Microsoft’s acquisition of games studio Activision Blizzard, which reportedly cost $70 billion, will see it become the 3rd largest video games producer in the world. However, the implications are broader, as tech giants race to make headway in the burgeoning metaverse space.
Priming the Metaverse Ecosystem
The $70 billion acquisition of Activision Blizzard by Microsoft, will see the tech giant grow to become the 3rd largest video games producer in the world, on-boarding notable franchises including Call of Duty, Crash Bandicoot, and World of Warcraft to bolster its games offering on both Xbox and PC. However, this is not just about securing games titles at the detriment to rival console producer, Sony, (although the implications are already visible, Sony lost a reported $20bn in market value[i] following the announcement of the deal.) the tie-up will see 400 million active players join Microsoft’s platforms. This highlights Microsoft’s future, and a critical one for not only the games industry, but digital platforms more generally- it is no longer about selling hardware, but acquiring users for an entire ecosystem:
"The fantastic franchises across Activision Blizzard will also accelerate our plans for Cloud Gaming, allowing more people in more places around the world to participate in the Xbox community using phones, tablets, laptops, and other devices you already own."[ii] – Xbox Statement
As such, video games will likely be used as a gateway to the metaverse; a place where digital and physical worlds combine, “generally it refers to shared virtual world environments which people can access via the internet. The term can refer to digital spaces which are made more lifelike using virtual reality (VR) or augmented reality (AR)”[iii]
We have more recently seen the reinvention of VR (Virtual Reality) on both consoles and PC devices delivered via consumer hardware, as well as more mainstream usage of AR (Augmented Reality) as seen with Niantic’s mobile game ‘Pokemon Go’. Yet, it will not only fall to the games titles themselves that draw users in, but the talent within these games studios will be utilised to create immersive virtual worlds and communities, that form a critical part of the Metaverse, and allow digital experiences to transcend boundaries not seen before.
This blog reflects the authors own opinions, it therefor does not reflect the thoughts or opinions of the business, or any affiliated organisations. The information presented in this blog is purely for interest, it should not be seen as direct business advice or investment strategy - using it for such purposes remains at your own risk. Our analysts work hard to gather these insights, as such please do quote and link back to their research, or ask permission, before using excerpts.