Microsoft is on a spending spree to expand its gaming division. After Bethesda Softworks, the company has now acquired Activision Blizzard for a record sum of $68.7 billion. Microsoft claims this deal would make it the world’s third-largest gaming company in terms of revenue, after Tencent and Sony.
Even though enterprise solutions and the cloud have been the key growth driver for Microsoft, gaming has been an integral part of their business. Microsoft has been behind some of the most popular games such as Halo and Age of Empires. Microsoft’s Xbox gaming consoles have also emerged as the key challenger to Sony’s PlayStation consoles after the downfall of Nintendo’s Wii consoles. According to Statista, from 2018 to 2020, PlayStation's Market share has shrunk from 71.11% to 57.54% while Xbox's market share has grown from 25.21% to 42.15%.
The emergence of cloud gaming as the new frontier has seen that rivalry stretch in the online space with the launch of Xbox cloud gaming service in 2020.
The future of both Xbox consoles and cloud gaming services depends to a large extent on the games that are available on these platforms. Sony has managed to dominate the console gaming market with several exclusive gaming titles such as Uncharted, Marvel’s Spiderman and The Last of Us, which are only available with the PlayStation.
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With the acquisition of two major gaming publishers in Bethesda and now Activision, Microsoft now owns one of the most exciting collection of popular games. If Bethesda’s acquisition gave them control over Elder Scrolls, Fallout and Wolfenstein, the deal with Activision has added one of the most popular gaming titles ever in the history of gaming. According to Statista, The Call of Duty series is the third highest-selling game series ever with 400 million units sold in the last two decades, after Tetris (495 million) and Mario (681 million).
Not to forget that Call of Duty is now also a mobile game on the lines of PUBG and has garnered a huge fan following in the markets such as the US and India. According to Sensor Tower, Call of Duty Mobile was the 11th highest-grossing mobile game in the US, ahead of the likes of Garena Free Fire. This also opens doors for Microsoft in the mobile gaming segment, which has been growing a lot faster than even console and PC gaming.
If Microsoft chooses to restrict access to existing and future Call of Duty games to its Xbox platforms, it can help them in the long run and boost sales of Xbox consoles, game pass subscription and even the cloud gaming service, which is expected to see huge growth in the coming years as per industry experts.
However, this will not go down well for the gaming community and will force them to opt for multiple gaming platforms and consoles to play their favourite games. In addition to the extra cost, it may even lead to subscription fatigue along the same lines as we are seeing in movie streaming right now. Activision owns multiple other game development companies such as Treyarch, Infinity Ward and Raven Software. Even before the acquisition of Activision, Microsoft’s gaming division controlled more than 20 game studios. Control over multiple gaming publishers by one of the big tech companies can trigger a monopoly war in gaming and lead to similar acquisition spree by the likes of Google, Sony and Meta to protect their gaming interests.