Some dissatisfied Atari workers decided to form their firm in
1979. Activision pioneered the concept of "third-party" game production
by creating and releasing games on behalf of other firms.
Since then, Activision Blizzard, the firm that is now Activision
Blizzard, has been acquired by Microsoft for a whopping US $68.7 billion
(about a $95.6 billion), making it the most outstanding transaction in gaming
Microsoft's acquisition of Call of Duty, Diablo, Starcraft, Candy
Crush, and World of Warcraft is also a massive deal regarding the gaming brands
it currently controls. What does the sale of these brands' assets signify for
Why Microsoft Purchased A
Billion Dollar "Activision"?
The video game business has seen several high-dollar
acquisitions in the past. As a result of the merger of Activision and Blizzard
in 2008, Activision Blizzard became one of the biggest video gaming businesses.
For Microsoft and Sony, buying successful pre-existing development
companies is typical for acquiring their intellectual property (IP).
In contrast, Microsoft has taken a more confrontational stance. As
of 2014, it has acquired Minecraft creator Mojang for US $2.5 billion and
ZeniMax, the publisher of the Elder Scrolls series, for a reported US $7.5
billion. Microsoft has surpassed Tencent and Sony as the industry's
third-largest firm after it purchased Activision Blizzard.
This is in line with Microsoft's popular video games industry
model, which focuses more on expanding subscriptions to its Game Pass program
than on selling game titles. Subscribers to Game Pass pay a monthly fee for
unlimited access to a vast digital library of games.
Microsoft announced the takeover of Activision Blizzard in a press
release announcing the 25 millionth user of Game Pass. That works out to around
US $400 million (or a $556 million) in monthly income for each customer who pays
US $16 a month.
Xbox Game Pass will be able to provide a far more comprehensive
choice of titles, thanks to Microsoft's acquisition of Activision Blizzard.
Gaming Industry Giants
By making these brands exclusive to Game Pass, Microsoft might
drive players away from competing systems like the PlayStation 4 or
distribution networks like the Steam platform. In other words, it has the
unending potential to entice customers into its own private space.
This has become a standard approach. Because of subscription-based
digital platforms, we've transitioned from product owners to renting them.
Individual video games are no different in this regard as well.
It's no more a case of buying a game once and being done with it; instead,
titles like Call of Duty, Hearthstone, and Fortnite (to name just a few) have
their economies in which players are incentivized to spend money on battle
passes, cosmetics, and new content.
It's a win-win situation for gamers and the firms who control
By purchasing Activision Blizzard, Microsoft has essentially
acquired a city with existing tenants in the player communities of Call of
Duty, Hearthstone, World of Warcraft, and many more games.
Blizzard games like Hearthstone and World of Warcraft have
millions of players already engaged in their closed systems, including many in
the difficult-to-break Chinese market. These gamers may be exploited for
personal information and rented out to other parties.
How do Game Players and
Game Developers Take This Acquisition?
Though Microsoft may preserve more of its freshly acquired
properties for its platforms in the future, Players on PC will have to switch
from Steam to Microsoft Game Store to play these games, which is an annoyance
but not a significant adjustment.
Players of PlayStation and Mac may find themselves forced to buy
PCs or Xboxes in the future if they don't want to miss out on future games in
Some fear the continuing consolidation of large corporations may
stifle the video game industry's originality and innovation. Most of the
industry's income is produced by a small number of conservative enterprises;
thus, this is unlikely to happen.
- According to Aphra Kerr's
book Global Games, the top 10 video game firms generated 49% of the
industry's total revenue in 2015. Despite this concentration of wealth,
new genres are nearly invariably created by smaller, more autonomous
entities with significantly fewer resources than the centers of power.
- More powerful gaming
engines like Unity and Unreal and wider audiences available via digital markets like Steam and Xbox
Game Pass have contributed significantly to the emergence of new and
varied genres during the last decade.
- The scenario is far from
ideal, but the video game industry's most influential and inventive firms
have seldom been the same. It is doubtful that the most recent purchase
will limit inventiveness.
- However, the stakes in
this historic transaction go well beyond the money involved. Activision
Blizzard's CEO, Bobby Kotick, has been under heavy pressure to leave for
months because of claims and lawsuits of harassment, abuse, and sexism in
the company's workplaces. Microsoft must address the charges of a
hazardous environment, as Kotick is ready to leave the business with
US $400 million.
- The recent transaction has
likely highlighted the most critical issue. It is not which hardware would
have access to which games but whether Microsoft will assume
accountability for bettering the working environment for game creators.
We'll have to see what happens.
What Is The Future Of
Activision With Microsoft?
Gaming is presently the world's most popular and fastest-growing
type of entertainment, with more than three billion individuals playing games
anytime. Microsoft Corp. has acquired one of the world's most prominent game
developers, Activision Blizzard Inc. (ATVI) (NYSE: MSFT). This purchase for
Microsoft's game company will give the building pieces for the metaverse as it
accelerates expansion across mobile, PC, console, and cloud.
A total of $68.7 billion in cash, including Activision Blizzard's
net cash, will be paid for Activision Blizzard by Microsoft at a price per
share of $95.00. When the deal is complete, Microsoft will become the world's
third-largest gaming firm by revenue, behind only Tencent and Sony in sales.
"Warcraft," "Diablo," "Overwatch," "Call of Duty," and "Candy
Crush" are just a few of the legendary properties that Activision, Blizzard,
and King studios want to acquire. Nearly 10,000 people work in studios all over
the globe. We can hope that Microsoft will continue to bring amazing games for
users in the future.