PARIS: Microsoft catapulted itself into the large league in one of many world’s most profitable markets on Jan 18 by asserting a US$69bil (RM289.24bil) deal to take over video game maker Activision-Blizzard – the largest acquisition within the sector’s historical past.
The deal will convey a number of the world’s most well-known video games into Microsoft’s possession, together with Call Of Duty, Candy Crush and Warcraft, and make it the third-largest gaming firm on this planet, behind solely Sony and Tencent.
It comes simply days after the sector’s earlier report was smashed by Take-Two’s US$12.7bil (RM53.23bil) takeover of cell game specialist Zynga.
Analysts say the blockbuster offers present simply how pivotal gaming is changing into.
“Brands, musicians, and IP holders are increasingly reaching their audiences via games versus the other way around,” mentioned Shanti Bergel of the Transcend Fund.
“Against that, Microsoft is building out an ambitious cross-platform interactive entertainment strategy and needs hit gaming content to power it.”
Gaming within the cloud
But tens of millions of avid gamers are watching nervously to see if the deal will get previous regulators, fearing that Microsoft might attempt to make an unparallelled portfolio of video games playable solely on its Xbox consoles – on the expense of rival Sony’s PlayStation 5 particularly.
“If Call Of Duty and all Activision-Blizzard games become Microsoft exclusives, it puts enormous pressure on Sony and all those who want to do ‘cloud gaming’ like Google, Amazon and Tencent,” Charles-Louis Planade, a video game knowledgeable at Midcap Partners, instructed AFP.
Cloud gaming permits gamers to get entry to video games with out having to obtain enormous chunks of knowledge.
Pushing cloud gaming together with cell platforms and gaining an even bigger foothold in Asia are all a part of Microsoft’s pondering, in response to Niko Partners, which specialises within the gaming sector in Asia.
“The combination of HD console games for Xbox being available via cloud for mobile and other devices plus Activision’s dedicated mobile games development will support Microsoft’s goal of platform, IP and geographic expansion,” mentioned Niko Partners in a word to purchasers.
Microsoft, which had already opened its pockets in 2020 to fund a US$7.5bil (RM31.43bil) takeover of Bethesda, makers of The Elder Scrolls and Fallout collection, will get one other bonus from all these acquisitions.
“Following the acquisition, Microsoft will gain a dominant position in esports, a growing theme where it has struggled to make a mark in the past,” Rupantar Guha of GlobalData.
‘Mushrooming popularity’
All eyes will now be on the responses of Microsoft’s main rivals, with analysts mentioning that tech giants like Google and Amazon have enormous ambitions however solely very slim game portfolios.
This makes extra takeovers and acquisitions probably.
“There are still some interesting players,” mentioned Laurent Michaud, an analyst specialising within the video game trade.
Electronic Arts, which makes Fifa and The Sims amongst others, could possibly be a goal for the US giants, he recommended.
And Sony would possibly wish to choose up game makers like Bandai Namco or Konami.
French agency Ubisoft, which counts Assassin’s Creed amongst its hottest creations, may be within the sights of the giants, in response to analyst Planade.
The quantities being paid for game makers could seem exorbitant, however the worth of the businesses is underpinned by the best way gaming “is viewed as an integral part of our future social and digital lives”, mentioned Sophie Lund-Yates, fairness analyst at Hargreaves Lansdown.
“The mushrooming popularity of this hobby is why Microsoft has delved into its very well-lined pockets and splashed out on the gaming production giant. From an outside perspective, the logic is fairly flawless.” – AFP
