The $68.7 billion deal made between both Microsoft and Activision Blizzard shook the very foundations of the gaming industry yesterday morning. As the news settles and reality takes form once more, several key questions surrounding the deal remain, despite Microsoft's lengthy press release.
According to GamesBeat writer Jeff Grubb, ActiBlizz had silently put itself on the market for quite some time late last year. Although the damaging lawsuits, internal investigations, and employee walkouts were all certainly part of its trepidation, leadership under the company likewise saw key negatives and dwindling drivers behind the ActiBliz portfolio, leading executives to leap at the chance of being acquired under Microsoft in November.
Unsurprisingly, the brand's most lucrative sector has been mobile gaming, wherein King's Candy Crush and Call of Duty Mobile reign supreme. Alone, the former earned ActiBliz a whopping $652 million net revenue in Q3 2021 per financial results. As for the free-to-play CoD Mobile, net bookings grew by 40% year-over-year in the same span of time, relinquishing a little over $30 million for the company by November last year.
It's fathomable then why Microsoft would buy into the defamed brand even with the myriad flaws. But, what made leadership under Activision Blizzard so gung-ho? Fear, obviously. One of the largest and most well-known entities under Activision, Call of Duty, was slowly (but surely) sinking into decay with yearly releases that haven't amounted to much, aside from 2019's Modern Warfare rebranding introduced the free to play Warzone battle royale experience.
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Call of Duty Vanguard, released in November of last year, is a perfect example. Although declared the best-selling PS5/PS4 game of 2021 via NPD group, it still sold for less than its 2020 counterpart Black Ops Cold War. This downward trend, coupled with a limited base player count, proves that ActiBliz was very concerned about the nature and future of the Call of Duty brand, one of the most recognizable IPs in the gaming industry.
Yearly releases simply do not cut it, as experienced best in the traditional annual sports release, such as NBA 2K and Madden NFL. Activision typically would leverage Blizzard as a form of release for gamers in the meantime as they wait for their yearly CoD fix, yet Blizzard has been facing its own internal woes.
From its very outset, World of Warcraft's Shadowlands expansion was met with mixed reception that slowly fizzled into obscurity. Now, WoW (much akin to the CoD fanbase) faces the dilemma of a dwindling player base. Self reflecting on how WoW currently stands, PCGamer's Sarah James relays, "Things are...complicated. World of Warcraft is right in the middle of the expansion cycle, which is never a good time to experience the best the MMO has to offer."
Aside from WoW, which will see a new update titled Eternity's End sometime in the near future, Blizzard likewise wields Diablo and Overwatch. The latter's sequel is still up in the air, as are Diablo's forthcoming releases of Immortal and Diablo 4, all of which stem from the aforementioned walkouts and developers leaving out of pure distaste for the company.
So, while Activision may well have boasted dramatic increases of revenue in certain sectors, there was undoubtedly going to be a drop off at some point within the near future. Call of Duty's next foray, rumored to be Modern Warfare 2, might be the only major experience ActiBliz has to look forward to for Q4.
Under Microsoft, if the nearly $70 billion deal does go through, ActiBliz would have so much more output potential with a real, more substantiated workflow to deal with. Xbox would give ActiBliz a shot via three key sectors: mobile gaming, Game Pass, and metaverse applications. The deal must still undergo a multitude of inspections before it can actually be processed, but it would allow ActiBliz a more dynamic approach to its releases, as well as broadening its foothold in ever-evolving aspects of the industry.
