Microsoft`s Acquisition of Activision Blizzard: The Shift to Become a Gaming Powerhouse?
| Case Code: BSTR676 Case Length: 14 Pages Period: 1997-2024 Pub Date: 2024 Teaching Note: Available |
Price: Rs.400 Organization : Microsoft Corporation Industry : Technology & Communications Countries : United States Themes: Diversification Strategy, Competitive Strategy, Competitive Environment,Technology Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Microsoft and The Video Game Space
Microsoft had long been interested in the gaming sector. The origins of its interest in gaming can be traced back to the 1980s when the Microsoft Flight Simulator was released in 1982, three years before the company released the first-generation Windows operating system in 1985. Microsoft offered Black and White Chess, a simple puzzle game for users to become acquainted with the complex GUI interface of the Windows system at the time and learn to use the mouse. It was also the first built-in game of the Windows system. Minesweeper and Solitaire later took the place of Black and White Chess as iconic built-in games for Windows 3.0 and later versions..
Microsoft’s Activision Blizzard Deal
On January 18, 2022, speculations about a Microsoft Activision merger started to circulate. However, this was met with resistance since the beginning. Unfortunately for Microsoft, the enormity of the purchase and its impact on the gaming industry caught the attention of numerous authorities, governments, competitors, and organizations worldwide. Both the US Federal Trade Commission (FTC) and the European Commission (EC) filed complaints to stop the transaction, claiming market competition concerns. Sony, the company’s main gaming console competitor and a vocal opponent of the acquisition, was among the first to criticize the proposal. Sony was naturally opposed to the acquisition..
Road Ahead
Microsoft owned both the Xbox console and the Microsoft operating system and absolutely dominated PC gaming, giving the corporation effective control over two different platforms from which to recruit new clients. Though the deal offered immense potential, George Jijiashvili (George), senior principal analyst at research and advisory firm Omdia, stated that “Microsoft’s success in integrating Activision’s business is not guaranteed, especially as its track record with acquisitions has been a mixed bag.” Another hurdle for Microsoft would be addressing the staffing issues that had plagued Activision prior..
Exhibits
Exhibit I:Market Share of Game Console Operating Systems Worldwide (2012 to 2022)
Exhibit II: The Gaming Industry (1970 – 2020)
Exhibit III: Major Videogame Developers
Exhibit IV: Microsoft’s Growing Gaming Ambitions
Exhibit V: Top Countries and Markets by Video Game Revenues (as on 2022)
Exhibit VI: Activision Blizzard Gaming Series owned by Microsoft
Exhibit VII: Microsoft’s Competitors
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