With the purchase of Activision Blizzard, Microsoft bets on mobile and the metaverse

By announcing the purchase of the game company Activision Blizzard – a deal of almost US$ 70 billion – Microsoft indicated that it will invest in the mobile games segment and that it should walk towards the metaverse.

When the purchase is completed, which is expected to happen in 2023, in addition to becoming the video game company with the third largest revenue in the world, Microsoft must also present to the public the result of the incorporation of the experience and the portfolio of games from Blizzard, which is responsible for games like Overwatch, Diablo, Call of Duty and Candy Crush.

“Blizzard opens up many possibilities for Microsoft, from a competitive positioning in the ranking of game companies, that is, revenue, to the portfolio”, says Vicente Martin, professor of the Information Systems course at ESPM (Escola Superior de Propaganda et Marketing).

“Microsoft is not just buying the brand, but a series of flagship products that it will be able to explore.”

One way in which the company will explore the new acquisitions, according to the professor, is through the convergence of Microsoft products and services – which has, among other software and hardware, from the Windows operating system, the Xbox console and, with the purchase from Blizzard, famous games among gamers.

“By bringing heavy franchises to the catalog, Microsoft will attract more customers to Xbox. She’ll have a multibillion-dollar grip from that audience [a Blizzard conta com quase 400 milhões de jogadores ativos mensais]”, says Lucas Cabral, a researcher at ITS (Instituto de Tecnologia e Sociedade) Rio.

However, it is not yet known how the distribution of this audience will be, since it depends on Microsoft’s plans for the distribution of the games. According to Bloomberg reporter Dina Bass, Microsoft plans to keep some games for PlayStation consoles and make others exclusive to Xbox.

Another way to explore the acquisition may be the incorporation of options to Game Pass, Microsoft’s subscription service that provides users with a large collection of games.

According to Phil Spencer, CEO of Microsoft’s gaming division, there are already 25 million subscribers around the world. “As Microsoft already has its ‘streaming’, an acquisition of this size opens many doors”, says Cabral.

Mobile is for everyone

The acquisition of Blizzard may represent, for Microsoft, the consolidation of investment in the growing market of mobile games. The experience of the large audience that downloads games on their smartphones must be increasingly taken into account in game design and planning.

“It’s not a trend, it’s already a reality. All the big companies are taking what they practice on console to mobile,” says Martin, citing examples like League of Legends and Fortnite.

For Bárbara Gutierrez, a journalist specializing in games, despite the fact that mobile is our present, many companies still do not know how to deal with it, thinking of mobile games only as low-budget versions of games for consoles. Blizzard, according to Gutierrez, would be among the exceptions.

“Activision Blizzard has been investing for a long time, because they understand that mobile is everyone. Everyone can play,” he says. “It’s different than someone who spends on a console and then buys the game.”

Entry into the metaverse

“This transaction is the largest acquisition ever recorded among technology companies. But what is as important as the acquisition itself is an indication of Microsoft’s entry into the metaverse world”, says André Miceli, coordinator of the Blended MBA in Marketing and Digital Media at FGV.

In fact, the company mentions, in a statement, that the acquisition should “offer bricks for [a construção do] metaverso ”.

The metaverse, in games, is a collective virtual space. The user can access this virtual world through an electronic device and share it.

“We have games that already do this, but there must be an improvement from a technology that allows greater immersion, whether through device resources or narratives and content”, says Martin.

“Some of the games that are part of the conglomerate that was bought by Microsoft, like Call of Duty, have this concept of immersion that the metaverse intends to explore”, recalls Miceli. “Microsoft still didn’t have any great symbols of this process. Now it has.”

Acquisition amid crisis

The deal — which still needs to be approved by legal bodies and Activision Blizzard’s board — comes amid a crisis at the company.

Activision Blizzard faces a series of allegations of moral and sexual harassment, and its CEO, Bobby Kotick, is accused of hiding the cases and failing to commit to improving the work environment. The company’s shares lost value due to the complaints.

“There is this difficult culture in the midst of games. Machismo in games has been perpetuated for a long time,” says Gutierrez.

She points out that, after the announcement of the acquisition, questions arose about the future of Kotick – who, in principle, should keep his position – and about how Microsoft should deal with possible crisis management.

“What is expected of Microsoft, now, is to see how this image cleaning will happen and how it will learn to apply mobile and talk to the community [gamer].”