Thursday, March 28

Microsoft’s Activision plan shows that gaming will be at the center of the metaverse | Microsoft


Microsoft’s planned acquisition of Activision Blizzard puts the tech company at the center of two big issues facing the industry: the metaverse and Washington’s determination to control big tech.

The metaverse is where the physical and digital worlds meet, although it is still in the concept stage. The idea is that you put on a virtual reality headset and a digital representation of yourself, an avatar, interact with other people at work and play games in a combination of virtual and augmented reality.

Microsoft has made it clear with its planned $68.7bn (£50.6bn) acquisition of Activision Blizzard that it expects gaming to be a key feature of this new world, and Satya Nadella, chairman and chief executive of Microsoft said on Tuesday that games “will play a key role in the development of metaverse platforms.” If the metaverse is an immersive world, then games, as titles like Roblox and (Microsoft-owned) Minecraft demonstrate, already offer that experience to its participants.

Mark Zuckerberg is so convinced of the potential of the metaverse concept that he changed the corporate name of his empire from Facebook Inc to Meta. If his recent announcement that his company will spend $10 billion a year in the metaverse seemed like a gamble, Microsoft has just bet nearly $70 billion.

Of course there are immediate benefits for Microsoft, which will gain access to Activision’s 390 million monthly users and big game franchises like Call of Duty and Warcraft. Games, Metaverse or not, are already a $180 billion global market, according to research firm Newzoo. Microsoft owns the Xbox gaming platform and Activision’s games and talent will help the company in its competitive battle with Sony’s PlayStation, as well as Meta’s VR platform Oculus game offerings.

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Despite big brands like Xbox and the Halo game, Microsoft’s big revenues are focused on business: cloud computing (that is, providing services like internet storage space and avoiding having to invest in hardware) and software. for PC. As analysts at Wedbush Securities said of the deal on Tuesday, Microsoft’s consumer strategy has “been on a treadmill approach.” No longer.

But the opinion of regulators and lawmakers is important in this deal. Microsoft is one of the big three console manufacturers and owns game creation studios like Mojang, the creator of Minecraft. If this deal goes through, Microsoft would become the world’s third-largest game maker and regulators will take notice, says David Wagner, analyst and portfolio manager at Aptus Capital Advisors. “This is going to get a lot of stares from a regulatory standpoint.”

The US competition watchdog, the Federal Trade Commission, is now under the leadership of Lina Khan, who has underlined her interest in taking on the big tech players by successfully filing a new complaint against Meta. Khan is a Joe Biden appointee and big tech has few friends among Democrats and Republicans in Congress. Microsoft is taking a big step in a hostile environment.


www.theguardian.com

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