Microsoft Making Plays Towards the Metaverse?

Microsoft’s pending acquisition of Activision Blizzard gaming could have some interesting Metaverse implications. Here’s our take on the reasoning behind why they’re in the process of buying it.

Microsoft is one of the kings of technology and owns both pioneering computer tech and the Xbox gaming console. Activision Blizzard is a titan in the gaming world and owns several popular games including Warcraft (a PC based role-playing game) and the Call of Duty lineup (a very popular first person shooter on both Xbox and Playstation). It’s not hard to see why they might come together. The context under which they’re merging, however, raises some interesting possibilities and points to deeper implications beyond simply the consolidation of gaming developers. These heavy hitters joining forces now could have various motivations. Let’s dive into a few.

First of all it’s important to note that the culture at Activision is less than peachy. In fact, it’s been a known fact that the culture there has a reputation for discrimination and harassment. While it’s been common knowledge, it’s taken a long time for there to be material consequences for the company.

According to this article from The Verge, “Lego seems to be the first gaming-adjacent company to take direct action,” due to the fact that they’ve delayed the release of a much awaited game. This is a negative indicator for the business as a whole and one that points to an escalation of consequences. Several companies (including Microsoft) announced displeasure with the treatment of employees at Activision, but delaying a game release is a serious, tangible response from Lego with direct financial implications.

This leads us to another significant detail of this proposed Microsoft-Activision acquisition.

This is a BIG DEAL

Like, a record-setting REALLY big deal. If the pending deal goes through (it’s expected to take anywhere from 12-18 months), Microsoft will be buying Activision for 68.7 billion dollars. That’s the biggest gaming deal in history by a long shot. The next closest price for a gaming company purchase is 12.7 billion dollars (source).

Alright, so what? Why is this interesting? Well, given the fact that Activision is in hot water, one would expect for Microsoft to be leveraging that to try to get a cheaper deal. Instead, they seem to be offering to clean up Activision’s harassment lawsuit mess and paying a pretty penny for the chance to do so. It doesn’t quite add up, unless the context of Web 3 is recognized as the backdrop for this historic move.

Bingo. A company like Microsoft might seek to consolidate its advantage in the game development and distribution space, but why at such a steep cost, especially with the hot water Activision finds itself in? Because Microsoft is more concerned with the future of the Metaverse and is more interested in solidifying its advantage there than in the temporary issues of the present.

Defining the Metaverse

The world is searching for the definition of the Metaverse. Some seek a single, centralized authority (think Meta’s [Facebook’s] version), while others view “THE Metaverse” as an interconnected network of virtual worlds. In this quote from Business Insider, Microsoft’s CEO Satya Nadella summed up their view nicely:

“We need to support many metaverse platforms as well as a robust ecosystem of content, commerce and applications.” – Nadella on a Microsoft investor conference call.

With this purchase Microsoft shows an impressive forward-thinking technological perspective, realizing that gaming companies, while part of one of the most profitable and fastest growing industries, also hold the keys to technology that will be pivotal in the Metaverse. The on-going competition to define what will ultimately become the default understanding of the Metaverse is fierce, and Microsoft is making big plays to have an authoritative voice on what that definition becomes.

Who do you think is leading the way in the development of the Metaverse?

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