Mobile game

Microsoft’s plan to launch mobile game app store reframes Activision-Blizzard deal – GeekWire

(image of the king)

As Microsoft’s pending $68.7 billion acquisition of Activision Blizzard continues to be investigated in the UK, new documents reveal Microsoft’s plans for an app store. new generation that will allow it to enter the $85 billion mobile gaming market.

Microsoft is currently in the midst of a Phase 2 investigation by the UK Competition and Markets Authority, as announced in early September, into concerns over Activision Blizzard’s prominence in the international video game industry.

In its initial Phase 2 submission earlier this month, as reported by The Verge, Microsoft outlined several benefits it derives from acquiring Activision Blizzard. This included the reveal that it planned to build a “new Xbox mobile platform” with the “Open App Store principles” announced in February.

This “Xbox Store” will then use “well-known and popular content” to draw people into its standalone Xbox Store and away from competitors such as Apple and Google.

This “popular content” would include Activision Blizzard’s multiple popular mobile titles, primarily Candy Crush Saga (CCS)which is noted elsewhere in the same submission as one of Activision Blizzard’s top three franchises, alongside Call of Duty and World of Warcraft. Between them, CCS, CoD, and wow account for more than three-quarters of Activision Blizzard’s net revenue.

Since its launch in 2012, CCS has consistently been one of the highest-grossing mobile games on the market, with $1.2 billion in revenue in 2021. Its publisher, Maltese mobile developer King, was acquired by Activision Blizzard in 2016.

It’s a bit of a diversion in two different ways. For one thing, much of the conversation surrounding the acquisition has focused on Activision Blizzard’s PC and console titles, particularly regarding issues of Call of Duty’s console exclusive.

Cod had been a major point of contention in the CMA’s first round of investigation, particularly Microsoft’s much-derided argument that Cod – a series with annual releases that are usually the #1 bestseller each year on PC and console – is not an irreplaceable, “must-have” game.1

However, the disclosure of an upcoming “Xbox Store” changes the calculations significantly. Mobile games are significantly less publicized than console or PC games, but they account for around half of the total games market. Some forecasters have predicted that more than half of the entire industry’s revenue for 2022 will come from mobile games.2

Microsoft itself estimates that mobile games make up 51% of the games market, at $85 billion, while other analysts will rank it significantly higher than that. This figure is due to the widespread adoption of smartphones in developing countries, as well as multi-billion dollar success stories like Pokemon Go or the TiMi Studio group honor of kings.

One of Microsoft’s big marketing phrases over the past two years has been “play anywhere,” embodied in initiatives like Xbox Cloud Gaming. The company’s ninth-generation gaming strategy focused less on traditional strategies like console exclusivity and, as Nintendo did with the Wii in the 2000s, doing more to reach an audience that generally wouldn’t buy a console.

In this context, it would be more surprising if there wasn’t some sort of Xbox mobile plan in the works. However, jumping into a competitive app store is a bigger step than expected and paints the Activision Blizzard acquisition in a markedly different light.

It was already a big deal when it seemed “right” that Microsoft would own the games industry’s biggest action franchise, but now it also looks like it’s planning to disrupt mobile gaming.

Footnotes :

1: On some level, this argument from Microsoft makes sense, in that there’s never really a shortage of military-themed pseudo-realistic shooters on the market. That said, CoD’s market dominance hasn’t just happened because of institutional dynamics; many games are genuinely popular and influential. It’s like Disney is arguing that Star Wars just isn’t a big deal because other space operas exist.

2: There’s a lot of ink you could spill on this mismatch – mobile’s relative lack of media coverage compared to its actual market share – but the simplest explanation is that much of mobile is devoted to what is generally referred to as “casual” play. That’s a few hundred million people playing puzzle games on their phones while waiting for their bus, many of whom will never spend a dime on it. It doesn’t inspire the kind of die-hard amateur market that warrants a dedicated press environment.