When Microsoft paid nearly $70 billion for Activision Blizzard last month, CEO Satya Nadella was keen to include the metaverse in his remarks. “We see the metaverse in gaming as a collection of communities and distinct identities grounded in powerful content franchises accessible on every platform,” added Nadella. In its announcement, the business also stated that the transaction would “supply building pieces for the metaverse.”
But it was unclear where Nadella saw the relationship between establishing the metaverse and buying a number of game studios and a vast inventory of intellectual property in Activision Blizzard. Nadella attempted to clarify his thoughts in an interview with the Financial Times.
“Metaverse is really about making games,” the Microsoft CEO remarked, comparing virtual meetings to video games in terms of concepts and technology. “It’s about being able to put people, places, and things in a physics engine and then having all of those people, places, and things interact with one another.”
“You and I will be seated at a conference table with our avatars, holograms, or perhaps 2D surfaces with surround audio in the near future.” What’s more, guess what? Gaming is where we’ve been doing that for a long time […].
“As a result, we’ll tackle the system side of what we’re going to build for the metaverse in a way that fundamentally democratises game creation.” Investing in game technology and tools makes sense in this context. But what does it matter whether you own StarCraft and Crash Bandicoot? When asked what he expects people to do outside of gaming “within this intellectual property that Microsoft is paying so much for,” Nadella mentioned the social and cultural aspects of Forza Horizon 5, a game that is ostensibly simply about racing cars.
“Consider how we can present the storey of car racing via a cultural perspective,” Nadella suggested. “Our entire new game is around Mexico, the Mexican location, and vehicle racing […] You imagine that “my avatar in Forza” is my automobile, and you imagine how I adorn it. “I believe that simply being good at game development allows us to establish this next platform, which is effectively the next internet: the embodied presence.” I’m playing a game today, but I’m not in it. Now we can begin to imagine [that] through these metaverses: I can physically be in the game, just as I can be in a meeting room with you. That metaphor, as well as the technology, will appear in various contexts.”
Microsoft’s acquisition of Activision Blizzard will be scrutinised by regulators, according to the interview. Concerns that it would be rejected on monopolistic grounds were rebuffed by Nadella, who pointed out that it would only make Microsoft the world’s third-largest gaming firm by revenue, behind Tencent and Sony.
“At the end of the day, all of this analysis has to be done through the prism of what category we’re talking about and what market structure we’re talking about.” Even with this acquisition, we’ll be number three with a low teens [market] share, where even the biggest company has a market share in the teens. It demonstrates how disjointed the platforms for content generation are. As a result, that is the primary category. Yes, we will be a major player in a highly fragmented environment.”
