A $69B bet on the metaverse? Microsoft buys Activision Blizzard

  • Microsoft has announced that it’s buying Activision, one of the world’s biggest gaming companies with franchises like Call of Duty and World of Warcraft.
  • The acquisition, once approved, will be one of Microsoft’s most significant in its quest to become a major player in the metaverse world, CEO Satya Nadella says.

Mark Zuckerberg made the first move towards making Facebook the metaverse king by renaming it Meta, and now, Microsoft is responding in kind. The software giant has announced that it’s acquiring Activision Blizzard for $69 billion, one of the biggest deals in the space and one that will give Microsoft an edge over its rivals in the metaverse arms race.

Activision is a gaming giant that’s behind some of the biggest gaming franchises in the world, including Call of Duty, World of Warcraft, Starcraft, Overwatch and Hearthstone. It’s the second-largest gaming company in the Americas and Europe after Microsoft. The acquisition will make Microsoft the third-largest gaming company globally after Sony and Tencent.

Activision Blizzard emerged in 2008 from the merger of Blizzard Entertainment and Activision. According to Microsoft’s announcement, it will acquire Activision for $95 a share in a deal valued at $68.7 billion.

The acquisition will give Microsoft an even bigger stranglehold on the gaming sector, where it already has quite a reach with its Xbox gaming consoles. According to a blog post by Phil Spencer, the CEO of Microsoft Gaming, the company will offer as many Activision games as it can on its Games Pass which already has 25 million subscribers.

However, it will do more than just give Microsoft a bigger market share in the gaming sector. It will offer it an entry into the metaverse, which from the looks of things, will initially be built around gaming.

Microsoft’s $69 billion metaverse bet, and why blockchain is the loser

Satya Nadella, who took over as CEO in 2014 from co-founder Steve Ballmer revealed the metaverse bet in his comments about the purchase.

Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.

While there has been a lot of talk about how the metaverse will revolutionize everything (Bill Gates says it will be hosting all your office meetings in three years), not much has been built yet.

There have been some futuristic metaverse moves, like this couple in India which will host its wedding reception on Polygon’s metaverse, but not much else, except in gaming.

Gaming companies have been all about enriching the virtual world even before the metaverse was a trendy thing. Facebook’s Oculus VR has been developing tech that allows its users to immerse themselves in a virtual world and interact with fellow gamers. This is the same dream that the metaverse is selling.

With this in mind, it’s easy to see why Microsoft has an edge with the Activision acquisition. Onboarding users to its metaverse will be easy, given that two-thirds of American adults and 75 percent of under-18 kids already play a video game weekly.

Activision accounts for a lot of this activity. According to one report, it sees over 400 million people play one of their many games monthly. This is a bigger monthly user base than Twitter.

With Facebook and now Microsoft set to dominate the metaverse, at least in the early days, there’s one obvious loser, blockchain technology. The two are unlikely to commit to decentralized infrastructure which would see smaller rivals get a foothold on the sector they are spending tens of billions of dollars to build.

Games like Axie Infinity are already pushing blockchain-based metaverse ahead, but Microsoft is likely to spend billions to ensure that Activision franchises take away from the market share of Axie soon.

Related: NFT-based game Axie Infinity registers record-breaking $2.3M digital land sale

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Steve has been a blockchain writer for four years, and a crypto enthusiast for even longer. He is most excited by the application of blockchain to solve the challenges facing developing nations.

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