Microsoft’s Metaverse Play Adds Historic $68.7B Gaming Acquisition – WWD

Microsoft just pressed the accelerator on the way to reverse.

The Redmond, based on Wash. Technology behemoth revealed plans to acquire game company Activision Blizzard on Tuesday for $68.7 billion, marking the largest game acquisition in history.

Now, Activision games like World of Warcraft, Call of Duty, Tony Hawk’s “Pro Skater,” Candy Crush, Crash Bandicoot and more will join Minecraft and others on the company’s vehicles. With titles on every device, the company sees the add-on as a “building block for reverse, “According to the announcement.

This purchase is far ahead of its other notable game purchases, like Minecraft, which entered the market after Microsoft acquired developer Mojang for $2.5 billion in 2014. It also eclipsed the $26 billion paid to professional networking site LinkedIn in 2016.

The absolute dollar figure indicates the company’s preference for the game, specifically, and its role in the metaverse, more broadly. Even Activision’s recent sexual misconduct scandals, which sparked employee protests and ousted last year, can’t seem to get the deal to go astray.

The bet is too high. Microsoft believes that gaming “will play an important role in the development of metaverse platforms,” ​​Satya Nadella, Microsoft’s president and chief executive officer, said in a statement. The tech sector seems to agree.

As a virtual reality version of the internet, the metaverse has captivated both Silicon Valley and Madison Avenue, and gaming and work have become the two main avenues to get there. Microsoft has dominated one side of the equation. Now it is reinforcing the other.

As a maker of Windows PC software, it owns the world of work computing, with over 85% market share for desktops, while its cloud division ranks as one of three The leading cloud in the market.

Last year, they also introduced Microsoft Mesh, a mixed reality platform based on the 2017 acquisition of Altspace VR to bring a sense of presence to Teams, through virtual communication and collaboration. The company also makes hologram-oriented HoloLens headsets, primarily intended for developers and corporate customers, and Xbox consoles powered by its own gaming-focused platform. All these attempts could be dots waiting to be connected.

The latest deal won’t do that on its own, but the discounted price points to the company’s priority over the metaverse. In the race to get there, Microsoft has been seen as the top competitor for Facebook’s Meta. Now an expansion like this can increase competition.

Fashion too, have in mind the game. Recently, their interest in virtual platforms, seen through years of experimentation and partnerships, has deepened as brands explore metaverse strategies. Whether Microsoft’s cash-based Activision titles will provide some kind of bridge to the internet in this future remains to be seen. Even if it happens, fashion houses will have to take into account the developer’s past. But companies often go through cultural, structural, and business changes under new ownership, so the next few stages can be crucial.

Of course, it might not matter if the regulators don’t approve the acquisition. After all, it took a year for the European Union to approve Google’s $2.1 billion purchase of Fitbit, and when the Wear OS maker ended its contract shortly after, in January 2021, it did. do so without the approval of the Department of Justice.

However, Big Tech acquisitions seem especially rife at the moment. Officials have worried about monopoly concerns for years, but the pieces are now moving into positions to repress. In November, President Joe Biden signed a sweeping executive order targeting anticompetitive tactics in the US Technology and other areas, with 72 recommendations for dozens of federal agencies.

Last week, a federal judge just reinstated an anticompetitive lawsuit brought by the Federal Trade Commission against Facebook over its purchases of Instagram and WhatsApp. The lawsuit may have forced the company to remove the apps last summer, but it was rejected because it was too vague. Now a modified version has been deemed fit to proceed.

Facebook bought Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014, in deals that were considered major at the time. Activision’s acquisition is worth nearly $70 billion. It can have a high bar to jump in any case. But the current climate could complicate Microsoft’s journey to the supermarket.