The largest merger and acquisition in the history of the game has been blocked, why does Microsoft focus on this field
Microsoft’s “acquisition of the century” rejected
Recently, the British Competition and Markets Authority (CMA) rejected Microsoft’s acquisition of the gaming company Activision Blizzard on the grounds that the completion of the transaction would damage competition in the cloud gaming field.
In the specific ruling report, the CMA stated that Microsoft’s offering of Activision Blizzard games on Xbox Game Pass, its own game subscription service, may be beneficial to some customers, but it cannot offset the damage to competition caused by the merger, especially considering that Microsoft, after the merger, There may be an increase in GamePass subscription fees due to the addition of high-value Activision Blizzard titles. Moreover, since Microsoft currently occupies the vast majority of the global cloud game market, CMA is worried that after the acquisition of Blizzard, Microsoft will use the latter’s IP influence to further expand its monopoly on the global cloud game market.
In this regard, Microsoft President Brad Smith (Brad Smith) said that the CMA’s decision abandoned the pragmatic approach to solving the problem of market competition and hindered technological innovation and investment in the UK.
”We have already signed agreements to make Activision Blizzard’s popular games available on more than 150 million devices. We remain committed to strengthening these agreements through remedial measures.” Brad Smith emphasized, “We are particularly disappointed that in After lengthy deliberations, this decision appears to reflect a misunderstanding by the CMA about the market for cloud technology and how the technology works.”
A bumpy road to mergers and acquisitions
On January 18, 2022, Microsoft announced that it will spend US$69 billion to acquire Activision Blizzard, a video game company and the developer of the “Call of Duty” series, and use this to compete with Tencent and Sony in the game field. However, today, the largest acquisition in the history of global technology can be described as twists and turns.
Prior to the UK veto, the US Federal Trade Commission (FTC) had previously launched an antitrust lawsuit against the deal. On December 8 last year, the US Federal Trade Commission (FTC) sued to block Microsoft’s $69 billion acquisition of video game publisher Activision Blizzard. “Today, we sought to prevent Microsoft from gaining control of a leading independent game studio and using it to the detriment of multiple dynamic and fast-growing Competition in the growing gaming market.”
In addition to the attitude of regulators, people familiar with the matter revealed that Google and Nvidia have expressed concerns to the US Federal Trade Commission (FTC) about Microsoft’s attempt to acquire Activision Blizzard. The case adds more positives.
According to foreign media reports, information provided by Google and Nvidia supports a key argument of the US Federal Trade Commission that Microsoft may gain an unfair advantage in the cloud computing, user subscription and mobile gaming markets after acquiring Activision Blizzard. Previously, Sony was the first to show its cards, expressing doubts about the deal, and now Google and Nvidia have apparently joined the ranks of Sony.
Microsoft’s Conquest of the Metaverse
In the face of opposition and doubts from many parties, Microsoft has always insisted on mergers and acquisitions. In order to dispel market doubts, Microsoft recently signed a 10-year agreement with Nintendo, Nvidia, British telecommunications company EE, Ukrainian cloud gaming platform Boosteroid, and Japanese cloud gaming company Ubitus.
In these 10-year contracts, Microsoft stated that “if the acquisition of Activision Blizzard can be completed, PC games developed by Activision Blizzard and Xbox will be brought to users of various platforms in the form of cloud games, including “Mission “Call of Duty”, “Overwatch”, “Halo” and other series of games.”
In addition to locking in partnerships with long-term orders, Microsoft told regulators and the outside world that 10 years is enough for Sony to develop games that can compete with the “Call of Duty” series. Although the specific details of these ten-year agreements have not been disclosed, Microsoft has continuously thrown out ten-year contracts that are accepted by many platforms and companies, which will obviously give up some benefits, and this is nothing more than to win Blizzard as soon as possible.
For Microsoft, the acquisition of Activision Blizzard is not essentially aimed at adding content to the current Xbox console, but to prepare for the upcoming new round of next-generation game platforms (perhaps the metaverse platform carrier).
Before the Activision Blizzard acquisition, Microsoft spent $7.5 billion last year to acquire Zenimax and MojangStudios. The former is the parent company of the well-known game company Bethesda, while the latter developed the sandbox game “Minecraft” that is popular all over the world. Microsoft currently has 23 game development studios around the world, plus Activision Blizzard’s 17 game studios, Microsoft’s game studios will rise to 40.
This series of mergers and acquisitions on the content side will undoubtedly accelerate the growth of Microsoft’s game business in the mobile, PC, game console and cloud fields, and will provide the foundation for building the metaverse. Satya Nadella, chairman and CEO of Microsoft, also said, “Games are the most dynamic and exciting category of all entertainment projects today, and will play a key role in the development of the metaverse platform.”
From the current point of view, Microsoft’s subscription game service GamePass has 25 million users, and Activision’s “Candy Crush Saga” and other games have about 400 million monthly users. If the acquisition is successful, the combined game network community will cover hundreds of millions of people. . In addition to the large number of users after the merger, the core technology in the game is also of great help to Microsoft’s exploration of the metaverse. Many technologies supporting the Metaverse, including hardware and software, come directly from the game world, such as Activision Blizzard’s “World of Warcraft”, which can be regarded as the most complex and oldest virtual role-playing game in history. After the acquisition, Microsoft can use it to promote virtual goods for the first time.
Scenes and content are the most perceptive in the Metaverse industry chain, and games, as simulations and extensions of the real world, can become the best scene entrances to the Metaverse. With Activision Blizzard in its pocket, what is rich is Microsoft’s coupling ability in art, technology and culture. Activision Blizzard, with its ability to create high-quality content, can help players shape the metaverse they yearn for, and can also become Microsoft’s sharp weapon for competing for the right to speak in the metaverse!