Microsoft-Activision Acquisition: Bang for the bucks! And it is for Microsoft. On Tuesday, the IT giant announced that it will be acquiring gaming company Activision Blizzard for $68.7 billion in an all-cash acquisition. With this announcement, Microsoft has entered the mobile gaming segment with a bang as Activision owns some of the biggest mobile games such as Call of Duty, Candy Crush, among other video games like Warcraft. While this is big news for the gaming industry, the acquisition has boosted Microsoft’s vision of the metaverse and positioned it strongly against its competitor Facebook.
The acquisition also bolsters Microsoft’s Game Pass portfolio as the company aims to launch Activision Blizzard games into Game Pass. With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, Microsoft is now the third-largest gaming company by revenue after Tencent and Sony.
The Game Play
This seems to be happy news for the Indian gaming industry as the entry of big technology corporations such as Microsoft will enable further growth in the gaming industry. For Saurabh Gupta, co-founder, Tamasha, this deal has opened up doors for game developers in India. “In the past few years, opportunities for game developers in India have been very limited. However, as these mega giants go mainstream in the gaming industry, the market for game developers will broaden and create better job opportunities in India. Moreover, as big companies enter the space, other companies will also make a beeline for the gaming industry resulting in cash flow,” he said to BrandWagon Online.
According to the Global Games Market report – a market research firm, the online gaming industry is estimated to be valued at $175 million in 2021. Of this, mobile games account for $90 billion globally. With India being one of the market leaders in the mobile gaming segment, Microsoft now has access and insights into the Indian mobile gaming market besides PC and console gaming. “Microsoft has always had a strong play in India and the bet on mobile clearly positions them to strengthen their play in India further. Until now, Microsoft was participating as a hardware provider for gaming, but now it will be able to sit on the game publishers committee,” Rajan Navani, vice chairman and managing director, JetSynthesys, said.
Furthermore, with Microsoft’s entry into the mobile gaming market, new doors for monetisation have a chance to open up. Currently, Indian mobile games primarily have in-app purchases, advertisements and platform fee as their main revenue streams but the industry stakeholders believe that the subscription model will start gaining in-roads as well. Microsoft, which has Xbox, already has a subscription model called Xbox Game Pass, might also introduce subscriptions in the mobile gaming sector as well. This is primarily because subscription revenue is freeing up a lot of content for consumers as opposed to a-la-carte. For Navani, a subscription model will emerge going forward for well-established games.
The world of Metaverse
“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” Satya Nadella, chairman and CEO, Microsoft stated on Tuesday. Microsoft is very aggressive around the metaverse and wants to compete against Facebook. For the last few years, Microsoft has been building blocks for the metaverse. From developing HoloLens to acquiring Minecraft back in 2014, and with the acquisition of Activision Blizzard, Microsoft will now be able to create a strong ecosystem of gaming metaverse.
According to Abhishek Aggarwal, co-founder and CEO, Trinity Gaming, metaverse and gaming is the immediate next step for the gaming ecosystem. In the last couple of years, people have discovered an alternate option for entertainment and one of those options has been gaming. “I am very optimistic about the gaming metaverse with this acquisition. Rather than creating a centralised metaverse, Microsoft wants to support multiple metaverse platforms to create a robust ecosystem. This will lead to a big impact on the metaverse ecosystem,” he highlighted.
Industry analysts believe that this year will be the year of the metaverse in gaming. While 2020 saw a boost in the gaming industry from GenZs and 2021 saw working professionals enter the space. 2022 will see the dawn of the metaverse age where people are not just spending more time but are also beginning to own assets in the digital world. “Microsoft now has lots of fire power to create the metaverse along with top quality content creation teams which can make it a reality,” PR Rajendran, co-founder and CEO, Next Wave Multimedia Pvt. Ltd, said.
However, some believe that this deal might not have much impact on the Indian metaverse gaming ecosystem right now. “There would not be any immediate effect in the Indian metaverse story. As hardware and technology around the metaverse gets cheaper in India and as crypto gets mass acceptance, the metaverse play will come into play. But this will take time,” Gupta opined.