Acquisitions are often the most important means for enterprises to obtain rapid business growth and volume expansion in a short period of time, which is more common in the field of consumer content that relies on asset accumulation and experience training.
Through the acquisition of Oculus, Facebook has the ability to design and manufacture VR devices and content, and has booked ferry tickets in advance for the subsequent name change and grasp of the future. Tencent's acquisition of Riot Games maximized the value of the League of Legends game, indirectly opening a new chapter in Tencent's interactive entertainment business, and a series of overseas acquisitions that followed reversed some of people's perceptions of the company.
On the evening of January 18, Beijing time, we witnessed what may be the most important acquisition in the history of the gaming industry , Microsoft announced the acquisition of Activision Blizzard. To be precise, Microsoft bought the entire Activision Blizzard Group covering Activision, Blizzard, King and its game assets for $68.7 billion, and classic game brands such as Warcraft and Call of Duty will also be acquired by Microsoft.
At book value, Microsoft will become one of the world's top three game companies on a par with Tencent and Sony after the acquisition is officially completed in fiscal 2023.
Buy users buy assets, the original can really become the leader
As soon as the news of the acquisition came out, gamers around the world were shouting, and Microsoft bought a game company that was temporarily in the predicament of sexual scandals and personnel losses, but also contained deep historical assets. This must talk about Blizzard Entertainment in Activision Blizzard, which has influenced generations of Chinese gamers and practitioners, and even left a deep mark on the world game industry.
Blizzard's Warcraft and StarCraft series have established a mature RTS gameplay, and used an open map editor to hatch a number of RPG and MOBA self-made maps, including the famous DOTA. DOTA not only hatched the sequel "Dota 2", which has the highest esports competition with the highest prize pool, but also nourished the national games League of Legends and Glory of Kings.
"Diablo" and "World of Warcraft" have made the online game industry learn how to play well: "Legend" represents a popular online game, and its core gameplay comes from the ARPG system established by "Diablo"; "World of Warcraft" affects the industry in multiple angles such as career design, plot writing, multiplayer gameplay, and even today's top MMO "Final Fantasy 14" is no exception.
Hearthstone and Overwatch, which are relatively fresh, have set industry benchmarks in card battles and e-sports. Activision Blizzard's Activision and King are by no means idle, the former has a new work every year to sell "Call of Duty", the latter has the most profitable casual mobile game "Candy Crush Legend", their revenue performance is even stronger than Blizzard.
After Microsoft's acquisition of Activision Blizzard, the latter, which has nearly 10,000 employees around the world, will remain independent, but its games will be added to the Xbox Game Pass (XGP) subscription service, and players can play for free without having to buy separately. In the longer term, the follow-up new works of classic and original game brands may only be launched on Microsoft platforms such as Xbox and PC, with absolute appeal.
In fact, Microsoft is indeed a top game company that has been bought. Whether it's acquiring game companies, developing teams to expand R&D capabilities and game lineups, or "buying" players with low prices, high configurations, patient after-sales and cost-effective services, microsoft's game business has always been something that Microsoft's game business has insisted on, from the bill Gates era to today, and few large companies have been so determined.
The first generation of Xbox is to open the market at a loss-making price, let people realize that Microsoft game consoles can try, the second-generation product Xbox 360 suffered a "three red" crisis, but also at the cost of nearly $1 billion to save the player's reputation. In terms of game content, the Microsoft watch game "Halo" series is developed by the acquired Bungie, and several third-party masterpieces in the Xbox 360 era are more stable.
The third generation of products Xbox One due to the expansion of the "family entertainment" ambition and the start of the unfavorable, Microsoft in time to find the game content priority strategy, with compatible with the previous generation of console game libraries, XGP services to reduce the comprehensive price and other means, once again won the recognition of players to regain the ability to compete with Sony, Nintendo. Perhaps it is at this time that Microsoft executives found that the lineup of works is the core of the game business.
Microsoft already has 343 studios focusing on the shooting game "Halo", Playground Games, Turn 10 and other studios that develop the racing game "Forza", but the self-built team is far from being able to cover the game content that mainstream players like, and the acquisition has become another main axis of Microsoft's game business: Mojang, which developed "Minecraft", and ZeniMax, which holds "The Elder Scrolls" and "Doom", have joined.
After a series of acquisitions, Microsoft now has the ability to develop all major game genres except Japanese RPGs, and will be tested by the market sales, and the player base has a long-standing reputation for multiple game brands. A super galactic fleet with Xbox consoles and gaming services at its core is about to be assembled, and the question that remains is where it can go.
Don't think about it, microsoft plans don't write metacosm
Although the current Microsoft CEO Satya Nadella said that "Activision Blizzard will become a key player in building the metaverse platform", although activision Blizzard developers have the strength, it does not mean that this blockbuster acquisition is to build the metacosm. It looks more like a white lie made by Microsoft as it chases new concepts in Silicon Valley and across the ocean.
When investors see that the financial report and storytelling space are not going well, it is easy to "cry twice and hang themselves three times". In order to coax them well, the helmsman of a large company has done almost everything, but some people have personally started a car three times, and some people have expressed their views on the "outlet" in the press release. But these words are just a pleasure, don't take them seriously.
There will not really be investors, players and developers willing to activision Blizzard to mobilize a large force now, in advance into the next 5 to 10 years to see results in the software and hardware of the meta-universe. Grasping the current game brand value to explore revenue space, such as making "Diablo 4" and "Overwatch 2" into "Blizzard Production" level boutique games, is a practical means to boost performance in the short term.
Of course, we can't completely put the olive branch thrown by Microsoft to the metaverse as a complete fart, and then think about the specific number of this transaction, in fact, it is also hinting: Activision Blizzard holds the "World of Warcraft" and "Call of Duty" development team, has gathered the world's most likely to do a good job of the metaverse of the developers, made a credit book that can give Microsoft a credit, can not do that is the metaverse is really finished calf ...
So Microsoft's stock price fell after the acquisition was announced, is it because investors feel that the story is not sexy enough? The next three or five years of game money, the next ten years of the universe to make money pie is really fragrant, but it is really too risky - $68.7 billion consumed half of the cash flow in Microsoft's hands, enough to buy NetEase or Ding Boss's "folk master" Nintendo, smashing will be unusual pain.
However, these are not important to the Microsoft game business that Activision Blizzard will soon belong to, because it is not the investor's wallet that ultimately supports the revenue with payment, but an ordinary gamer. Under Phil Spencer, who leads Microsoft's game business, the ultra-simple business model of "I give you money, you give me games" is the direction of development that is most likely to prove its value in the next decade.
This is far more important in Microsoft's official context than the metacosm: Microsoft claims that a total output value of more than 20 billion yuan is the largest and fastest-growing form of entertainment, and 51% of U.S. gamers will play video games at least 7 hours a week in 2021, and Microsoft's gaming business has become quite impressive. Xbox has more than 100 million monthly active players across the platform, of which at least 25 million have activated the XGP service.
Microsoft bought Activision Blizzard heavily to "fight the future", but not necessarily the future in which the metacosm became the mainstream form of entertainment. Microsoft expects the number of gamers worldwide to grow from the current 3 billion to 4.5 billion by 2030, and Microsoft's rich game lineup is bound to connect them when they choose premium content that meets their entertainment needs, which in turn translates them into real paying users.
Is this the "Giant Hardwood Horse" 2.0?
The last time Microsoft made a "fire to the loop" acquisition was in September 2013, when it bought Nokia's mobile phone business for about $7.1 billion. The follow-up of that combination was not perfect, the market position of Nokia's mobile phone could not be maintained, Microsoft hastily suspended the entire mobile phone business, and even the spirit of product development brought by the Finns has not been inherited in the subsequent Microsoft hardware.
Steven Elop, who became Nokia CEO from a Microsoft executive position and became a vice president of Microsoft after a series of events such as streamlining business, layoffs, and acquisitions, was once regarded by public opinion as a "Trojan horse" installed in Nokia. Some people believe that it is he who disrupts the business order and finally suppresses the purchase price, otherwise Nokia will be expected to return to the peak with MeeGo or Android systems.
Similar characters were found in the acquisition: Former vice president of Microsoft's gaming business, now head of Blizzard Entertainment, and Mike Ybarra, who will be a Microsoft employee in the future. After the elder brother joined in 2019, Blizzard has more frequently exploded sex scandals and core personnel losses, and this acquisition is also made public after he became the person in charge in 2021, which inevitably makes people think more.
Conspiracy theories always have a broad market, but the truth is often completely contrary to the wishful thinking of many people, and trying to judge the ins and outs of Activision Blizzard's acquisition through the experience of such a character may be quite out of touch with reality. And whether the "giant hardwood horse" 2.0 is real is not important, what is important is whether Activision Blizzard can revitalize and continue to bring excellent game content after Microsoft enters the ownership.
Returning to this matter, although Activision Blizzard appeared as a complete company in the investment market, in terms of business strategy and development direction, Activision, Blizzard and King are almost three companies. Mike Ybarra, who is just the head of Blizzard, may have a hard time influencing the decisions of his boss, Activision Blizzard CEO Bobby Kotick (who can almost be considered activision founder).
In contrast, Stephen Elop held far more power than Mike Ybarra, and ultimately sold Nokia's mobile phone business to Microsoft, rather than Nokia as a whole, including the communications business. Today, it is a bit far-fetched to judge former Microsoft employees who are at the bottom of Activision Blizzard's management list and are also passive-eyed and King presidents sandwiched between them.
In addition, long before Microsoft officially announced the acquisition of Nokia, Microsoft's Windows Phone 7/8 mobile phone operating system and Nokia mobile phone business were each mired in a quagmire, and the acquisition was more like tying them together than trying to rescue them. This is also the epitome of Microsoft's series of chaos that year, and its consumer business has become a masterless and headless fly after experiencing the bad reviews of Windows 8.
Activision Blizzard's situation is different from Nokia's, and the last two stock price fluctuations cannot all be blamed on Blizzard's negative, and 2021 has reached an all-time high. Today, Microsoft also has more confidence, as mentioned earlier, Xbox as the core game business has once again formed a three-point situation with Sony and Nintendo, and the acquisition of high-quality game brands and top developer teams is to take advantage of the chase, not to take poison.
"Trench gas" so far, do not buy The Chinese and Japanese game team
According to incomplete statistics, the number of microsoft game studios will reach as many as 30 after the completion of the acquisition, but there is no Japanese game developer at all. Even if the contemporary game development environment and console platform chips are dominated by the European and American industrial chains, the creativity and execution of Japanese developers are still among the best, not to mention Nintendo sitting on the special seat, third-party manufacturers also have world-class works.
In the early 20000s of the Xbox and Xbox 360 era, the emerging gaming platform's efforts to buy japanese R&D power can almost be described as "licking dogs." At that time, a large number of Microsoft Xbox exclusive games also emerged, such as "Blue Dragon" created by Hironobu Sakaguchi, the father of "Final Fantasy", and Akira Toriyama, the original author of "Dragon Ball", and "Idol Master", which influenced a large number of subsequent idol-themed games.
Today's Microsoft can be said to be different from the past, not only has not acquired a Japanese development team or co-opted star producers, nor has it monopolized any Japanese games on Xbox and PC. This may be the result of Japanese game companies looking to remain independent from the platform for a long time, or it may be Microsoft's decision to focus on Europe, the United States and the global market after a long period of tepid Xbox.
Of course, Microsoft did not completely sever its relationship with Japanese games, but in a mode of benefiting players and developers to preserve its vitality: some works that were originally exclusive to sony and Nintendo platforms began to be ported to Xbox and joined XGP, developers can get an additional income quite directly, and players do not have to pay extra for specific games or buy game consoles, continue to subscribe to XGP.
XGP's rich game lineup and The R&D capabilities of Microsoft Game Studio are the biggest value of Microsoft's game business across Xbox consoles, PCs and other devices, and indirectly promote the latest generation of Xbox Series X|S sales in Japan are rising steadily, no longer a slow-selling "murder box". Therefore, even if Microsoft has not acquired Japanese studios in the future, it will not lay major hidden dangers for the game business.
As for why Microsoft didn't buy a Chinese game company, that's a very different question. Microsoft has released several mobile games, and this transaction also includes King, the developer of "Candy Crush Legend", but the core of the game business is still straightforward, that is, the above-mentioned "I give you money, you give me the game", and the goods sold to consumers are the game content itself.
After more than 20 years of development, China's game industry has formed a "revenue maximization" business model, the value of player consumption does not come entirely from the game itself, and different manufacturers have not accumulated a similar pricing system, but the purpose is highly unified: to use different methods to earn as much profit as possible from various types of players. They and Microsoft are already in a different world, how can they talk together?
On the other hand, game developers who have grown up in such a market environment do not have the rich experience of developing multiple game types, even if they are willing to do a good job of selling on a volume. The independent game "Dyson Ball Project", the target 3A "Black Myth: Wukong" and the many attempts of Tencent NetEase let us see the potential of China's game industry, but it is not equivalent to having the world's top research and development strength.
Therefore, Microsoft Sony has the intention to set up a game development studio in China, and it is difficult to organize a team that can independently complete high-quality products, and it is necessary to give more time to grow, summarize and summarize lessons, and catch up with the international leading level. Affected by many factors, Microsoft is not eager to seize market share in China at present, and the relationship with developers is often to provide help and support.
In the future, no Chinese game developer will take the olive branch from Microsoft, but they are just as promising to leave a strong mark on Xbox and the broader game market.