Explained: Microsoft’s purchase of Activision could shake up the gaming industry

Microsoft will want to offer as many Activision games as possible in its “Game Pass” subscription service. (Photo: 123RF)

Microsoft shook up the video game industry this week by announcing the acquisition of Activision Blizzard for $68.7 billion, a deal that would instantly make it a bigger video game company than Nintendo.

Microsoft, which makes the Xbox game console, said the deal will benefit gamers and further its ambitions for the metaverse, the eventual creation of immersive virtual worlds in which to play and work.

But what does that really mean for the millions of people who play video games, whether on consoles or on their phones? And will the transaction be able to materialize when governments launch one? Is he getting tougher on regroupings between giants?

So is this good news for gamers?

Experts think so, especially if Microsoft’s “games for everyone” mission and mountains of cash can save Activision, which has a reputation for shedding its most popular franchises in favor of a few specific titles.

“Microsoft wants to increase the diversity of intellectual property,” said Forrester analyst Will McKeon-White. They target anyone who wants to play video games and they want to broaden the audience.”

An obvious example of a franchise launched down the road by Activision, he said, is “Starcraft,” which hasn’t been updated since 2015. He also mentions “Guitar Hero,” the slate titles The Wheels of Tony Hawk and “MechWarrior” that , according to Mr. McKeon-White, ‘has been virtually abandoned for twenty years’.

On the other hand, the prospect of Microsoft controlling so much content, from “Call of Duty” to “Candy Crush,” has some wondering if the company could block Activision titles on rival consoles.

Microsoft will want to offer as many Activision games as possible on its “Game Pass” subscription service, including “some that are likely to become Microsoft exclusives,” Wedbush analyst Michael Pachter said.

However, he noted that antitrust regulators could bar Microsoft from blocking its games from running on Sony’s PlayStation console.

Mr. Pachter believes Activision will serve as an example for Microsoft to move from console to phone. Activision managed to turn “Call of Duty” into free-to-play mobile games and hopes the company will help Microsoft do the same with titles like “Halo.”

Will the merger materialize?

That’s the big question. Officials and adversaries could go to great lengths to oppose it.

Other tech giants like Google, Amazon, Apple and Meta (formerly Facebook) are increasingly under the microscope of antitrust regulators in the US and Europe. But the Activision acquisition is so big — potentially the most expensive technology acquisition in history — that Microsoft will also find itself under scrutiny from officials.

Microsoft’s acquisition of speech-recognition company Nuance, at a cost of 16 billion dollars, has already been delayed due to a review by the British authorities.

If the deal falls through, Microsoft will have to pay Activision up to $3 billion. This should encourage Microsoft to put water in its wine so that everything materializes, believes the vice president of the firm CFRA Research, John Freeman.

What’s happening at Activision?

Activision revealed last year that it is being investigated by the US Securities and Exchange Commission over discrimination complaints and a settlement was reached in September.

In July, the California civil rights agency sued the Santa Monica company, citing a “sisterhood” culture that had become a “breeding ground for harassment and discrimination of women.”

The PDG of Microsoft, Satya Nadellaa, mentioned to the investisseurs Mardi that “the culture of our organization is a priority” and that it is “crucial for Activision Blizzard aller de l’avant” with their engagement d’améliorer son environnement labor.


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