Microsoft wants to be the Disney of video games, the metaverse

When Walt Disney (SAY) – Get The Walt Disney Company Report bought Pixar, no one – perhaps not even then-CEO Bog Iger – knew that the Mouse House had a plan to lock down a massive amount of high-profile intellectual property (IP). He bought Pixar because Disney distributed the animation company’s films and knew the value of owning the studio.

This strategy worked and later led to Iger feeling confident about buying LucasFilm (Star Wars) and Marvel. Microsoft (MSFT) – Get the Microsoft Corporation report was perhaps more planned in its approach by bringing together 23 game studios that produce everything from “”Minecraft” to “Gears of War”, “Fallout” and more.

Now Microsoft has a deal to buy video game company Activision Blizzard (ATVI) – Get the Activision Blizzard, Inc. report., creators of popular titles “Warcraft”, “Diablo”, “Overwatch”, “Call of Duty” and the addictive mobile phone game “Candy Crush”.

If all goes according to plan, the deal, the biggest acquisition ever for the Redmond-based company, will see Microsoft buy the company in an all-cash deal worth $68.7 billion. dollars. The transaction is expected to close within the next 18 months.

Why did Microsoft buy Activision?

Activision Blizzard has been a leader in the video game industry since 2008 when Activision Publishing merged with Vivendi Games, and even before that Activision was a trusted name for avid gamers, having introduced popular titles and innovators such as Tony Hawk’s, “Call of Duty”, “Guitar Hero” and the “Tony Hawk” skateboard franchise. Currently, the company has studios around the world with nearly 10,000 employees.

Ever since the first Nintendo Entertainment System arrived on American shores in 1985, the media has sometimes dismissed video games as a cultural afterthought or a fringe pastime, but that’s not really the case.

Just in case you’re not a gamer personally and don’t talk to your teenage nephew very often, it should be pointed out that video games are absolutely one of the driving forces of popular culture. More than two-thirds of Americans, or 227 million people, play games, a number that has seen a sharp increase during the COVID-19 pandemic.USA today reported. Today, the $200 billion gaming industry is the largest and fastest growing form of entertainment.

Just as Disney set out to quietly acquire some of entertainment’s most valuable intellectual properties (including Marvel, Pixar, and the Star Wars franchise) on its way to becoming the biggest name in popular culture, if this deal goes through, Microsoft will become the third largest video game manufacturer in the world.

Like Disney, Microsoft recently embarked on a shopping spree; Last year it acquired ZeniMax Media, the parent company of game developer Bethesda, for $7.5 billion, with plans to create popular “Fallout” and “Doom” game franchises exclusive to Xbox and PC consoles.

For people who work in offices, Microsoft is primarily associated with Windows and Office productivity software, but this purchase signals a desire on the company’s part to increase the stature of its Xbox console, which has long been stuck in competition with the Sony Playstation. (END) – Get the report from Sony Corp. and Nintendo’s various iterations for market dominance.

Microsoft has plans to integrate Activision Blizzard games into its $15-a-month Game Pass Ultimate subscription service, which has more than 25 million subscribers. Microsoft also plans to deliver Activision’s games through mobile devices, PC platforms such as tablets and cloud gaming, although the company has not yet announced whether Activision’s titles will become exclusive to Xbox and other Microsoft products such as its Microsoft Surface tablet or not.

The company has said it will make some exclusive games for Xbox, but does that mean Microsoft will want to keep the profits by allowing Sony (END) – Get the report from Sony Corp. PlayStation users to buy Activision games, or is it worth cutting sales to expand its Game Pass service? At this time, it’s unclear in which direction Microsoft is leaning.

But owning the underlying developers gives Microsoft the freedom to retain the most popular titles from competing platforms, such as the PlayStation.

“I will just say to gamers who play Activision Blizzard games on Sony’s platform: We have no intention of taking communities away from this platform and we have remained committed to it,” said Phil Spencer. , CEO of Microsoft Gaming. said in an interview with Bloomberg.

As more and more people become aware of the world of virtual reality, the metaverse, there is a growing feeling that the public is not exactly sure what it all means to them, such as the idea advanced by Facebook (Meta) (MVRS) – Get meta report founder Mark Zuckerberg, which people might want to attend virtual reality office meetings aroused widespread skepticism.

But video games are a much different story, because playing an immersive game with a few friends is something that would make people strap on a VR headset. Games are a clear way for businesses to monetize the metaverse, as gaming platforms Robotex and NFT online Axie Infinity company are already developing games for the metaverse.

Microsoft CEO Satya Nadella said in a press release that the game “will play a key role in the development of metaverse platforms”, although exactly what that means is unclear at this time.

“The metaverse as we think it will be a set of communities anchored by franchises that we start with, whether it’s Call of Duty or World of Warcraft or Candy Crush, those franchises that have hundreds of millions of players are going to be the basis of what we think is a vast virtual world,” Microsoft Gaming CEO Phil Spencer said in an interview with CNBC.

And to add: “we will now be able to integrate the idea of ​​audio and video while you play games and sharing your experiences can be the start of what will eventually be created crater economies like Minecraft , where we can create content that can both be marketed or shared.”

Microsoft hopes to reposition itself for a younger audience, as the Metaverse is seen as a dominated world filled with new gaming opportunities

Regulators could stop Microsoft from buying Activision

This sale is conditional on the approval of the Federal Trade Commission, which is far from a done deal. Regulators are closely considering breaking up giant tech companies with antitrust lawsuits as lawmakers grow concerned the companies are gaining too much influence and creating monopolies in an effort to crush competition.

“Amazon, Apple, Facebook, and Google face very real threats to their massive power over our daily lives from all sides: lawsuits, federal and state legislation, international action, and an increasingly distrustful and eager public. to know more. regulation and enforcement, Voice reported.

It’s possible the government will decide that Microsoft shouldn’t be allowed to buy Activision.

That’s not the only cloud hanging over Activision Blizzard lately. Bobby Kotick, CEO of Activision was under fire for failing to inform the company’s board of directors of the sexual assault of a woman by her male supervisor.

Employees accused Kotick of ignoring or fostering a toxic work environment where sexual harassment was rampant. Last September, the American organization Equal Employment Opportunity “accused the company of violating the civil rights of employees, subjecting them to sexual harassment, discrimination related to pregnancy and retaliation. Activision Blizzard quickly settled with the EEOC for $18 million,” CNET reports.

The Wall Street Journal reported Tuesday that Kotick is expected to leave after the deal closes, but Microsoft said he will stay in his job and report to Spencer. It’s worth pointing out that Microsoft is a company with its own harassment issues.

After the fallout from a Microsoft board committee investigation into sexual harassment allegations against co-founder Bill Gates and a shareholder resolution, the company recently announced that “it has finally decided to review its practices of sexual harassment and discrimination, including any investigations of sexual harassment in recent years against its directors and senior executives.

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