Activision Deal Overhyped for Metaverse, Still a Crucial Step
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- January 2022
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Activision Deal Overhyped for Metaverse, Still a Crucial Step
Microsoft teased bullish signals for metaverse plays early in the week as it announced plans to acquire video game conglomerate Activision Blizzard in an all-cash transaction valued at $68.7B. “Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms…We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.” (Satya Nadella, chairman and CEO, Microsoft)
Noting the clear metaverse undertones laced within the statement, it is important to recognize that the true extent of spillover for the metaverse is likely to be more nuanced, albeit not insignificant. The bigger play to pay attention to within the headline, rather, is what Microsoft has been doing behind the scenes with its Game Pass service to create the first-of-kind ‘Netflix of Gaming’ ecosystem. Once completed, the transaction will represent Microsoft’s third gaming-related acquisition and by far the largest, and will introduce the Game Pass ecosystem to AB’s revered suite of iconic gaming franchises like “Call of Duty”.
While Microsoft’s Game Pass only has roughly 25 million monthly subscribers at present, AB franchises currently attract over 400 million active monthly users, and it is suspected that the addition of iconic brands like ‘Candy Crush’ will help Microsoft better compete with Sony and Tencent, Microsoft’s heavyweight gaming competitors.
In terms of precursors to metaverse development, Microsoft’s Game Pass and related acquisitions are playing the important role of building a metaverse-like environment within the framework of Web2. Of course, much of the work being done today will likely undergo shifts and changes as blockchain gaming and Web3 ecosystems continue to grow and ofer a wider range of comparable, if not far more attractive features and services for end users. The rise of NFTs has proven that users value the idea of owning assets within digital arenas, and this sort of market finds a perfect fit within the ecosystem that Microsoft is furnishing with its Game Pass.
So, while the Activision Blizzard deal certainly has a range of important implications for the continued development of metaverse projects, the real win for Web3 and the metaverse in this acquisition are the effects it will have on the psychology and expectations of gaming participants. As Microsoft’s Game Pass portfolio continues to grow and users have access to a wider range of gaming options, the benefits of operating in a shared ecosystem, possibly with some interoperable components across different games, will be increasingly realized for game developers and end users alike–and this is where the benefits of Web3 over Web2 will become realized on a mainstream level.
Michael Sessa
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