MS, 'Metabus Victory'...Take the initiative on the platform by playing games

Microsoft (MS) will acquire Activision Blizzard, a game company that owns IPs for video games such as Warcraft, Diablo, and Overwatch, for 68.7 billion dollars. This is the largest M&A in the game industry's history, and it is a deal of the century that is 1.3 times the size of the global console game market (51 billion dollars, as of 2020).

Microsoft CEO Satya Nadella bet on the future of the game market, and Microsoft will quickly become the world's third-largest (sales-based) game company following Tencent in China and Sony in Japan. In particular, with this acquisition, Microsoft is expected to be able to expand its metaverse platform dramatically. Analysts say that Metabus, which leads to the gold vein of future industries, has a foundation to compete with top rivals such as Apple and Meta.

Microsoft announced on its blog on the 18th (local time) that it will acquire Activision Blizzard, a strong player in game development and interactive content publishing, worth $68.7 billion ($95 per share). The acquisition is paid in full in cash. When the acquisition was announced on the same day, Activision Blizzard shares rose 30% to close at $82. Activision Blizzard was created by the merger of Activision and Blizzard in 2007 with the goal of becoming the world's largest video game publisher, but eventually fell into Microsoft's arms.

Starting with the head of a video game developer in 2014, Microsoft has expanded its influence in the console game market by acquiring more than a dozen video game developers, including Ninja Thierry, Undead Labs, Compulsory Games, and Zenimax. The acquisition of Activision Blizzard is the finishing touch, which is close to declaring a victory in the game market.

The number of game users worldwide reached 3 billion last year. It is the largest number of movies, dramas, and music contents. Among them, the number of users of Activision Blizzard is estimated to be 400 million. By 2030, the total number of game users is expected to increase by 50% to 4.5 billion. "Game is the most dynamic and exciting field regardless of all entertainment platforms, and at the same time, it can play a key role in the metaverse platform," CEO Nadella said. "We will spare no investment in world-class content, community, and cloud environment that supports it."

Microsoft is planning to expand its market influence, especially focusing on console games. Sony's console market share is 46% (as of 2020), double that of Microsoft (23%). This is attributed to Microsoft's lack of exclusive IP compared to Sony.

Activision Blizzard has been securing a large amount of exclusive IPs since the 1990s as it has dominated the game market. As such, Microsoft will be able to confront Sony's console game PlayStation, which has exclusive IP as its competitive edge.

Date: 2022-01-22

Reporter: 신정훈