The sum is staggering: Microsoft wants almost 70 billion dollars (around 62 billion euros) for the video game company Activision Blizzard pay. As a reminder, ten years ago Disney bought all the rights to the “Star Wars” films, series and further exploitations for around four billion dollars. However, the insane sum hides a culture break that will not only change the gaming world, but also the entertainment industry and plans for the so-called Metaverses. So for those self-contained digital spaces that can be reached with the help of VR glasses.
Activision and Blizzard were two very different video game companies until their merger in 2008. Activision prevailed with sports games such as the popular skateboard series “Tony Hawk” and was later particularly successful with video game adaptations of well-known films such as “James Bond”, “Star Trek” or “Shrek” and war games. Above all, the shooting games of the “Call of Duty” series brought sales figures in the double-digit million range.
On the other hand, since the mid-nineties, Blizzard has pursued the strategy of developing its own brands and preferring to publish fewer but high-quality games. The best known games were strategy games like “Warcraft” and “Starcraft” which are still played today, albeit with improved graphics. In 2005, the online role-playing game was released “World of Warcraft” (WoW), a game world where you could experience adventures together with other users. This not only redefined the computer game genre, but also made the idea of something like a metaverse known, i.e. a virtual world in which people can meet and exchange ideas. 17 years later, the game still has almost five million paying subscribers.
Activision Blizzard also owns the King company, which developed the “Candy Crush” puzzle game. You have to arrange lollipops and candies in patterns. Especially as a mobile game, the puzzle spread enormously. The download numbers of these game apps are in the billions, at times it was “Candy Crush” the most downloaded app ever. This brand would then also belong to Microsoft.
What makes Blizzard Activision so attractive for Microsoft is not only these brands, but also the experiences of these companies. With King, Microsoft is buying an absolute professional for mobile games. And Blizzard not only perfected the idea of the Metaverse, but also networked its various games on its own Battlenet platform.
The gaming industry earned around 180 billion dollars in 2021. The film industry only 21 billion
But the deal isn’t just a win from Microsoft’s perspective. With the new business models of the Metaverse, Apple and Google are also pushing into the game console market, which was previously dominated by Microsoft (X-Box), Sony (Playstation) and Nintendo (Switch and Wii). However, Google and Apple in particular have completely different options than a game manufacturer when it comes to digital platforms and the use of artificial intelligence. With Microsoft behind it, Activision Blizzard would be in a much better position to compete with the tech giants.
Whether Microsoft really wants to open the door to the so-called Metaverse with the deal; it’s hard to say whether we’ll all soon be sitting with bulky glasses on our heads and meeting in virtual conference rooms. The group is silent on this. There is still no conclusive definition of the metaverse, there is still a lack of technology. Some experts consider the whole thing to be a kind of marketing gimmick, a buzzword that everyone is jumping on right now. Especially the investors.
Blizzard was already working on an expansion of the Metaverse idea in 2007, after the success of “World of Warcraft”, but nothing ever came of it. The game should be called “Titan” and be a simulated science fiction world in which the players would have had an everyday life, but could also have played a whole series of smaller games that should be integrated into the big experience. Blizzard discontinued the project in 2014. The developments eventually became the excellent but conventional action game “Overwatch” and the digital trading card game “Hearthstone”.
What Microsoft will probably do very soon with the purchase of Activision Blizzard is to massively expand its subscription model for games. The so-called Game Pass, a kind of Netflix for computer games, is already available via the Xbox. With the brands that Microsoft has acquired with the deal, it should be clear that this service will be one of the absolute top offers in the future. Because Activision Blizzard was not the only acquisition. Last year, Microsoft took over the Zenimax group for $7.5 billion. Zenimax includes the studios Bethesda and id, the latter are for the game series “doom” known. Bethesda, in turn, develops role-playing games and digital worlds that can already be explored with VR glasses. A point that could speak for the Metaverse.
The accumulation of brands is probably more important here, too, because Bethesda has the titles “Fallout” and “The Elder Scrolls” in its program, which are still selling millions even years after their release. With such a portfolio for its Game Pass, Microsoft would have beaten Google, Apple, and Sony, which offer similar services, before the game streaming service competition even really got started.
Whether all this takes place in the Metaverse or not is still a minor matter. It’s about a market. The gaming industry earned around 180 billion dollars in 2021. In the same year, the film industry’s worldwide revenues amounted to around 21 billion. Incidentally, Blizzard gave the reason why a metaverse isn’t that important back in 2014 when they discontinued “Titan”: It just wasn’t fun.