“There’s absolutely no question that Microsoft is simply in a different league than Sony, at least financially,”Clay Griffin, MoffettNathanson research analyst, shared the following: “In other words, it’s a much more difficult economic decision for Sony”To make a similar purchase.
It is evident from a quick look at the market caps. Microsoft, as a whole, is worth an astounding $2.28 trillion. Sony is valued at $156.59 million and Nintendo at $60.53billion.
Activision Blizzard has a market capitalization in excess of $63.99 Billion, making it more valuable than Nintendo. EA is the market capitalization of EA, maker of top games such as “Madden” “FIFA,”It is $38.72 trillion. Epic Games, maker of “Fortnite,” was valued at $28.7 billion last spring — and is already about 40% owned by Tencent. (Taking-Two announced this month that it had acquired Zynga mobile-game maker Zynga for $12.7 billion. This will give them a combined market capital of almost $29 million.
“In some respect, we have to allow for the fact that this Activision Blizzard/Microsoft deal might just be an opportunistic strategy by Microsoft,”Griffin noted that Activision Blizzard is making an opportunistic deal with Bobby Kotick, its CEO. “Activision Blizzard stock was left for dead, Microsoft has a bottomless checkbook and it gives Activision Blizzard (and Kotick) an opportunity to save face and exit stage left gracefully.”
Kotick has been at the forefront of the company’s troubles. In July, the studio was hit with a civil lawsuit from California’s Department of Fair Employment and Housing, claiming the company was “akin to working in a frat house.” The alleged sexual harassment included inappropriate comments about women’s bodies, rape jokes and unsolicited touching of female employees. The company denied the claims in part and issued a statement to NPR. “The DFEH includes distorted, and in many cases false, descriptions of Blizzard’s past.”
There is one way Sony will likely follow Microsoft’s play. The Activision Blizzard agreement allows Microsoft to increase its Xbox Game Pass subscription service. This means that PlayStation and its other (and some might argue half-heartedly) subscription services can finally compete.
“We are certainly going to see Sony try to harder to compete with Game Pass,”Griffin stated. “That’s been rumored for a while. Theykind ofdo it with their PS+ and PS Now subscriptions, but they’ll need to harmonize those two things and could very well go down the path of offering up their first-party games on launch day included with the subscription.”
Nintendo, which aims its products at kids and families, doesn’t really follow the same playbook as its bigger, better funded rivals. Griffin views the Switch maker “sticking to their knitting”During the Microsoft/Activision, Take-Two/Zynga mergers.
Microsoft’s purchase of Activision, which still needs regulatory approval, will be the company’s largest acquisition ever — and by double. (Microsoft bought LinkedIn in 2016 for $26.2 billion. Microsoft purchased Mojang, a gaming company that makes the popular game. “Minecraft,”ZeniMax Media in 2020, and in 2014.
The Activision Blizzard deal makes tech giant Microsoft the world’s third-largest gaming company by revenue, behind only Tencent and Sony. Griffin believes that Microsoft won’t make Activision Blizzard-like games to maintain this position. “Call of Duty” Xbox-exclusive (like rival shooter “Halo” is). This concept helps to explain why console-makers might be reluctant to buy EA.
EA’s major titles, popular sports games like “Madden” “FIFA,” “need the broadest distribution possible,” Griffin told , so it doesn’t make much economic sense to buy a major studio and cut its revenue potential by two-thirds.
However, not everyone agrees with this statement. “Call of Duty”This deal will not affect the availability of other top Activision titles on PlayStation. Many experts think the deal is bad news to Sony, as Microsoft can help make top games like “Call of Duty,” “Overwatch” “Diablo” Xbox exclusives. “This is clearly an important part of the motivation for the deal,” Cowen analyst Doug Kreutz Write. “Ultimately, we think Microsoft’s goal is to move Activision’s flagship console franchise away from Sony (and other platform competitors like Google or Apple) and thereby improve its competitive position.”
We’ve focused a lot on consoles, though mobile gaming makes up an eye-popping majority — roughly 95% — of gaming revenue these days. And Activision Blizzard’s “Candy Crush”This space is huge.
What is the value of mobile gaming? Take-Two is buying Zynga for $12.7 million and will keep doubling down on its mobile business. Take-Two is most well-known for its mobile side. “Grand Theft Auto”Series, all of “2K”Games, as well “Red Dead Redemption,” “BioShock” and others — all made for traditional consoles. The company also offers mobile games such as “WWE SuperCard,”Zynga’s mobile games are what make it so popular. “Words With Friends” “FarmVille” that are among the industry’s fastest-growing.
Subscription services may be the future of console gaming, much like streaming TV shows and movies. Microsoft’s popular Game Pass product costs $9.99 per month, for which players get access to more than 100 games through PC and Xbox. Game Pass boasts already Around 25 million subscribers as it competes with Sony’s Playstation subscriptions and Nintendo Online. Microsoft is making HoloLens its VR headset more relevant to the metaverse as well as B2B markets.
Although Microsoft might not make all of its shiny new titles available only to its platforms, Diesel Labs’ research suggests there is an opportunity for the company. Half of the people who downloaded these titles were from outside. “Call of Duty”Diesel Labs reports that 25% of Netflix users are avid movie and TV fans. Here are the top Netflix movies they watched. “Army of the Dead,” “Cowboy Bebop” “The Witcher,”Microsoft could have a lot more success in developing other content and forming partnerships, suggesting that the company has great potential. Microsoft is the only tech giant to not have a stake in the streaming battles.
“We are watching tomorrow’s ‘cable bundle’ being built – except today it’s a content bundle which includes video, gaming, sports gambling and subscription content,” Scott Schiller, media professor at NYU’s Stern School of Business, told . “These early-year moves put pressure on companies like Ubisoft and Niantic to align in order to play at scale.”
