Microsoft’s purchase of Activision Blizzard gives it the clear lead in the metaverse

Activision games being sold in a New York store.
Activision games being sold in a New York store.
Image: Reuters/Carlo Allegri
We may earn a commission from links on this page.

Microsoft’s plan to acquire Activision Blizzard for $68.7 billion is the biggest deal in the space since the tech industry collectively shifted its attention to the metaverse in 2021.

Previously, Meta—formerly Facebook—appeared to be the standard-bearer, with its Oculus virtual reality platform and augmented reality development work targeting its billions of Facebook and Instagram users. But now that Microsoft has added Activision Blizzard’s large roster of popular game titles like Call of Duty, World of Warcraft, and Overwatch to its Azure cloud, the deal immediately gives Microsoft the edge in the next phase of gaming and the virtual assets that populate the various game environments. 

“The fantastic franchises across Activision Blizzard will…accelerate our plans for Cloud Gaming, allowing more people in more places around the world to participate in the Xbox community using phones, tablets, laptops and other devices you already own,” Microsoft Gaming CEO Phil Spencer said in a statement on Tuesday. 

Cloud services, which provide high-speed access to software applications regardless of location, are among the pillars of the emerging metaverse and its growing array of VR and AR devices. As of now, two of Microsoft’s primary consumer-facing cloud competitors of note are Google Cloud and Amazon Web Services, neither of which has a significant internal foothold in gaming. The acquisition also means that Microsoft will likely revisit the cloud deal Activision Blizzard signed with Google Cloud in 2020, with Microsoft’s Azure cloud product the probable beneficiary. 

The Activision Blizzard deal will also bring a huge new audience to Microsoft’s Game Pass, which already has 25 million subscribers. Currently, Call of Duty, the studio’s most popular game franchise, has roughly 100 million players. 

“Upon close [of the deal], we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog,” Spencer said. 

The deal locks in the content engine for Microsoft’s metaverse future

In previous years, Microsoft’s gaming efforts have had mixed success with its attempts to compete with consoles like Sony’s PlayStation console and game studios like Electronic Arts (EA), Nintendo, and Epic Games. With the acquisition of Activision Blizzard, Microsoft immediately becomes one of the most important players in the content portion of the gaming space. 

So far, Activision Blizzard’s footprint in the VR realm has been mostly experimental, with one notable experience being the Call Of Duty: Infinite Warfare Jackal Assault VR experience, which was released a few years ago for PlayStation VR users. Although Spencer touched on the metaverse in 2021 as an area of focus, he declined to confirm any VR plans. 

“I want to be able to experience the things I own on any screen that can render those,” Spencer told Protocol, a tech news site. “I want to be able to have the experiences I have anywhere… and it requires a lot of cloud infrastructure to make that happen.”

Despite the dearth of VR content from its new acquisition, Microsoft has been at the forefront of supporting the VR space on the hardware end through its wide-ranging Mixed Reality line of headsets and partnerships. That foothold in VR offers an easy path toward merging Microsoft’s existing metaverse interests with the more traditional gaming fare of Activision Blizzard. 

As the next phase of the internet gradually unfolds in VR and AR, Microsoft’s newly robust entertainment profile and deep work in immersive platforms will give it the advantage as gaming moves from screen-based interactions to immersive experiences.