innovative games are developed by smaller companies with much fewer resources. This transformation has occurred over the past decade due to the emergence of platforms and game engines such as Unity, Unreal, Steam, and Xbox that provide innovative tools to game developers besides a huge audience. However, it is expected from Microsoft that the latest acquisition will work its best to improve games in terms of innovation and creativity.
Moreover, Activision Blizzard has been accused of sexism, abuse, and harassment in the past at its offices. We hope that Microsoft will be able to introduce a positive change in the work culture now.
Is Microsoft entering the metaverse space?
This acquisition is also being seen as an entrance to the metaverse space. Metaverse is seen as a potential technology to evolve software and social media over the internet in the coming years. Metaverse is a term used to define a virtual world in which people can communicate as their 3D Avatars. This will be like a virtual space through which you can enter the internet and communicate with others in real-time with the help of AR (Augmented Reality) and VR (Virtual Reality). Gaming would be the first place for the potential introduction of Metaverse technology. Have you seen the Free Guy movie? Gaming is going to look like that a lot in the future. Gaming would be much more fun after the arrival of the metaverse. Gamers would have the advantage of creating their own world from their avatar’s look to the buildings in the game.
Microsoft has been trying to acquire the major gaming platforms in the industry for a long time now. There must be a big reason behind all these acquisitions. And with the latest purchase of Activision Blizzard, it has become a step closer to its motive with major games under its ownership such as Call of Duty, Warcraft, Candy Crush, Tony Hawk, Diablo, Overwatch, and many more. All the big tech companies are preparing to enter the metaverse. With the latest announcement of Facebook changing its name to Meta, it is very clear that more companies are on their way to entering the virtual world. Microsoft now has a large gaming population and such big gaming platforms to introduce metaverse in the gaming industry. With Microsoft’s well-laid plans, it’s only a matter of few years before we will be able to play games in metaverse space.