What does Microsoft’s Acquisition of Activision Blizzard mean for the gaming industry?

What does Microsoft’s Acquisition of Activision Blizzard mean for the gaming industry?

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In the dawn of a new gaming era, Sony waves goodbye to their once-beloved mascot Crash Bandicoot, which can be seen here notoriously taunting their rival, Nintendo, during the original release of the PlayStation. No longer the console war it once was, pedantic quarrels over personal preferences such as which brand offers the best controller layout or showcases the fastest framerate, Microsoft’s recent multi-billion dollar acquisition of Activision Blizzard has now prompted much more fundamental questions and overall left many gamers speculating the future of their prized past-time. On Tuesday 18th January 2022, Microsoft announced the details of their deal with Activision Blizzard, promising a $69 billion price tag providing it passes the federal anti-trust hearing in the coming months, or a compensational $3 billion if it doesn’t – a financially sound win-win for Activision Blizzard. The latter encompasses an umbrella of subsidiary units such as Blizzard Entertainment, King, and Activision, which are home to house-hold titles including Call of Duty, World of Warcraft, and Candy Crush Saga.

Although the acquisition will undoubtedly benefit Xbox Game Pass subscribers by providing them with instant and plentiful access to the back-catalogue of games such as Crash Bandicoot, Spyro, Diablo, Hearthstone, and Overwatch, Microsoft’s motivations behind the business manoeuvre are equally self-advantageous. The acquisition will allow them to stake their claim in the rapidly emerging metaverse, an interactive virtual world. The cost of this deal, in perspective, is equal to Nintendo’s entire market capitalisation and nine times what Microsoft previously spent on acquiring Bethesda, a fellow gaming company. The current gaming market is made up of 3 billion users with an estimated growth to 4.5 billion by 2030. Activision Blizzard’s branch King, a leading mobile entertainment company, has peaked Microsoft’s interest and likely accelerated the closure of this deal as data shows that 95% of all players globally, enjoy and partake in mobile gaming and the recent news will thus grant Microsoft access into that profitable industry.

“This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse.” – Microsoft News Centre

These recent developments hinder Sony’s once dominant position in the gaming market by threatening to steer users away from purchasing/using a PlayStation due to the increased benefits of using Xbox as their platform of choice. The ‘big player’ positions traditionally held by Xbox, PlayStation, and Nintendo, have now been replaced by their modern counterparts, Microsoft, Meta and Google. Due to the freshness of the announcement, the specifics of the acquisition are still vague, as is indication of who will benefit from it, who will suffer from it, and in what direction the gaming industry is heading in. After facing over a year of unanswered sexual-misconduct allegations from within his company, Activision Blizzard’s long-standing CEO, Bobby Kotick, stands to profit, reputation-wise, from the decision. The board of directors, whom Kotick neglected to inform during an out-of-court settlement, are seemingly able to overlook the scandal as Microsoft has confirmed the CEO’s place in the deal’s plans – sat at the forefront alongside Microsoft Gaming’s own CEO, Phil Spencer.

Arguably, the announcement has triggered more questions than it has answered. The gaming industry, at this moment in time, is left in a whirlwind of speculation and assumption with little definite detail and no previous mergers at this precedent to draw any conclusions from. The future appears bright for gaming within the metaverse, but a dark cloud lingers over Kotick’s own place within it.

Microsoft’s recent multi-billion dollar acquisition of Activision Blizzard has now prompted much more fundamental questions and overall left many gamers speculating the future of their prized past-time.

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