Microsoft is going ahead with its plan to acquire Activision-Blizzard but the move will first need to overcome objections of the Federal Trade Commission. Biden anti-trust enforcers are already hard at work trying to unravel one of the largest mergers ever to take place in the U.S.in their efforts to avoid Microsoft expanding its monopoly over the video gaming industry - and here we're on the lookout what this could mean for our own Vegas casino online real money games.
Deal
In a deal worth $68.7 billion, Microsoft acquired the video games giant Activision Blizzard in January and in April the deal was approved by Microsoft’s shareholders. The merger emphasizes the value that the industry puts on gaming franchises like Activision’s Candy Crush, Overwatch and World of Warcraft as well as the advertising opportunities that these franchises represent.
Last year Activision Blizzard was rocked by allegations that women employees were subjected to constant and consistant sexual harassment -- including an alleged rape of a woman by her supervisor -- unequal pay and threats of retaliation for speaking out.
The company was sued by the California Department of Fair Employment and Housing (DFEH) and this March the company settled the federal sexual harassment lawsuit with an agreement to pay $18 million in fines, to establish a "zero tolerance" harassment policy and end the policy that required arbitration of sexual harassment and discrimination claims.
Activision Blizzard CEO Bobby Kotick was accused of discrimination and internal malpractice and he has been under immense pressure to resign but as of now he has not yet done. It was, in fact, Kotick who orchestrated the deal with Microsoft.
Accusations of Monopoly
The announcement of the agreement between Microsoft and Activision Blizzard has led to accusations that Microsoft will be moving forward in becoming a monopoly in the gaming world. If the merger goes through, Microsoft will have access to a greater suite of mobile titles.
This comes at a time when the mobile gaming industry is the fastest-growing sector of the entertainment industry’s most profitable sector and when the giants are gobbling up many of the smaller studios at a steady clip.
Activision Blizzard would probably not have considered the buy-out a mere two years ago. But the sexual harassment allegations were a huge blow to the company.
That combined with another scandal one of their biggest franchises, World of Warcraft, was losing a large percentage if players due to a toxic player base in which WoW players trolled, insulted, mocked and raged their way through the game. The low price at which Microsoft acquired Activision reflects the company’s weakened position – that low price will certainly be a focus of a good part of the FTC’s impending investigation.
Netflix for Gaming
For years, industry insiders have been saying that it’s almost certain that a subscription-like service, similar to Netflix, is almost certainly in the future for the gaming world. Many observers believe that the Microsoft acquisition of Activision Blizzard is the beginning of that move.
NJ Widomska, founder of specialist gaming agency YrsTruly, noted, “As part of the acquisition, Microsoft bought King, the developer and publisher of Candy Crush and one of the largest F2P mobile gaming companies in the world. It’s not an area that Microsoft has shown much interest in in the past, so it’s too early to predict what they may do with King. But it’s important to keep in mind that Microsoft itself is already redefining the gaming market with Xbox Game Pass, its affordable subscription model…”
Widomska believes that, “In a nutshell, it can be described as Netflix for gaming – and in a market where new games often cost over £50, it’s proven quite popular. Xbox Game Pass, as a centralized marketplace for games, could certainly prove to offer opportunities to marketers in the future. For now, we just need to wait and see – and it’ll be quite the wait, as the deal is expected to close in 2023.”
Control
For marketers, having Microsoft control such a huge share of the market would be a dream come true. Microsoft would have billions of gamers at their beck and call making it much easier for marketers to reach a much larger population with less effort through centralized strategies.
Matthew Warneford, founder of the Dubit gaming studio that makes games for the metaverse, "The under 30's watch 60% less TV than they did a decade ago. Our Dubit Trends data shows kids now spend more time in games than watching online video. To that end it's not surprising that gaming companies are becoming hugely valuable assets to own."
Sony is already feeling the impact of the deal. The threat that many popular series would become exclusive to Xbox Series X, the PC and other Microsoft platforms is of concern to Sony which would be left out in the cold if the deal goes through.
An expanded Microsoft would also be able to optimize mobile free-to-play which has been growing steadily over the last few years. Jeff Sue, general manager of Americas at Mintegral says that acquiring free-to-play games with different demographics and in different genres will be an invaluable tool for cross-promoting audiences.
Satya Nadella, chairman and chief exec of Microsoft sees the recent deal as moving forward gaming in the metaverse and even play a key role in the development of metaverse platforms.
