Understand the outcome of the Microsoft-Activision Blizzard agreement – 10/17/2023 – Tech

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Microsoft announced last Friday (13) the completion of the purchase of Activision Blizzard for US$75 billion (R$380 billion). The deal announced in January last year, considered the largest in the video game industry, was finalized after battles between the companies involved and competition regulatory bodies, mainly in the United States and the United Kingdom.

“As one team, we will learn, innovate and continue to deliver on our promise to bring the joy and community of gaming to more people,” said Phil Spencer, head of Xbox, in a statement about the deal’s completion.

I list seven points that explain the conclusion of the deal and its effects on the games industry.

1 – What decided the game
The announcement was made hours after the CMA (which regulates competition in the United Kingdom) approved a reformulated proposal for the agreement. The agency had blocked the acquisition in April and became the last obstacle to its completion after Microsoft overcame opposition from the FTC (which regulates competition in the USA) in the American Federal Court in September.

2 – Cloud gaming

According to the version of the agreement approved by the British body, French company Ubisoft will have the perpetual streaming rights to all games already released and those yet to be published by Activision Blizzard over the next 15 years.

The inclusion of Ubisoft in the deal was the solution found by Microsoft to appease the fears of British authorities that the company, which already dominates the “cloud gaming” market, would become hegemonic in this sector and practice anti-competitive tactics — something that also worried the European authorities and resulted in concessions from the company to consumers in the region.

3 – Mobile market

Microsoft, in turn, argued that the cloud gaming market was not fundamental to the business, and that its objective with the acquisition would be to expand the Xbox Game Pass portfolio, its subscription gaming service, and, mainly, its participation in the mobile games market.

Therefore, more than cloud gaming, one of the main assets that interested the American company is King, developer of the popular mobile game “Candy Crush”. Microsoft executives even stated that the deal would be essential for the company to enter the fight with Apple and Google for the app market, but it is not clear how this will work.

4 – To the winner, the potatoes

Still, unintentionally, Microsoft acquired a diverse range of successful game franchises in the business, which, among others, includes:

• Call of Duty: the main series of first-person shooters today, with 20 years of success

• Diablo: one of the best-known series of action RPG games

• Warcraft: strategy game franchise that expanded and today includes one of the main MMOs in the world

• Overwatch: First-person shooter series with a sizable esports scene

• Tony Hawk’s Pro Skater: very popular skateboarding game franchise in the 2000s

• Guitar Hero: series of rhythm games that was also popular in the 2000s

• Crash Bandicoot: platform game franchise that, interestingly enough, was successful on the PlayStation

Xbox Game Pass subscribers, however, will have to wait a while to play the titles on Activision Blizzard. In a post on X Even before the announcement, the company stated that its titles should reach the subscription service over the next year.

5 – New level

For the market, more than just changing hands, the deal represents a change in the scenario of large game companies in the world. According to a ranking by consultancy Newzoo, Microsoft and Activision Blizzard occupy, respectively, the fourth and seventh position among the largest public companies in revenue from games.

However, when adding the revenues of the two (US$3.15 billion from Microsoft and US$2.26 from Activision Blizzard), they reach second place in the ranking, with US$5.41 billion, surpassing Apple (US$ 3.68 billion) and Sony (US$ 4.38 billion) and behind only the Chinese Tencent (US$ 7.56 billion).

6 – Competition

Sony, by the way, leaves the entire soap opera as one of the biggest losers. A direct competitor of Microsoft in the console market, the company was the main opponent of the agreement and the one that worked most closely with competition regulatory bodies and in court to block it.

In the end, he won as a consolation prize an agreement to publish games from the “Call of Duty” series on his platform for the next ten years — as well as Nintendo and Nvidia, among others.

7 – New direction?

In general, Microsoft tends to let the companies it buys act almost autonomously – this was the case with Mojang (from “Minecraft”) and Bethesda (from “Starfield”). Activision Blizzard, however, was the target of allegations of harassment by employees in 2021, who even asked for the removal of its CEO, Bobby Kotick.

In a letter to employees, the executive stated that he will continue to lead the company during the transition at the request of Phil Spencer, but hinted that he will leave his post at the end of the year. It remains to be seen how Microsoft will deal with this situation and who will lead Activision Blizzard for the next few years.

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Play

game tip, new or old, for you to try

Marvel’s Spider-Man 2

(PS 5)

The new Spider-Man game only arrives on PlayStation 5 next Friday (20), but I managed to play a few good hours of the title with an early access copy provided by Sony. It improves on the highlights of its predecessors, such as the freedom to explore a faithfully reconstructed New York from above and the fluid and dynamic combat, alternating moments of stealth and action. There are low points, like the moments when you give up your powers and embody Miles Morales and Peter Parker in tedious mundane activities, like participating in a university fair or hanging out with friends at an amusement park. There is a narrative reason for this, but it also results in an unnecessary break in rhythm. Read the full review of the game by my colleague Gustavo Soares.

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Update

news, launches, business and what matters most

• Unity announced that its CEO, John Riccitiello, has retired. The change comes days after the company tried to implement a new way of charging its game engine and, after negative repercussions, went back on several points. James M. Whitehurst, who was previously president of IBM, assumes the role on an interim basis.

• Sony announced the launch of a new version of the PlayStation 5, thinner and with a detachable disc drive. This version, 30% smaller than the current one, will be the only one sold when stocks of the original model run out.

• CD Projekt used artificial intelligence to recreate the voice of a dead voice actor in “Phantom Liberty”, an expansion for “Cyberpunk 2077”. According to Bloomberg, the company stated that the measure was taken with the consent of the family of Milogost Reczek, the actor who voiced the character Viktor Vektor in the Polish version of the game and died in 2021.

• Viral posts about the war between Israel and Hamas use images from the game “Arma 3” as if they were from the conflict. On the 10th, the Czech studio Bohemia Interactive, responsible for the game, published a note with tips to help users identify false images about the conflict on social media.

• “Minecraft” players have started a virtual petition against developer Mojang’s practice of holding an annual vote on what content should be included in an update. Organizers say the practice divides the community and that the company has the resources to include all voting options.

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Download

games that will be launched in the next few days and promotions that are worth it

18.Oct

“Hellboy Web of Wyrd”: R$ 73.99 (Switch), price not available (PC, PS 4/5, Xbox One/X/S)

19.Oct

“Endless Dungeon”: BRL 149.50 (PS 4/5), BRL 159.90 (PC, Xbox One/X/S)

“Galactic Civilizations IV: Supernova”: R$ 107.99 (PC)

“Gangs of Sherwood”: BRL 109.99 (PC), BRL 184.95 (Xbox X/S), BRL 249.50 (PS 5)

“Gargoyles Remastered”: R$ 54.95 (Switch, Xbox One/X/S), price not available (PC, PS 4/5)

“Hot Wheels Unleashed 2: Turbocharged”: R$ 249.50 (PC, Switch, PS 4/5, Xbox One/X/S)

“Laika: Aged Through Blood”: price not available (PC)

“The 7th Guest VR”: price not available (PC, PS VR2, Quest 2)

“The Gap”: R$59.95 (Xbox One/X/S), R$116.90 (PS 4/5), price not available (PC)

“The Jackbox Party Pack 10”: R$ 129.95 (Switch), price not available (PC, PS 4/5, Xbox One/X/S)

“World of Horror”: R$ 59.99 (PC), price not available (PS 4/5, Switch)

20.Oct

“Marvel’s Spider-Man 2”: R$ 349.90 (PS 5)

“Super Mario Bros. Wonder”: R$ 299 (Switch)

24.Oct

“Cities: Skylines II”: R$ 165.99 (PC)

“Just Dance 2024 Edition”: R$ 299 (Switch), price not available (PS 5, Xbox X/S)

“Metal Gear Solid: Master Collection Volume 1”: R$ 299.90 (PC, PS 4/5, Switch, Xbox X/S)

“The Lord of the Rings: Return to Moria”: R$ 107.99 (PC), price not available (PS 5)