Microsoft bets on gaming and the metaverse

Microsoft bets on gaming and the metaverse

| Wednesday 19 January 2022

NYT

Microsoft agreed to buy Activision Blizzard, the video game maker behind hits like Call of Duty and Candy Crush, for $68.7 billion in cash. The deal will position Microsoft for the next generation of the internet.

The acquisition, Microsoft’s largest ever, would catapult the company into a leading spot in the video game industry and could strengthen its hand in virtual and augmented reality. The takeover would make Microsoft the world’s third-largest gaming company by revenue, behind Tencent and Sony, the company said.

U.S. regulators face a challenge in deciding how to approach the huge deal. Microsoft has expanded its gaming business to surpass $10 billion in annual revenue. In anticipation of a longer review, Microsoft said it did not expect the Activision deal to close until the next fiscal year, which ends in June 2023.

Metaverse: The name for the virtual worlds many companies are putting money into is more of a buzzword than a big business for now. But the Activision deal could give Microsoft a significant boost against Facebook, which is considered the leader in the metaverse. Our tech columnist explains what the hype is about.

Context: One main driver of video game deals is the race for exclusive content: Locking up a major franchise like Call of Duty or Skyrim, for instance, could force fans to switch from Sony’s PlayStation to Microsoft’s Xbox, if Microsoft chose to make a game exclusive.

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