Microsoft’s Activision Blizzard Acquisition Could “Build The Next Internet”

Microsoft CEO Satya Nadella made a pretty bold comment (but was pretty self-critical of their position games industry in the process!).


In an interview with the Financial Times, Nadella said that if they can buy Activision Blizzard, it will strengthen their motivation to build “the next internet”. So Microsoft also wants a metaverse, which is a three-dimensional network of virtual spaces where users can socialise, play and work. It could even be the successor to the mobile internet.

Nadella says, “Metaverse is essentially about creating games. It is about putting people, places, things [in] a physics engine and then having all the people, places, items in the physics engine relate to each other. You and I will be sitting on a conference room table soon with either our avatars or our holograms or even 2D surfaces with surround audio. Guess what? The place where we have been doing that forever is gaming.

And so, the way we will even approach the system side of what we’re going to build for the metaverse is, essentially, democratise the game building and bring it to anybody who wants to make any space and have essentially, people, places, [and] things digitised and relating to each other with their bodily presence.”

During Microsoft’s Ignite 2021 conference in November, Nadella described franchises like Halo, Minecraft and Flight Simulator as their metaverses. “In some sense, they are 2D today, but the question is, can you now take that to a full 3D world, and we plan to do so,” he said. Continuing on FT, he added, “To me, just being great at game building permits us to build this next platform, which is essentially the next internet: the embodied presence. Today, I play a game, but I’m not in the game. Now, we can start dreaming [that] through these metaverses: I can be in the game, just like I can be in a conference room with you in a meeting. That metaphor and the technology will manifest themselves in different contexts. Another one would be in the context of a very different business process. If you look at retail or construction, that’s like when you create a digital twin: you have a factory, and you are trying to visualise how to simulate its operation. That’s also a game-playing exercise, except you’re not game playing. You’re trying to simulate how a factory functions.”

Microsoft’s Activision Blizzard acquisition will be overseen by the FTC (Federal Trade Commission) and could even cut Microsoft out of the deal (too much of a monopoly could be a reason). Even so, Nadella says they would still be only the third largest-revenue company behind Tencent and Sony. “At the end of the day, all the analysis here has to be done through a lens of what’s the category we’re talking about. And what about the market structure? Even post-this acquisition, we will be number three with sort of low teens [market] share, where even the highest player is also [in the] teens [for market] share. It shows how fragmented content creation platforms are. And so, that’s the fundamental category. Yes, we will be a big player in a highly fragmented place.

Also, the analysis will have to extend to say, ‘why are these content companies trying to become bigger?’ It’s because the place where the constraints are is distribution. The only open distribution platform for any gaming content – guess what? – is Windows. The biggest store on Windows is Steam. It’s not ours. People can do any payment instrument, whereas all the other gaming distribution platforms are closed. To some degree, that’s why we are very hopeful that, by becoming stronger, even with low share, we can create more distribution for many small players, using things like xCloud,” Nadella said.

Phil Spencer, the Xbox boss, will be presented with a Lifetime Achievement Award by Todd Howard at the 25th Annual D.I.C.E. Awards. The AIAS (Academy of Interactive Arts & Sciences) confirmed that Spencer would receive the award during the ceremony at the Mandalay Bay Resort in Las Vegas. “Phil Spencer has demonstrated both passion and leadership throughout his entire career at Microsoft. He’s responsible for countless impactful and pivotal initiatives that have reverberated throughout the gaming industry. On behalf of the Academy’s Board of Directors, we are looking forward to celebrating Spencer’s important impact on video game history by presenting him with our Lifetime Achievement Award,” said Meggan Scavio, AIAS’ president.

Congratulations. Previous Lifetime Achievement award recipients include Minoru Arakawa, Howard Lincoln, Ken Kutaragi, and Satoru Iwata.

Source: VGC, VGC, VGC

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Anikó, our news editor and communication manager, is more interested in the business side of the gaming industry. She worked at banks, and she has a vast knowledge of business life. Still, she likes puzzle and story-oriented games, like Sherlock Holmes: Crimes & Punishments, which is her favourite title. She also played The Sims 3, but after accidentally killing a whole sim family, swore not to play it again. (For our office address, email and phone number check out our IMPRESSUM)

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