At about 9 o'clock Beijing time last night, a thunder caused a stir in the global gaming circle: Microsoft Xbox plans to buy Activision Blizzard for a total amount of about $68.7 billion in cash. If the acquisition is finalized, it will be the largest acquisition microsoft has ever made.
In addition to the game circle, the capital market has also become a stage for this thunder to show its power. Even Wall Street analysts, who are most sensitive to capital manipulation such as mergers and acquisitions, have called it "without warning." Activision Blizzard stock, which was originally depressed due to the company's civil unrest, instantly became the darling of capital, and finally closed at $82.31, soaring 25.88%, after rising more than 32% during the session. For this transaction, Microsoft,d'étated with a relatively stable stock price performance, finally closing at $302.65, down 2.43%.
However, the competition of giants has always been "a few joys and a few sorrows". After the news of the acquisition broke, almost everyone turned their attention to Sony, the biggest rival in Microsoft's gaming business. In addition to the netizens' brain-opening jokes, the capital market also expressed its concerns about the "loser" in its own way.
Record declines, Sony or encounter full encirclement
This morning, Sony stocks opened low and went low, and the intraday decline extended to 13%, the largest one-day decline since September 2014. As of the close, Sony's stock price closed at 12,410 yen, a sharp decline of 12.79%.
After Microsoft announced the acquisition of Activision Blizzard, some public opinion believed that Microsoft's move was "taking advantage of the fire" in the context of Activision Blizzard's workplace scandal. However, from the final acquisition plan proposed by Microsoft, the purchase price of $95 per share is about 45% higher than the stock price of Activision before the announcement, and such a high premium is enough to show the sincerity of Microsoft's acquisition.
If the deal is successfully completed, Microsoft will become the world's third-largest game company in terms of revenue, after Tencent and Sony Interactive Entertainment.
As we all know, Sony's PlayStation and Microsoft's Xbox are the two most important players in the global console market. The similarity in function makes exclusivity and time-limited exclusivity the most important moats of the two camps. According to statistics, Activision Blizzard holds 36 heavyweight IPs such as "Call of Duty", "World of Warcraft", "Overwatch" and so on, and the works that have previously landed on the host platform are all "rain and dew". After the news of the acquisition broke, Spencer, Microsoft's head of gaming, told Bloomberg: "I just want to say to players who play Activision Blizzard games on the Sony PS platform that we have no intention of keeping the community away from the platform, and we remain committed to that." ”
It's worth noting, however, that Spencer made similar remarks before Microsoft Xbox acquired Bethesda's parent company Zenimax for $7.5 billion. Although existing B games such as The Elder Scrolls Online remain in operation on the PS platform, Microsoft has decided to make the big works in development such as The Elder Scrolls 6 and Starry Sky become exclusive games for Xbox and PC.
In addition, Spencer has also said that one of the important reasons for the acquisition of B is to provide exclusive games for Microsoft's Xbox Games Pass service. After yesterday's acquisition news, the official first confirmed that Activision Blizzard's games will join XGP, and the total number of XGP users has since exceeded 25 million, and it is expected to generate $4 billion this year.
In addition, it is worth mentioning that Activision Blizzard's IW, Raven Software, Sledgehammer and other well-known studios will also be included in Microsoft's pocket with this transaction, so far, Microsoft's first-party studios will be expanded to more than 30. What worries Sony even more is that those European and American manufacturers that are still "free" are also getting closer and closer to Microsoft.
Ubisoft EA shares are all up, and only Sony is injured.
EA and Ubisoft, which are also known as the three major game companies in the European and American markets, and Activision Blizzard, both rose against the market yesterday. In the context of the overall decline in European and American stock markets, Ubisoft shares closed at 50.44 euros, a sharp rise of 11.87%, and EA shares closed at $133.91, or 2.66%.
Just today, Microsoft announced games that will join the XGP subscription service in late January 2022, with EA's Rainbow Six: Xeno and SE's Killer trilogy all on the list. Earlier, on January 6, following the pace of EA Play and XGP subscription integration, "Ubisoft+" also officially landed on Microsoft's Xbox platform. Coupled with the acquisition of Activision Blizzard, the popular games under the three major game companies have essentially become the "killer" of XGP.
In contrast, Sony's actions seem to have been much slower. At the end of December, Bloomberg reported that Sony was planning to create an XGP-like subscription service, code-named Spartacus, in response to stiff competition with Xbox, which could be launched this spring.
Prior to this, Sony has always had doubts about the business model of the subscription business, and Jim Ryan, president and CEO of Sony Interactive Entertainment, has said that the modern AAA masterpiece is often tens of millions, or even hundreds of millions of dollars in production costs, and the subscription model cannot be returned. Therefore, Sony's previous subscription service has always had the problem of insufficient number of games, especially the number of high-quality games. After XGP, EA, and Ubisoft's subscription services have achieved great success, Sony has only "made up for it" at this time, and it remains to be seen whether it is too late.
At the same time, Nintendo, the third force in the console market, is quite indisputable. In early trading this morning, Nintendo shares rose slightly, and then suffered from the overall weakness of the Japanese stock market, and finally closed at 53290 yen, a slight decline of 0.22%. In fact, as early as 20 years ago, when Microsoft first established the Xbox business unit, it had extended an olive branch to Nintendo, which was "very bad hardware", hoping to join forces to block Sony PS through the model of "Microsoft hardware + Nintendo software". However, Nintendo's top brass rejected Microsoft's acquisition proposal with "one-hour ridicule".
Today, Nintendo's console performance is still far inferior to Microsoft and Sony, but with the differentiated game category, the Switch still achieves sales of more than 100 million, while the Sony PS5 and Microsoft Xbox X|S are estimated to have less than 20 million units for lifetime sales. Judging from the reaction of the capital market, Microsoft's acquisition of Activision Blizzard will not have much impact on Nintendo. From the perspective of XGP's operating strategy, third-party game manufacturers such as EA and Ubisoft will not be alienated by Microsoft because of this acquisition. As for Tencent, the world's largest game company, its business focus is not on the console market. From this point of view, this merger seems to have really created a "world where only Sony is injured".
In addition to the console battle, Microsoft has greater ambitions
After the news of the acquisition came out, from the melon eaters to the analysts, many people were "advising" Sony, trying to help the "biggest loser" find a way to break through. Playing "banknote capabilities" with Microsoft became the most mentioned initiative. Among them, Sony also pointed out the clear acquisition targets - the three major Japanese game manufacturers SE, Konami and Capcom.
For such a suggestion, it is not difficult to understand its original intention. For Sony, the Japanese market can be described as a "reserved land". According to shared statistics from Famitong and GamesIndustry.biz, in 2021, Sony sold 942798 PS5 consoles in the Japanese market, while Microsoft only sold 95598 Xbox X|S consoles. Even Sony's previous-generation console, the PS4, sold more annually than the Xbox X|S.
Echoing this, Japanese manufacturers are highly "loyal" to the PS platform. SE's generation of gods, Final Fantasy 7, is a model of the mutual achievement of the game and the console. The game, which was originally planned to be launched on the Nintendo 64 platform, was released on the PS platform because the latter could not support the storage capacity required for 3D, which also fed back the sales of the PS, and was evaluated by the media as "the game that made the PS sell well". In 2015, SE released the PS4 exclusive Final Fantasy VII remake.
The IP such as "Silent Hill", "Metal Gear Solid", "Pro Evolution Soccer" and Capcom's "Monster Hunter", "Resident Evil", "Street Fighter" and other IP are also very globally competitive IP for Sony, if they can be pocketed, it will not only consolidate its advantages in the Japanese market, but also help to start a head-on confrontation with Microsoft in the European and American markets.
However, GameLook believes that such a proposal is somewhat idealistic. On the one hand, judging from the products and acquisitions of the three Japanese game manufacturers in recent years, they all have a clear global tendency, and the traditional Japanese game elements represented by JRPGs are gradually decreasing, replaced by open worlds, large maps and a more global art style. Therefore, "geopoliticality" is not a reason why these companies are willing to be acquired by Sony.
On the other hand, the confrontation with Sony is certainly an important reason for Microsoft's acquisition of Activision Blizzard, but this acquisition also buries Microsoft's greater ambitions. Commenting on the acquisition, Microsoft Chairman and CEO Nadella said ambitiously: "Gaming is the most dynamic and exciting area of all-platform entertainment today, and will also play a key role in the development of meta-universe platforms."
With the finalization of this acquisition, Microsoft has formed a perfect closed loop of the whole industry chain from game console hardware to software production, distribution and cloud, which also means that its layout in the field of game meta-universe has surpassed other Internet giants. At the Ignite conference held in November last year, Microsoft released a version of the Microsoft Teams chat and conferencing app with avatar function.
From business offices to gaming entertainment, Microsoft has quietly drawn a huge metaverse blueprint. Whether it is Sony or Meta (Facebook), Apple or Google, it is difficult to compete with Microsoft's layout in the metaverse field in a short period of time. It's not hard to understand why some analysts boldly predicted that the merger would increase Microsoft's market capitalization by another $1 trillion.
So rather than creating a "world where only Sony is hurt," The acquisition is about Microsoft opening a "door to the all-scene metaverse." Including Sony, how all the giants who aspire to expand their territory in the meta-universe will respond to the challenges brought by this thunder will also be one of the most anticipated topics in the Internet community in 2022.