Microsoft Corporation’s acquisition of “Call of Duty” manufacturer Activision Blizzard is one of the biggest deals to hit the gaming world this year. It was announced by Microsoft on the 18th of January that the Microsoft is going to acquire Activision in a deal worth $68.7bn (£50.5bn).
This deal will turn Microsoft into the world’s third-biggest gaming company by revenue, behind China’s Tencent and Sony, marking a major shift for the industry. It also comes a year after Microsoft bought another influential gaming company, Bethesda for $7.5bn.
Microsoft is also aggressively expanding its Game Pass subscription service. The planned acquisition includes iconic franchises from Activision, Blizzard, and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming.
“We’re investing deeply in world-class content, community, and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive, and accessible to all,” said Satya Nadella, chairman and CEO, Microsoft.
In the battle for popularity with gamers, Sony’s PlayStation 5 is widely regarded as having an edge over other gaming companies including Microsoft’s fourth-generation Xbox models. But this blockbuster takeover of the troubled Activision will definitely help the US-based firm in catching up.
It is very evident that games on virtually every kind of device, from bulky consoles to smartphones, have gained even greater popularity during the pandemic and many tech companies are docking this industry to seek the attention and money of the world’s three billion gamers.
Acquiring the Activision blizzard in this situation is surely a major step. Activision itself is a major name in the gaming industry, making some of the most popular titles including Call of Duty and Candy Crush. Yet the company has been roiled in recent months by an employee revolt over accusations of sexual harassment and discrimination.
The company itself was the product of serial deal-making by Mr. Kotick over decades, rolling up smaller game studios. It took shape in its current form when Activision — then known primarily for producing titles for traditional gaming consoles acquired King, the European gaming company behind Candy Crush, to expand into mobile games. King produced $1 billion in operating profit during the latest 12-month period.
This deal represents the American multinational’s bet on the “metaverse,” virtual online worlds where people can work, play and socialize, as many of its biggest competitors are already doing.
“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” said Satya Nadella.
As a result of the deal, Microsoft positioned itself as a leading force in the emerging world of virtual reality and augmented reality, known as the Metaverse. Though so far it is just a
buzzword rather than a viable business, the metaverse has attracted enormous investment and talent. As part of its ongoing commitment, Facebook recently renamed its parent company, Meta.
Phil Spencer, the chief executive of Microsoft’s gaming business, said that whatever the metaverse may end up being, “gaming will be at the forefront of making that mainstream.” For now, he said, the acquisition is about gaining a stronghold in mobile gaming, where Microsoft barely competes, and a studio that produces hugely popular games. He called Call of Duty “one of the amazing entertainment franchises on the planet.”
Nadella although lacking much media presence has transformed the way microsoft operates. the company has seen an exponential growth underhis leadership all due to the companies bold business decisions of this manner. And now with the inclusion of activision microsoft seems to thow a tougher challenge to Sony. Let’s see how it pans out.