Microsoft announced the acquisition of iconic franchises including Activision Blizzard and King Studios, such as Warcraft, Warcraft, and King Studio, at a price of $95 per share, totaling $68.7 billion (about 436.245 billion yuan). Diablo, Overwatch, Call of Duty and Candy Crush Saga, as well as global esports events through Major League Baseball. In order to complete the deal, Microsoft will use 53% of its cash reserves, which is equivalent to 3% of the company’s valuation. This is also the largest acquisition in Microsoft’s 46-year history. If the acquisition is approved, the combined Microsoft will become the world’s third largest game company after Tencent and Sony, ranked by business revenue.
For Microsoft without a social portal, games have become the key to its entry into the metaverse
While releasing the news of the acquisition, Microsoft said: “This acquisition will accelerate the growth of Microsoft’s gaming business on mobile, PC, consoles and the cloud, and provide the cornerstone for building the metaverse.” The “Metaverse” has always been of great interest. Previously, Microsoft CEO Satya Nadella has made it clear that the Metaverse will have a huge impact on the world, and Microsoft will also deploy a “full stack” strategy. Metaverse. Looking at the world, Microsoft’s biggest competitor is undoubtedly Meta. The latter’s deep roots in the social field are the key to its entry into the metaverse. Microsoft wants to let its own metaverse reach the user side, and games have obviously become the biggest bargaining chip. .
Although the picture looks relatively simple at present, the huge commercial potential of the Metaverse is the focus of the giants
Why is the metaverse so important? Because of its high commercial value, the core point of metaverse games is to give users enough space to play freely. The most representative metaverse game is Cryptovoxels, whose core is “building”, and 20 islands have been developed so far. There are more than 5000 plots of various sizes, and more than 90% of the plots have been sold. These plots have at least 2 streets adjacent to each other, and different communities are formed mainly through the functional division of buildings, including: galleries, headquarters, towers, gardens, private houses, commercial streets, clubs, museums, etc.
Any layout in these scenes is built by the buyer. Players can call friends, build beautiful gardens, private houses, etc. to have a party. They can also go to exhibition halls and galleries to see the latest various NFT paintings. You can directly click on the link to buy any of the pictures, or even go shopping in the commercial street… The biggest difference between the metaverse concept game and the online games we are familiar with is that there is no scripted plot, the story does not even have an end, the player is the All decision makers in this land, from building buildings to later gameplay, are planned by the players’ creativity. For giants such as Microsoft and Meta, transaction feasibility is the most important function. As a display platform, the real-world physical transactions are copied here. Just imagine how Taobao, JD.com, and short video live streaming have developed in their respective eras. The Metaverse is an excellent platform for giants to develop the next business sector.
Last year, Microsoft has absorbed a large number of super game IP
Microsoft’s “money capability” confirms the importance of IP
When Microsoft launched the Xbox game console in 2001, it showed its “money-capable” qualities, such as acquiring Minecraft developer Mojang for $2.5 billion, and last year for $7.5 billion. ZeniMax Media (Bethesda’s parent company), which develops well-known 3A masterpieces such as Doom, Fallout, and The Elder Scrolls, has 23 game studios under Microsoft. The wealthy Microsoft also said that the games acquired this time are all It will be added to the Xbox Game Pass lineup, in other words, Windows and Xbox players can play more than 100 games for only a few hundred dollars a year, including the masterpieces of this acquisition.
In the major player groups, this acquisition has sparked a lot of discussion. In addition to the possibility of new games coming to Xbox Game Pass, the once-bounced big IPs such as Diablo, Warcraft, and Overwatch A sequel to StarCraft or even Age of Empires might really be on the table.
Judging from the current trend, hardware manufacturers are acquiring software studios, while software manufacturers will try their best to strengthen their hardware capabilities. It is not difficult to find a series of key acquisitions by leading domestic and foreign manufacturers in recent years. ByteDance acquisitions Hardware manufacturers Pico and Tencent acquired the gaming mobile phone Black Shark… Different types of giants are looking for complementary sectors from both software and hardware. For Microsoft’s big acquisitions, what they want to solve is that their own game IP is relatively weak. This short board, imagine how amazing the energy it will emit when Microsoft, which holds a lot of classic game IPs, combines it with Xbox Game Pass.
Xbox Game Pass’s bundling mechanics work well on consoles
Continue to spend money to earn the future? The Xbox Game Pass subscription model is worth looking forward to
Last fall, Microsoft revealed that the number of users of the Xbox Game Pass subscription service has exceeded 15 million, and according to Microsoft’s financial report, the actual increase in the subscription volume of the Xbox Game Pass service is 37.5%, so it is not difficult to calculate the approximate size of the Xbox Game Pass user. At 20 million, but even then, Xbox Game Pass hasn’t turned a profit.
Looking closely at the Xbox Game Pass content library, it is not difficult to find that its composition is very simple: it consists of Microsoft’s first-party games, second- and third-tier IPs from first-tier manufacturers, old works of first-tier IPs, plus some small games, of which the most noteworthy. Of course, it is Microsoft’s own works, such as “Forza Motorsport: Horizon 5”, “Halo: Infinite”, “Age of Empires 4”, and “Total War: Warhammer 3”, which will be launched on February 17th, etc., we had a hard time watching it before. The latest signature works of third-party first-tier manufacturers are the first to launch Xbox Game Pass, but after these two consecutive mergers and acquisitions, “New Year’s goods” masterpieces such as “Call of Duty” will likely enter the launch list.
Since Xbox Game Pass doesn’t make money and can always play big games cheaply, what are the prospects for it? In fact, according to data, in the field of game consoles, each player will only start an average of 7 to 8 games in the life cycle of a console. As of September 30, 2021, Switch has shipped 92.87 million units and sold 92.87 million units. There are 681 million games, and one game console corresponds to 7.33 games; as of June 11, 2017, PS4 has shipped 60.4 million units, sold 487.8 million games, and one game console corresponds to 8.04 games. In other words, the vast majority of players can only buy two games a year on average,
Let’s do a simple calculation here. In the usual 5-year life cycle of the console, if the 8 games purchased by the player are all 3A masterpieces of $60, they will only contribute $480 in revenue, but Xbox Game Pass. The original price of the subscription fee is $120/year, which is $600, so Xbox Game Pass is actually profitable. For players, they only need to spend the money of 2 games to buy a one-year Xbox Game Pass subscription service. Not only can they play the 2 games they originally bought before, but they can also play hundreds of other games. This is obviously It is very valuable for players, and it is also the reason why the scale of XGP users can continue to grow significantly.
And this is the charm of bundling sales over the buyout mechanism. It stimulates the demand of players. Originally, they only bought two games to play for a whole year, but now they have more games waiting to experience, so that these users do not know what to do. So the sustainability of Xbox Game Pass is guaranteed, and Sony is planning its own similar bundling plan, so the entire industry is actually positive about it.