Xbox Boss Reveals Strange Reason Why Microsoft Bought Activision Blizzard
As Microsoft's controversial acquisition of Activision Blizard continues to play out, Xbox's Phil Spencer reveals the interesting origins of that blockbuster deal.
Activision Blizzard is currently under investigation following accusations of harassment, discrimination, and fostering a hostile work environment. You can read more about the investigation here.
Most of us probably assumed the answer to the question “Why did Microsoft buy Activision Blizzard?” was “Money.” While that assumption isn’t strictly wrong, the specific reason why Microsoft decided to add Activision Blizzard to Xbox’s growing war chest of studios is a bit…strange.
“The biggest gaming platform on the planet is mobile phones,” says Head of Xbox, Phil Spencer, in an interview with Bloomberg. “One and a half billion people play on mobile phones. I guess, regretfully as Microsoft, it’s not a place where we have a native platform. As gaming, coming from console and PC, we don’t have a lot of creative capability that has built hit mobile games…but we really started the discussions, internally at least, on Activision Blizzard around the capability they had on mobile, and then PC with Blizzard. Those are the two things that were really driving our interest.”
In some ways, Microsoft’s logic is perfectly understandable. Mobile gaming is indeed an ever-growing industry that already makes up the majority of many major gaming studios’ revenue. There’s a lot to be said about the pitfalls of the mobile gaming industry in terms of creative standards and business practices, but you can’t deny that industry’s growth. Mobile gaming is a massive money maker that many companies continue to invest more and more in.
No, what’s really strange about Spencer’s statement is the idea that the Xbox team felt that their current mobile gaming potential was lacking and that their primary interest in completing the biggest (and most controversial) acquisition in gaming history involved Microsoft’s desire to expand their mobile gaming offerings in such an immediate and significant way.
Granted, Xbox’s current mobile gaming offerings are not particularly impressive. With the notable exception of the mobile version of Minecraft (another high-profile Xbox acquisition), many of the mobile games published by Xbox have to be considered failures. In fact, a few of those mobile games that were even based on popular Xbox properties (Gears Pop!, Forza Street, and Age of Empires: Castle Siege) have since had their servers shut down.
Still, you’d think that Microsoft could get one of their world-class studio partners to make a few mobile titles for considerably less than the nearly $70 billion it cost them to acquire Activision Blizzard. At the very least, you’d think they’d maybe be more interested in putting some of that money into those cloud gaming projects that they’ve touted as the future of the industry.
In the present, though, Activision Blizzard does have quite a lot to offer in the mobile arena. Call of Duty‘s mobile titles regularly make an absurd amount of money, and even Diablo Immortal is shaping up to be a revenue monster despite its many, many problems. Of course, there’s always the somewhat silent “third part” of the Activision Blizzard empire: Candy Crush developer, King. Quite a few insiders speculated that King may be as appealing (if not more appealing) to Microsoft than Activision and Blizzard were. While that might be a bit of a stretch, it certainly sounds like it was easier for the Xbox team to sell Microsoft on this acquisition by using Activision, Blizzard, and King’s incredible mobile revenue potential as a jumping-off point.
I also find it kind of interesting that Spencer seems to be suggesting that it is more appealing to acquire an established name within a certain space (no matter what the cost) than it is to try to enter that space from the cold through original (or relatively original) creative efforts. The reason I bring that up is that there happens to be a debate playing out at the moment regarding whether or not Call of Duty has an effective monopoly over a certain part of the industry.
PlayStation representatives have previously argued that it would be difficult (if not impossible) for them to make a Call of Duty competitor that could realistically compete with CoD‘s name value. In a way, Microsoft seems to be saying something similar when it comes to mobile gaming. Nearly every major game franchise may have started with an original idea, but for the moment, it’s fascinating to see so many major companies across so many industries treat ideas like this finite resource and franchises as these unbreakable monuments.
Ultimately, we’ll see how the Activision Blizzard acquisition plays out when (and if) the deal is finalized. With PlayStation recently confirming that they intend to expand both their mobile and PC gaming efforts, though, history may show that Microsoft was right to make a big move to make a major push in both those areas sooner rather than later.