Microsoft created a surprise by announcing the takeover of Activision Blizzard, one of the main video game publishers. Objective: to redefine the rules of the market and uses by developing its famous Game Pass service.
The news had the effect of an earthquake. To the point of being taken up by the media of all kinds around the world, from The New York Times at Nikkei Asia, Passing by Le Figaro, CNN, The world, The Wall Street Journal, France Inter or The Parisian to name just a handful. On Tuesday January 18, 2022, Microsoft announced in an official press release its intention to acquire Activision Blizzard, one of the main video game players, which publishes flagship titles such as Call of Duty, Candy Crush, Tony Hawk’s, Warcraft, World of Warcraft, StarCraft, Guitar Hero and other Overwatch. Beyond the staggering amount of this operation – 68.7 billion dollars, or approximately 61 billion euros – which constitutes a historic record, it is the upheaval that it entails on the market and the uses that arouses the most questions and predictions. Because it is not a question of a simple “absorption” as we often see in the world of “tech”, but of a real revolution which will redefine the rules of the game in the near future by reshuffling the cards in the world of digital entertainment.
4.5 billion players in 2030 worldwide
Thus, to take the measure of the event, it is necessary to know that there are currently nearly 3 billion players – all categories combined – in the world. A population that will climb to some 4.5 billion in 2030 according to Microsoft forecasts. On a purely financial level, the video game market represents around 200 billion dollars today. And given its continual growth, the strongest of the “cultural industry”, cinema included, it is easy to imagine that it could reach 300 billion dollars in a few years. That’s why many commentators call Microsoft’s takeover of Activision “the deal of the century.” And the least we can say is that there is a lot of money at stake. As expected, the major exchanges reacted strongly to the announcement the action of Activision has jumped more than 37% on Wall Street before being suspended, while that of Sony, Microsoft’s direct competitor in the field of video games, plunged 12% on the Tokyo market. That is a capitalization loss of some $20 billion.
In fact, it is a war with enormous stakes that the American and the Japanese are openly waging. And by getting its hands on Activision Blizzard, Microsoft is in third position in the very lucrative video game market, behind Tencent – the Chinese online gaming juggernaut – and Sony, and ahead of Nintendo, which, despite the success of its consoles family, does not play in the same as these giants. And this war is not just about hardware, where the PlayStation and Xbox are already clashing. It takes place above all at the level of games and associated services. Because, it is well known, Microsoft and Sony derive very little profit from the massive sales of their consoles: the real treasure lies in the immaterial, starting with the catalog of titles which remains the first criterion for players to choose a camp”. And this loot will grow even more with the new services and uses that have been developing over the past few years.
Microsoft Game Pass: everything for cloud gaming?
Certainly, for now, many PlayStation users are worried about the future of their favorite games on their console. As the leaders of Microsoft and Activision have pointed out, the current flagship titles in the catalog – the famous “AAA”, as gaming blockbusters are called… – will remain available on PS4 and PS5 – why deprive yourself of a such manna? – at least initially. Phil Spencer, the very media boss of the Microsoft Gaming division, confirmed it again on January 20 on Twitter : Call of Duty, Activision’s major title, will remain available on PS. But if no commitment has yet been made for the continuations of the great sagas, everything suggests that Microsoft aims to move the debate to bring it to other fields than that of consoles and PCs.
For the Redmond giant, the future is in streaming games and subscription plans, which allow you to play all kinds of games, anywhere, on any device – including on a mobile phone – , the most demanding graphics calculations being carried out remotely, on servers. No more need for a “war machine”: all you need is an account with a subscription and to draw from a huge catalog to play everywhere by very easily resuming a game started. This is the whole meaning of Microsoft’s Game Pass service, which is available today on PC and console, but which promises to be extended to other devices, to offer games without hardware constraints to many new users, for a fairly reasonable subscription – it currently takes between 10 and 13 euros per month. To put it another way, it is a question of eventually offering an equivalent of Netflix for video games. All the pieces of this strategy are already in place, Microsoft having already bought other specialized companies – like Bethesda – in the field to expand its catalog and its studios.
The video game, spearhead of the metaverse
For Microsoft, the future will even be a mix of real and “virtual”, with its cohort of connected services, dematerialized products and avatars: a skilful combination of material and immaterial perfectly embodied by the metaverse concept which agitates the tech planet since Meta (ex-Facebook) made it its hobbyhorse a few weeks ago. The speech is clear: “Gaming is the fastest growing and most exciting entertainment category on any platform today and will play a key role in the development of metaverse platforms”, said Satya Nadella, the big boss of Microsoft.
All is not yet settled. The takeover procedure should indeed take many months – we are talking about a conclusion in June 2023 –, the time for the competition authorities to decide on this gigantic operation. Until then, we can imagine that the other major players in the sector, in particular Google, which furnishes Stadia, its cloud gaming platform, will not remain without reacting.