Flagship licenses, metaverse, inclusion… Five questions about the colossal takeover of Activision Blizzard by Microsoft

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Microsoft announced on January 18 the acquisition of the American video game giant, Activision Blizzard for 68.7 billion dollars. A record amount for an acquisition in the history of the video game industry. For comparison, Disney bought in 2012 Lucasfilm, the production company of the Star Wars saga, for “only” 4.05 billion euros. MBut beyond the financial stakes (at the end of the takeover process which should be finalized in 2023, Microsoft will become the third video game company in the world in terms of turnover behind Tencent and Sony), how does this control of the Redmond group on Activision and its catalog of successful franchises (Call of Duty, World of Warcraft…) can it change the future of video games? To try to see more clearly, franceinfo interviewed several experts in this industry like no other.

A teenager plays the game Call of Duty Warzone in Briançon, February 16, 2021.   (THIBAUT DURAND / HANS LUCAS / AFP)

1Will the flagship licenses be reserved for subscribers?

With the takeover of Activision Blizzard, Microsoft considerably enriches its catalog of video games which was already huge. The titles Call of Duty, Diablo, Overwatch, World of Warcraft, Candy Crush, all international successes, fall into the hands of Microsoft. They are added to the franchises produced by ZeniMax, the video game heavyweight acquired by Microsoft in 2020, and which owns the Bethesda studio known for the series. Fallout, Doom or The Elder Scrolls. Previously, Microsoft had already gotten its hands on the wallet to afford popular franchises like Minecraft and Hellblade. All of these games are in addition to Microsoft’s own productions via Xbox Games Studios, which is behind the games Halo, Forza Horizon Where Age of Empire.

With all these acquisitions, Microsoft finds itself at the head of a vast universe of successful franchises and especially gets its hands on several video game studios that belonged to Activision. At the end of the takeover process, the Xbox manufacturer will be able to rely on a network of 36 studios. An immense strike force to innovate and extend successful sequels.

The Minecraft game, which for example was bought by Microsoft, did not become an exclusive and remained cross-platform

David Javet

video game researcher

But one question is burning the lips of gamers around the world. Will Activision games become exclusives for Microsoft console owners and Game Pass subscribers? “This takeover concentrates so many games and development studios that the effects will occur in the long term. To try to guess Microsoft’s intentions, we can look at what the group decided after its previous takeovers. The game Minecraft, which for example was bought by Microsoft a while ago, did not become an exclusive and remained cross-platform”, notes David Javet, researcher specializing in video games at the University of Lausanne.

2Will Microsoft become the “Netflix of video games”?

In the future, however, Microsoft could seek to develop exclusives thanks to the know-how of the studios it has acquired. “For Activision as for ZeniMax, I think that the games that already exist will remain cross-platform. But creations will no doubt be developed exclusively for Microsoft to enhance the appeal of Game Pass.” continues David Javet. Following the Activision takeover, Xbox Game Studios boss Phil Spencer tweeted that he had spoken with Sony executives to reassure them that Activision’s existing franchises would still be distributed on Playstation.

Microsoft could, however, be tempted to reserve very strong titles, such as Call of Duty, to its subscribers. “What we can be convinced of is that Activision Blizzard games will be available on the Xbox Game Pass, because they will be so many arguments in favor of taking out a subscription. It remains to be seen whether Microsoft will choose to to reserve exclusivity for its consoles or its Game Pass service. It has every right to do so, but it would be taking an economic risk, because by opting for an exclusivity strategy, it renounces all the income that could generate the games in question if they were exploited on other gaming platforms”, completes Julien Pillot, economist at Inseec and expert in the video game sector.

Microsoft is indeed guided by two strategies through the creation of its enormous catalog of video games: to make its Xbox consoles profitable by selling as many games as possible to players and to develop a platformVideo game Netflix “also open to Android and Apple smartphones.”For Microsoft, it doesn’t matter on which machine you play, as long as you subscribe to its service. This is why it now offers its “Xbox Game Pass” on Apple and Android phones, and why it does not rule out porting it to other platforms in order to further expand its pool of potential subscribers. enlightens Julien Pillot.

The hugely popular smartphone game Candy Crush joins Microsoft's catalog.   (ILYA S. SAVENOK / GETTY IMAGES NORTH AMERICA)

3Warcraft, the ideal franchise to create a metaverse?

One of the fantasies that fuels the discussions of experts in the video game scene after the takeover of Activison Blizzard is the creation of a metaverse by Microsoft. Microsoft CEO Satya Nadella himself referred to this takeover as one more step in the construction of this virtual universe in which users would be embodied by an avatar to participate in adventures, buy goods and services online. …

In one essay published in January 2020 (in English), tech investor Matthew Ball frames the metaverse as it might arrive in the next few years: a persistent universe, unpaused and unrestartable, providing a sense of active presence and filled with content and sensory experiences, all based on an economy of its own. the Facebook group, on the front line, announced on Monday October 18, the creation of 10,000 jobs in the European Union to develop the “metaverse”.

Much of the technology, both hardware and software, on which the metaverse should rely comes straight from the world of video games. However, for David Javet, the metaverse is still a distant concept. “Like virtual reality, it’s going to become a keyword that’s been thrown around a bit by investors. But what’s interesting is that this metaverse is anchored in parallel universes. I think that ‘we’re going to have a renewed interest in games like Second Life”, judges the researcher from the University of Lausanne.

Rather than a global metaverse, Microsoft could therefore seek to build on a successful franchise to reinvent it using virtual reality and offer gamers an even more immersive experience. A license from Activision Blizzard fits perfectly with this ambition: Warcraft. In an interview with The Washington Post on January 20, Xbox boss Phil Spencer said audiences at World of Warcraft, a role-playing game that has attracted 116 million active players since its debut, was typically a receptive target for metaverse-like experiences..

Julien Pillot fully believes in the potential of Warcraft to initiate a metaverse. “The acquisition of Activision Blizzard allows Microsoft to get its hands on one of the richest creative licenses in the video game universe with Warcraft. We could say it in these words: in terms of creative depth and cultural impact, Warcraft is to video games what The Lord of the Rings is in literature and cinema. One World of Warcraft 2.0, powered by technologies such as virtual reality, augmented reality or even haptic feedback, would probably offer – at least on paper – one of the most intense immersive experiences imaginable. And perhaps also, one of the most awaited by the players”, predicts the economist.

The metaverse will make it possible to extend the use of virtual reality (photo illustration).  (SOPHIE BORDIER / MAXPPP)

4Towards a standardization of video games?

The concentration of the video game industry in the hands of a few giants like Sony, Tencent or Microsoft makes fans fear a standardization of titles. The next installments of the licenses Warcraft Where Overwatch will they keep their soul, where will Microsoft want to impose its paw on the development studios of these games?

There is this fear that the platforming logic of video games could lead to a standardization of the gaming industry, that all games look the same within the same company. In my opinion, this is quite unfounded. We do not perceive at Xbox a very strong identity like what we can find at Netflix where there is a certain touch for series or documentaries. Perhaps because the video game sector is still very diverse in terms of creativity”, analysis David Javet.

According to the researcher, who also has a developer hat within the Momo-Pi studio, author of several games for the Google Play platform, there is especially good news with this record takeover for the studios. “The good news is there’s going to be a lot of money to make better games. I’ve got quite a few fellow developers who have been approached to get their game live on Game Pass. This injection silver is good news for the ecosystem”, concludes David Javet.

5A more inclusive video game industry?

Before its takeover by Microsoft, the Activision Blizzard group was in the grip of a deep internal crisis. Lhe management is accused of having allowed discrimination to persist and of having fostered a culture of sexual harassment in this group of nearly 10,000 employees. A lawsuit, filed on July 20, 2021 in a California court by the Department of Fair Employment and Housing (DFEH), a California public agency, marked the culmination of a two-year investigation into Activision Blizzard’s practices.

The arrival of Microsoft at the helm could therefore make it possible to develop a more inclusive culture within the studios of Activision Blizzard. “This change in governance can be very positive. Activision Blizzard has been exposed in the press lately about sexual harassment cases. Microsoft has an approach that promotes diversity of profiles and inclusiveness within its teams”, says researcher David Javet. After the revelations around Activision, Xbox boss Phil Spencer wrote in an internal email to his teams revealed by Bloomberg :CThat kind of behavior has no place in our industry.”

According to Wall Street Journal, the CEO of Activision Blizzard, Bobby Kotick, accused of allowing a toxic corporate culture to thrive, is expected to step down once the takeover is effective.

Microsoft announced on January 18 the acquisition of the American video game giant, Activision Blizzard for 68.7 billion dollars. A record amount for an acquisition in the history of the video game industry. For comparison, Disney bought in 2012 Lucasfilm, the production company of the Star Wars saga, for “only” 4.05 billion euros. MBut beyond…

Microsoft announced on January 18 the acquisition of the American video game giant, Activision Blizzard for 68.7 billion dollars. A record amount for an acquisition in the history of the video game industry. For comparison, Disney bought in 2012 Lucasfilm, the production company of the Star Wars saga, for “only” 4.05 billion euros. MBut beyond…

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