Microsoft has confirmed that if the proposed merger between Microsoft and Activision Blizzard King is approved, Activision Blizzard King's creative operations will continue to operate independently. The tech giant has assured that it has no intention of disrupting the creative process of Activision Blizzard King, emphasizing its commitment to maintaining the status quo.
The potential merger between Microsoft and Activision Blizzard King has got significant attention within the gaming industry. If the deal is finalized that will undoubtedly reshape the landscape of the gaming market and have far-reaching implications for both companies involved.
Microsoft is known for its service-first model. That is expected to bring its expertise and resources to the table. While this could disrupt Activision's core business model in terms of game sales, Microsoft has reiterated that it intends to respect and preserve the creative process that has made Activision Blizzard King a powerhouse in the industry.
One area of concern revolves around Microsoft's popular Game Pass subscription service. Game Pass has been proven to cannibalize and reduce sales of premium games. Activision Blizzard King, known for its reliance on full game sales, has refrained from participating in value-oriented multi-game subscription services like Game Pass. Call of Duty franchise which has sold over 425 million copies and generated more than $31 billion in revenues. It has been a significant contributor to Activision's success.
Recent success of Diablo IV highlights the potential disruption of subscription-based business model. Diablo IV achieved impressive sales of $666 million within just five days of its release. This accomplishment might not have been possible if the game had been available on Xbox Game Pass from day one.
While the merger with Microsoft will inevitably introduce changes to Activision's business model, the exact extent of the disruption remains unknown. The subscription-based approach may influence how games are made, and it is not uncommon for consolidation to result in layoffs. Microsoft, however, has stated that it intends to be mostly hands-off when it comes to Activision Blizzard King's creative operations.
To illustrate their approach, Microsoft's legal counsel refers to previous acquisitions like Mojang and Bethesda. Both entities were allowed to operate independently within the Xbox Game Studios banner. Microsoft intends to apply a similar strategy to Activision Blizzard King, ensuring that the creative operations remain separate and unaffected by the merger.
While Activision Blizzard King may face challenges in adapting its games to a service-oriented subscription model, the synergies resulting from the merger could also bring substantial benefits to both companies. Service-oriented approach aligns with Microsoft's long-term vision and provides opportunities for innovation and growth.
In a recent legal document that outlines Microsoft's arguments against the FTC's preliminary injunction request, Microsoft attorneys assert that the technology behemoth will maintain a predominantly hands-off approach with regards to the creative operations of Activision Blizzard King. Microsoft's legal counsel provides the example of Mojang to elucidate their position, although it may also be pertinent to include Bethesda in this context. Reports suggest that Bethesda functions as an independently-operated publishing entity within the expansive realm of Xbox Game Studios.
As the proposed merger between Microsoft and Activision Blizzard King progresses, Microsoft has reassured stakeholders that Activision Blizzard King's creative operations will retain their independence. Microsoft aims to respect and preserve the successful creative processes that have made Activision Blizzard King a leader in the gaming industry. While changes are expected in Activision's business model, the full impact remains to be seen. The merger holds the potential to shape the future of gaming, offering both challenges and opportunities for the companies involved.