On January 18, Microsoft officially announced that it will acquire well-known game developer Activision Blizzard for $95 per share, with the entire transaction valued at $68.7 billion, equivalent to about 400 billion yuan. As soon as the news came out, it set off an uproar in the game industry.
On January 19, A-share cloud games, online games, e-sports, mobile games and other game sectors rose strongly, and concept stocks collectively turned red. Specifically, Xunyou Technology and Xinghui Entertainment gained a 20cm limit, glacier network rose by 11%, Shengtian network, Bo Rui spread up and down, and electric soul network, Legg Mason Culture, Gigabit, etc. have followed suit.
It is worth mentioning that Activision Blizzard is a world-renowned game manufacturer, which has developed classic games such as "Warcraft", "Diablo" and "Overwatch" that have swept the world, and have many IPs in the game field. After the acquisition is completed, Microsoft will become the world's third-largest game company after Tencent and Sony, with a market share of 10.7%.
Microsoft said that after the completion of the acquisition transaction, Microsoft will provide a large number of games produced by Activision Blizzard in Xbox Game Pass and PC Game Pass, including new works and games in Activision Blizzard's rich game library.
It is foreseeable that the acquisition of Blizzard will increase Microsoft's video game revenue by about half. According to FactSet, analysts estimate Activision Blizzard's 2021 sales to total $8.7 billion, while Microsoft's earnings report shows that Microsoft's gaming revenue was $15.4 billion in the previous fiscal year.
Aim for the Meta-Universe Track!
Under the acquisition agreement between Microsoft and Activision Blizzard, Microsoft acquired Activision Blizzard for $95 per share in full cash for a total value of $68.7 billion, a 45% premium to Activision Blizzard's share price on January 14. As of press time, Blizzard closed sharply higher by nearly 26% after the news was announced at $82.31, still well below the acquisition offer.
Why did Microsoft intend to spend so much money to buy a game company? Microsoft CEO Nadella commented on the acquisition and said bluntly that the deal will play a key role in the development of Microsoft's metaversymic platform.
At present, games are considered to be an important carrier of the metaverse landing, and it is also the first field in the metaverse application to achieve commercialization.
Huaan Securities said that as the most "immersive" form of entertainment, games are the closest to the characteristics of the metaverse from the perspective of product form, and can be regarded as the prototype of the metacosm.
Over the past two years, many tech giants have invested resources in gaming. Google and Amazon are betting on cloud gaming scenarios, and Netflix is also starting to enter the field. Domestic giants such as Tencent, Alibaba, and Huawei have also laid out the cloud game market.
For Microsoft, which has a lot of money, entering the meta-universe through games is undoubtedly the most imaginative application at present.
Gaming company value revaluation imminent?
From the perspective of the game industry market, the actual sales revenue of China's game market in 2021 was 296.513 billion yuan, an increase of 6.4% year-on-year, and the growth trend was still stable; the overseas market still performed well, and the actual sales revenue of China's self-developed game overseas market in 2021 reached 18.013 billion US dollars, an increase of 16.59% year-on-year.
According to Wind data, the number of game constituent stocks in the meta-universe concept accounts for 23.5%, and recent popular game stocks such as Tom Cat, Zhongqingbao, Perfect World, and 37 Interactive Entertainment have been included.
Therefore, as far as the development status quo is concerned, the current game has the characteristics of the metaverse (virtual identity, social, economic system) to a certain extent, and as one of the important entrances to the metaverse, the game is expected to significantly benefit from the accelerated development of the metaverse.
In the rotation sequence of the six major territories of the meta-universe, Essence Securities takes precedence in hardware and content, and the content is mainly based on games. The virtual world built by the game may be a precursor to the metaverse. On the one hand, games are a subdivision of the content industry; on the other hand, from the perspective of multi-dimensional factors such as technological maturity, user matching, and content adaptability, games are also an excellent way to explore the metaverse.
Guosen Securities said that the game, as the first landing scene in the meta-universe, is expected to continue to improve its valuation and performance, recommending 37 Interactive Entertainment, Perfect World, Gigabit, and paying attention to Zulong Entertainment, China Mobile Game, Century Huatong and other targets.
Text: Rainbow bean