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?


Entering the Metaverse 

Once a fringe notion favored by tech geeks, the Metaverse which puts forward a vision of a centralized virtual realm, a “place” parallel to the actual world, has exploded into the popular scene this year, as shown by Facebook’s October rebranding as Meta. Hybrid workplaces, video-based schooling, and online social groups are just a few examples of how we devote more and more time in digital spaces, for better or ill. You may shed your physical body and transform into an avatar who lives a pixel-created existence of your choice in the Metaverse. 

Meta… what?

Let’s clear up the air by clarifying the most evident aspect – what exactly is the Metaverse? While it sounds like a dystopian promise, the phrase “Metaverse” is a mashup of the prefix “meta” (meaning beyond) and “universe”. It is often referred to as the concept of a future iteration of the internet composed of permanent, shared, three-dimensional virtual places connected into a perceived virtual world. 

Well, what is meant to happen in this Metaverse, and how does it work? People live in it in the form of avatars, and they essentially do the same things they would do in real life, but in virtual reality: socialize, attend events, shopping, and work. Whether in virtual reality (VR), augmented reality (AR), or just on a screen, the Metaverse holds the potential of allowing a larger overlap between our digital and physical lives in terms of wealth, socializing, productivity, commerce, and entertainment.

How it all started…

People have been attempting to construct immersive virtual worlds since the 1960s, a goal fueled by the world-building endeavors of both the film and video game industries. Second Life, an alt-reality video game where you interact via an avatar and may do anything and everything — such as buy a home or get married — is one of the most often mentioned instances of the Metaverse. It was founded in 2003 and is one of the most popular examples of the early Metaverse. It was such a realistic world that it had a booming kink culture — it doesn’t get much more realistic. 

Neal Stephenson has coined the word “Metaverse” in his 1992 book Snow Crash, which alluded to a 3D virtual environment populated by avatars of actual people. Many other science fiction works feature Metaverse-like systems (some of them predating Snow Crash). However, Stephenson’s book, along with Ernest Cline’s 2011 novel Ready Player One, continues to be one of the most popular sources of information among Metaverse aficionados.

Examples from the Metaverse 

Today, Roblox and Epic Games’ Fortnite are often mentioned as the primary Metaverse examples, and some believe that they are far closer to bringing the Metaverse to life than Zuckerberg’s Meta. Both games fit the requirements for enduring digital environments, as they both have millions of users that congregate to play and socialize, where there is some permanence in things (clothes and skins), and where there is some money (Robux and V-Bucks).

What does the future hold for the Metaverse?

Consumers will flock to the Metaverse for gaming and entertainment. At the same time, companies will likely experiment with virtual reality meetings to improve cooperation and push training to the next level with completely simulated surroundings. The Metaverse, which has long been considered a future fantasy, is swiftly becoming a reality. 

The influence of the Metaverse on present and future businesses will be immense. New firms, goods, and services will develop to handle everything in the new integrated virtual-physical world, including online gaming and virtual banking, securities, fashion, and other aspects of daily life.

Some may call it the successor of the internet, but the Metaverse might be much more than that… Imagine that it is the year 2057. Using a virtual reality headset, you’ve just returned from a concert on the moon where a robotic Lady Gaga was performing with a robot version of yourselves. Unfortunately, you found it terrible. Technology, it seems, can’t solve everything.