Microsoft CEO Talks Activision Deal, “Even with Activision Blizzard, We’ll Be Number Three”

Microsoft CEO comments on the recent Activision deal.

In an interview published on Wednesday in the Financial Times, Microsoft CEO Satya Nadella made his first remarks following the company’s acquisition of Activision Blizzard.

Last month, Xbox’s parent company revealed its intentions to acquire the company in an almost $70 billion deal–the game industry’s most costly acquisition to date by far. Giving Microsoft ownership of major franchises like Call of Duty, Warcraft, Overwatch, and Crash Bandicoot, the company stated that the move would “accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse”.

Nadella further explained his vision for the metaverse in the new interview. “Metaverse is essentially about creating games. It is about being able to put people, places, things [in] a physics engine and then having all the people, places, things in the physics engine relate to each other. You and I will be sitting on a conference room table soon with either our avatars or our holograms or even 2D surfaces with surround audio. Guess what? The place where we have been doing that forever . . . is gaming,” he said.

“The way we will even approach the system side of what we’re going to build for the metaverse is, essentially, democratize the game building . . . and bring it to anybody who wants to build any space and have essentially, people, places, [and] things digitized and relating to each other with their body presence.”

This led to Nadella’s explanation of what a ‘new internet’ means. “To me, just being great at game building gives us the permission to build this next platform, which is essentially the next internet: the embodied presence. Today, I play a game, but I’m not in the game. Now, we can start dreaming [that] through these metaverses: I can literally be in the game, just like I can be in a conference room with you in a meeting. That metaphor and the technology . . . will manifest itself in different contexts.”

Recently, it was reported that the Federal Trade Commission would be reviewing Microsoft’s acquisition, which is scheduled to close in 2023. The CEO explained that even after the deal goes through, it would still be the third-largest company by revenue, behind Tencent and Sony.

“The analysis will have to extend to say ‘why are these content companies trying to become bigger?’ It’s because the place where the constraints really are is distribution,” Nadella said.

“The only open distribution platform for any gaming content – guess what? – is Windows. The biggest store on Windows is Steam. It’s not ours. People can do any payment instrument, whereas all the other gaming distribution platforms are closed.”

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