Some time ago, Microsoft bought Activision Blizzard. And that was the largest entertainment business transition in history. And that can make a huge impact on the future of Xbox.
Activision and Blizzard have created some of gaming industry’s most popular games. Activision is behind famous brands like Call of Duty, Guitar Hero, Skylanders, World Of Warcraft and many more. Blizzard also has a range of games including Hearthstone: Heroes Of Warcraft which is the most played online game in China with over 40 million players daily to Overwatch League where teams from around the globe compete for prizes in live competition as well as during pre-season tournaments leading up to regular season competitions .
Microsoft’s Bethesda acquisition gave the company a much larger portfolio of games and franchises. Microsoft could now be leveraging its gaming properties across mobile and console platforms, including Xbox One and Windows 10. The purchase will also help bolster Microsoft’s exclusives, which have been struggling to gain traction even against cheaper rivals in recent years (such as Fortnite and Rocket League).
Activision Blizzard ceo mike sepso will join microsoft. to hear from activision blizzard ceo bobby kotick, wsj’s tech podcast is in tuesday’s show at 7:40am pacific time/4:40am edt or listen via thespodcastnetwork on apple podcasts as well as other platforms and all major podcatchers including spotify .
Why does Microsoft want Activision?
When you look at the value of the two companies, it’s clear that Microsoft is paying a lot for them. Activision Blizzard currently has a market capitalization of $8.7 billion, while Microsoft has $228 billion. If you divide that $228 billion by the $5.9 billion, you see that Microsoft paid about 60% more for Activision Blizzard than what it’s worth. You can always argue this is a case of long-term investments (Microsoft thinks in 10 years Activision will be even stronger), but we don’t know enough from looking at their balance sheet or earnings to say whether they’re right or wrong.
Activision has plenty of titles with huge audiences, including Call Of Duty and World Of Warcraft which are some of best selling video games all over the world . In addition its portfolio also includes popular franchises like Destiny , Overwatch and Hearthstone.
In terms of how the acquisition will integrate into their business, we don’t know exactly how they intend to do this yet. It is worth noting that Activision Blizzard also has a successful mobile marketer in Candy Crush which could be useful for Microsoft in advertising its services as well . Hence it won’t only turn up on Xbox One but reach out to other platforms like Android or iOS too where Pokemon Go was recently blocked by Apple (Apple does not allow gaming apps with cartoon Animal characters).
Microsoft can understand what gamers want because of its vast consumer demographic data collated from analysis of Xbox fans and also can understand where gamers are likely to spend their money.
We know that the biggest competitor of Xbox is Playstation. And to compete with Playstation, they have to do something better for their audiences. And that’s the reason why Microsoft bought Activision Blizzard.
Now, Microsoft has the entire franchise of Call of Duty video games, Overwatch, Starcraft, World of Warcraft and much more. And we all know that Activision launches a new game of Call of Duty every year. So, they can give special discounts on these games, which will be available exclusively on Xbox consoles. With this technique, they can sell more copies of Xbox consoles.
Microsoft shared that these games will also be added to the Xbox games pass. So, this will be great for Xbox game pass. Because if they add all of these games on Xbox game pass, they can get more subscribers for Xbox game pass. And fans are excited to hear this news because they won’t have to buy any Call of Duty games anymore.
What will happen with Playstation?
Call of Duty: Vanguard was the most popular Sony PlayStation game last year. So, If Microsoft removes all Activision Blizzard games, that can be unfair for Playstation gamers. According to Microsoft, Activision Blizzard’s games will not be removed from Playstation. S, Playstation gamers do not need to worry about that.
What should gamers do now to prepare for the acquisition?
If you’re a fan of Activision Blizzard, this might be a bad news for you. As the company is set to become part of Microsoft and Xbox One owners will not be able to play their favorite games on PC. If you want to have the same game on different platforms, you should buy them for Xbox.
What will happen with Activision Blizzard brands like Call of Duty and Spycraft? Will they be removed from Microsoft consoles also? Or will be add-ons to official console games like Overwatch or Battlefront II ? This can only be known at a later date. We must wait until we get more information about this E3 2017 keynote by Phil Spencer. He already said that his company aims for new milestones in 2018, but it is not clear which “milestones” he referred here.
What happens next?
Playstation has a lot of exclusives like God of War, Uncharted, Last of Us etc. But it still couldn’t be compared at all to Activision Blizzard. Activision Blizzard has World of Warcraft, one of the longest-running live service games of all time, which is now under Microsoft’s control. They have Candy Crush, which can work as a money machine. The future of Playstation is bright, but Microsoft can have a bad effect on Playstaton’s business.
Playstation is releasing Spartacus, a game pass-like subscription, where you will download the game on your console and play them just like Xbox game pass.
But I don’t think that it can compete with the Xbox game pass because Microsoft brings brand new titles on day one on the Xbox game pass. And also, Call of Duty will be a day one game pass released. And I don’t see Spartacus having the same advantage. World of Warcraft will also available on Xbox games pass PC. Ubisoft also has been rally closed with Microsoft recently. Rainbox six extraction would be available on day one in the Xbox game pass. And also, Ubisoft+ subscription will be available on Xbox consoles exclusively. And I would not be surprised if I see Microsoft is also buying Ubisoft.
Overall, the future of Xbox is bright, and Playstation has to do something bigger if they want to compete with Xbox.
Does the Activision Acquisition Make You Want an Xbox? Leave your answer in the comment section.
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FAQ
When you look at the value of the two companies, it’s clear that Microsoft is paying a lot for them. Activision Blizzard currently has a market capitalization of $8.7 billion, while Microsoft has $228 billion. If you divide that $228 billion by the $5.9 billion, you see that Microsoft paid about 60% more for Activision Blizzard than what it’s worth. You can always argue this is a case of long-term investments (Microsoft thinks in 10 years Activision will be even stronger), but we don’t know enough from looking at their balance sheet or earnings to say whether they’re right or wrong.
Activision has plenty of titles with huge audiences, including Call Of Duty and World Of Warcraft which are some of best selling video games all over the world . In addition its portfolio also includes popular franchises like Destiny , Overwatch and Hearthstone.
In terms of how the acquisition will integrate into their business, we don’t know exactly how they intend to do this yet. It is worth noting that Activision Blizzard also has a successful mobile marketer in Candy Crush which could be useful for Microsoft in advertising its services as well . Hence it won’t only turn up on Xbox One but reach out to other platforms like Android or iOS too where Pokemon Go was recently blocked by Apple (Apple does not allow gaming apps with cartoon Animal characters).
Microsoft can understand what gamers want because of its vast consumer demographic data collated from analysis of Xbox fans and also can understand where gamers are likely to spend their money.
We know that the biggest competitor of Xbox is Playstation. And to compete with Playstation, they have to do something better for their audiences. And that’s the reason why Microsoft bought Activision Blizzard.
Now, Microsoft has the entire franchise of Call of Duty video games, Overwatch, Starcraft, World of Warcraft and much more. And we all know that Activision launches a new game of Call of Duty every year. So, they can give special discounts on these games, which will be available exclusively on Xbox consoles. With this technique, they can sell more copies of Xbox consoles.
Microsoft shared that these games will also be added to the Xbox games pass. So, this will be great for Xbox game pass. Because if they add all of these games on Xbox game pass, they can get more subscribers for Xbox game pass. And fans are excited to hear this news because they won’t have to buy any Call of Duty games anymore.
Microsoft is acquiring Activision blizzard for $68.7 billion dollars.
