Microsoft buying Activision Blizzard, the publisher of games ranging from Call of Duty to Candy Crush Saga, for $68.7 billion yesterday morning.
According to Microsoft, the acquisition would make it the third-largest gaming developer in terms of revenue, behind Tencent and Sony.
The company, which is already a market leader, would acquire even greater control over how games are developed and marketed.
That is, providing authorities allow it, which isn't a given granted a recent effort to investigate potential tech monopolies.
The acquisition of Activision Blizzard by Microsoft is an example of a vertical merger, which occurs when two organizations that provide complementary services join forces, such as when a big telecoms corporation buys a media production company.
In this scenario, it's a prominent game studio combining forces with a major game retailer and system manufacturer.
Because Microsoft already owns multiple first-party game studios, there's also the possibility of a horizontal merger, in which two companies that are directly competing join.
Is Microsoft's acquisition of Activision Blizzard beneficial to gaming?
This could not have arrived at a better time for Activision Blizzard. The corporation, which has been led by CEO Bobby Kotick since 1991, has been the target of multiple complaints of discrimination, sexual harassment, and a toxic workplace culture.
The acquisition also adds over 400 million monthly active gamers to Microsoft's fold, potentially boosting the company's subscription program, Game Pass.
Since its introduction in 2017, the Netflix-for-games service has grown rapidly, adding over a dozen new games to its lineup following the acquisition of gaming company Bethesda in 2021.
As a result of the purchase, the service grew from 18 million subscribers in 2021 to more than 25 million users in January 2022.
For players who aren't interested in Microsoft's Xbox platform, Microsoft's acquisition of a firm that creates games for various platforms could spell trouble.
The popularity of games like Skyrim might be attributed to the fact that they were released on a multitude of platforms, including the PC, Xbox 360, and PlayStation 3.
The 10-year-old game has since been released on every major platform, including the Nintendo Switch.
A Microsoft acquisition might imply that a sequel is only available to Xbox users, mobile device users, or PC gamers running Windows, keeping Playstation and Nintendo console users out.
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