Microsoft, the tech giant behind Windows, Xbox and Azure, has finally completed its biggest acquisition ever: Activision Blizzard, the gaming powerhouse behind Call of Duty, Warcraft and Candy Crush.
The deal, which was announced in January 2022 and valued at $68.7 billion, was cleared by regulators in the US, UK and Europe after nearly two years of scrutiny. Microsoft now owns some of the most popular and profitable gaming franchises in the world and has become the third-largest gaming company by revenue, behind Tencent and Sony.
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What Was Microsoft’s Motivation for Buying Activision Blizzard?
The primary drivers for Microsoft’s acquisition of Activision Blizzard were to expand its gaming portfolio across mobile, PC, console, and cloud platforms as well as to establish the foundation for the metaverse. As the most popular and rapidly expanding form of entertainment, three billion people play games regularly worldwide.
Microsoft envisions gaming as playing a crucial part in the creation of immersive virtual worlds called metaverse platforms where users may connect, network, and create. With its Xbox gaming platform, Game Pass subscription service, and Xbox Game Studios, which includes Bethesda, Mojang, and Rare, Microsoft already had a significant foothold in the gaming industry.
But by including Activision Blizzard in its portfolio, Microsoft obtains access to more than 400 million active gamers each month across 190 nations, as well as a wide variety of genres, from first-person shooters to role-playing games to casual puzzles.
Microsoft also acquires global eSports activities through Major League Gaming, and cloud gaming assets that were spun off to Ubisoft as part of the concessions made with the UK’s Competition and Markets Authority (CMA).
Microsoft completes the Activision Blizzard acquisition, and Call of Duty is now part of Xbox. After 20 months of regulatory battles, Microsoft’s giant $68.7 billion gaming deal is complete:
BREAKING: Microsoft completes Activision Blizzard acquisition, Call of Duty is now part of Xbox. After 20 months of regulatory battles, Microsoft’s giant $68.7 billion gaming deal is complete. Full details here 👉 https://t.co/iIqmWK5JVD pic.twitter.com/AR5tZ9g22o
— Tom Warren (@tomwarren) October 13, 2023
How Will This Affect the Availability of Activision Blizzard Games on Other Platforms?
Activision Blizzard games like Call of Duty and Overwatch will still be accessible on PlayStation and Nintendo Switch for the time being thanks to Microsoft’s assurance that it will uphold its contractual responsibilities for those titles on other platforms.
Microsoft has also made hints that some of these titles will eventually be Xbox and PC-only, which may lessen competition and choice for gamers who favour other platforms.
But Microsoft has also vowed to add additional Activision Blizzard titles to its Game Pass program, which charges a monthly fee for access to hundreds of games. Millions of gamers who utilize Xbox, PCs, or mobile devices may find that gaming is now more affordable and accessible.
Microsoft has also pledged to invest in the creative teams and franchises of Activision Blizzard and to make gaming safe, inclusive and accessible to all. This could mean more innovation, diversity and quality in the gaming industry.
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What Are the Challenges That Microsoft Faces After Acquiring Activision Blizzard?
Microsoft’s acquisition of Activision Blizzard is not without risks and challenges. The deal comes at a time when Activision Blizzard is facing multiple lawsuits and investigations over allegations of s*xual harassment, discrimination and toxic work culture.
Microsoft has said that it will work with Activision Blizzard to ensure a safe and respectful workplace for all employees, but it remains to be seen how it will address the deep-rooted issues that have plagued the company for years.
Another challenge for Microsoft is how to integrate Activision Blizzard into its existing gaming ecosystem without alienating its loyal fan base. Microsoft will have to balance the need to leverage its own technology, distribution and access to talent with the need to preserve the identity and autonomy of Activision Blizzard’s studios and franchises.
Microsoft will also have to deal with the regulatory pressures and competitive threats from other gaming giants like Tencent, Sony and Nintendo.
Conclusion
Microsoft’s acquisition of Activision Blizzard is a landmark deal that reshapes the gaming landscape. It gives Microsoft a huge advantage in terms of content, community and cloud, and positions it as a leader in the metaverse space.
It also creates opportunities for gamers to enjoy more games across more devices. However, it also poses challenges for Microsoft in terms of culture, integration and competition. It will be interesting to see how Microsoft manages its new gaming empire in the coming years.