Microsoft is buying game publishing giant Activision Blizzard for nearly $70 billion, the largest deal in gaming history. The deal will substantially further the cloud company’s position in the competitive gaming industry, as well as strengthen its role in the emerging metaverse market.
Activision is behind enormously popular game franchises such as Call of Duty, Candy Crush and Overwatch. (It also published some of my favorite childhood video games like Spyro and Crash Bandicoot.)
In recent years, Microsoft has turned its gaming business into a beast that rakes in $10 billion a year. The company makes Xbox consoles, has its own cloud gaming service and has owned ZeniMax Media, the parent company of video game publisher Bethesda Softworks since 2020, as well as Mojang, the company that develop the popular crafting game Minecraft since 2014.
In a press release about the acquisition of ZeniMax, Microsoft articulated its approach to cloud gaming, stating in a press released that “games are the primary growth engine in gaming,” and giving players access to the games they really want to play is what really “fuels” new cloud gaming services.
Due to Microsoft’s growing dominance in the industry, the company anticipates a long regulatory review process for the Activision deal, and therefore, does not expect it to close until the next fiscal year. When finalized, Microsoft said it will become the third-largest gaming company in the world, behind only Tencent and Sony.
Beyond gaming, Microsoft expects the acquisition of Activision to help it better compete with Facebook when it comes to the metaverse. With the purchase, Microsoft can allow players to access games on their phones, consoles, computers and eventually, in the the virtual world of the metaverse.
On an episode of Kara Swisher’s “Sway,” Phil Spencer, vice president of gaming at Microsoft, claimed that the virtual worlds already being created by games like Halo and Minecraft, which has things like avatars and online economies, offer lessons for the metaverse.
“I see [the metaverse] as an extension of what gaming has been doing,” he said. “As we look at the workplace going online […] we look at these virtual spaces and some of the things that we’ve learned in video games of people coming together to cooperate together to achieve tasks.”
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