If Microsoft’s acquisition of Activision goes ahead, competitors will not be able to remain indifferent, but it’s not certain that gamers will benefit.
By: Eli de Bar
In recent years we have seen a lot of interest in the gaming industry, an interest that has grown from the outbreak of the corona plague in which this industry has prospered due to most people staying at home and their need to find employment, which has led to much interest in this industry from various technology companies. Also, the volume of mergers and acquisitions in the gaming world in 2021, broke records when the total number of transactions announced or completed last year was about $ 71 billion – twice as much as in 2020 as a whole.
In the last year alone, we have witnessed some significant and particularly large acquisitions in this industry, such as the Israeli company Pleitika, which acquired 80% of the Finnish company Reworks for $ 400 million – and is expected to acquire the rest of the company for $ 200 million next year. $ 1 billion, Take Two Interactive’s acquisition of mobile gaming company Zynga for $ 12.7 billion and yesterday Microsoft’s acquisition of leading gaming company Activision Blizzard was reported for about $ 70 billion – the largest acquisition in the history of high-tech. A deal of this magnitude, in cash, is without a doubt and by all accounts a huge one, even for a giant company like Microsoft. This is a very significant deal that gives a clear directional reading ahead for the future in this industry.
The rapid pace of acquisitions indicates that none of the players in the market are resting on their laurels, and they understand that the gaming industry is a very influential industry on the high-tech industry and the entertainment industry in particular, therefore, an acquisition like Microsoft is a clear statement on future -Gaming. Microsoft chose to acquire a leading company in the field of gaming, and in this transaction defined the high value / multipliers of the gaming field for the future.
This is said to be the largest acquisition in the gaming industry, which is likely to attract the attention of regulators around the world. It is known that Microsoft has been burned in regulatory issues in the past and this transaction is no less problematic, so there is a chance that it will encounter difficulties on the part of the regulator whether in canceling the transaction or imposing restrictions on it. The parties involved in the transaction also understand the risk in the regulatory aspect, as as part of the purchase agreement, Microsoft will pay $ 3 billion as payment to Activision (in cash) in case the regulator does stop the transaction.
One of the issues that can raise the regulators and they will have to consider is that after the merger with Activision, Microsoft will become a very strong force in this industry, and there is a risk that it will exploit it to override competitors like Sony, for example if Microsoft decides that now all Activision content The platforms will only be available to Microsoft customers. Sony has already expressed its “hope” that Activision games will remain available on its platform as well, but other than hope – it does not seem to have much to do.
Plus, with the acquisition of a huge studio that spans all platforms, plus with the Xbox Gamepass, the threat to Sony is much greater. So in order for Sony to remain a leader, it will have to consider acquiring companies from the gaming world and paying high sums to stay relevant. For example, a company that may be aiming for a purchase like Valve, is not detached from reality.
But at the same time, it’s important to address one of the salient advantages of this deal and that is Microsoft’s entry into content worlds outside of consoles. This is a huge advantage that will lead to the exposure of the content to gamers on all platforms (both computer and mobile) and is another sign that the company has a clear strategy of long-term entry into the gaming industry as a leading player.
If and when this deal goes through, competitors will have to make moves to compete, and it is known that competition is fierce but relatively healthy. In the world of gaming, anyone with a computer, determination and talent can create the next international hit – therefore, the giant companies should not be too complacent, even after they have conquered the summit.
The author is the CEO of AP Technologies
Guest reporter
We occasionally host guest technologist writers, who publish articles in their areas of expertise. If you are interested in publishing a post on your behalf, contact us using the contact form on the website.
