The declining quality of its products was not the only thing that bothers him. One gamer, Chris Nobriga, told the Times that after playing World of Warcraft for over 11,000 hours, he lost interest as popular developers left Activision and the company reused in-game systems. That’s what gamers think Microsoft will do, according to the New York Times. Perhaps the most important way that this deal would make the combined companies better off is how Microsoft would improve its products. How so? Although Activision games run on all top gaming platforms - including Sony’s PlayStation - Microsoft could give its own system preferential treatment for the release of popular games such as Call of Duty, noted MarketWatch. The deal could also boost the market share of Microsoft’s Xbox gaming platform. Were the deal to close, Microsoft would trail Tencent and Sony to be the third largest videogame player globally - including consoles and software, according to the MarketWatch. and adding Activision’s 10% share would boost give the combined companies a 33.9% share - nearly four times that of Nintendo with 9% share (currently ranked third in the industry), according to IBISWorld. Redmond already controls 23.9% of the videogame software market in the U.S. No doubt it would help Microsoft to dominate the videogame software industry. It is unclear how much metaverse market share this deal would give Microsoft. This deal would likely increase Microsoft’s videogame industry market share. While it is little more than a dream right now, Constellation Research “estimates the metaverse economy will be worth $21.7 trillion by 2030, with a compound annual growth rate of 38.6%, as businesses increasingly leverage a mix of augmented and virtual reality to reach customers via avatars, bots and other digital surrogates,” according to the Wall Street Journal. Deloitte Global predicts that in 2022 the gaming console industry will grow 10% to $81 billion. ![]() is forecast to grow at a 5.6% annual rate by 2026 and enjoyed a 27.5% net profit margin in 2021, according to IBISWorld. This deal is aimed at increasing Microsoft’s share of three industries - two of which are very large and growing rapidly and one which is currently attracting significant investment from leading tech companies: I think Microsoft’s deal to acquire Activision has a decent chance of passing all of them. But the ones that succeed pass four tests. Indeed Cowen analysts said this means that “the market appears to be pricing in a roughly 1-in-3 probability that the deal gets blocked,” reported MarketWatch. If Microsoft wants to bet on the metaverse, it should invest in new technology, not swallow up a competitor.”Įvidence that this deal may fall apart is reflected in Activision’s stock price which trades at 87% of Microsoft’s $95 a share in cash offer. Department of Justice permit this merger to proceed. “No way should the Federal Trade Commission and the U.S. Alex Harman, competition policy advocate for Public Citizen, told MarketWatch. ![]() Moreover, some analysts are calling for government regulators to block the deal. Indeed, Cowen analysts do not think Microsoft’s gaming platform rivals will take comfort from Microsoft’s statement that ”Activision Blizzard games are enjoyed on a variety of platforms, and we plan to continue to support those communities moving forward,” wrote MarketWatch.
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