With Microsoft buying Activision Blizzard, remarkable news was announced yesterday in many ways.
But what is special, apart from the incredible amount of money? And what does this have to do with the hype around the metaverse? I try to give my interpretation in the following.
Microsoft buying Activision Blizzard: The Deal
First of all, I have to say that I myself used to be an avid fan of Blizzard games like Warcraft, Starcraft and Diablo.
The company Blizzard Entertainment merged with Activision in 2007 to become the Activision Blizzard we know today. With this merger, Activision Blizzard even became the largest distributor of game software for a time.
Microsoft now wants to buy this company in a buyout for just under $69bn. Subject to regulatory approval.
Microsoft buying Activision Blizzard brings superlatives in several respects. It is not only the largest purchase in Microsoft’s history, but also the largest in the entire tech industry. And the tech industry is not exactly known for its scarce resources. What’s more, in one fell swoop, Microsoft becomes the world’s third-largest games company, behind only Sony and Tencent.
Microsoft is paying nearly 45% more per share than when the deal was announced. Impressively, Microsoft could easily pay the nearly $69bn out of petty cash. Its cash reserves are adequately filled at $130bn.
What is Microsoft’s strategy and how does it fit into the Metaverse?
But now the question arises why Microsoft is willing to pay such an incredible sum. Activision Blizzard certainly has some interesting products, but the cash flow of almost $3bn alone cannot have been the purchase argument.
Even though gaming is without question a huge growth market, not just since the COVID19 pandemic. In the next few years, the market is estimated to reach $200bn, with annual growth around 15%.
On the sidelines of the deal, it was even revealed that Activision Blizzard is entering the bidding race for mobile gaming giant Zynga. If both deals are successful, Microsoft would certainly like to incorporate them to gain even more access to the particularly strong mobile gaming sector.
Nevertheless, I believe that there are mainly strategic goals behind the purchase intentions. And these also revolve around the metaverse. Activision CEO Kotick has already been quoted as saying that there is a race for the Metaverse.
Tencent pronounces it all in a formula, which is, Gaming + Social + VR/AR = Metaverse. Would you agree?
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Gaming and the Metaverse
As I show in this article, gaming will play an important role on the way to the metaverse.
Blizzard in particular has amassed a wealth of experience in bringing very large numbers of people together in 3D worlds with World of Warcraft (WoW). WoW even holds a Guiness World Record and is the most successful MMORPG to date.
MMORPG is short for massively multiplayer online role-playing game. In my opinion, by the way, this is an outdated term. Today, everything is online and massive. 😉
All of this meets Microsofts Mixed Reality Strategy, which is in fact older than the current Metaverse hype. Furthermore it also spans across the Industrial Metaverse.
A Metaverse behemoth in the making?
What’s your take? A big step towards Metaverse or a lot of hot air about nothing? Let me know your opinion here or on Twitter.
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