Microsoft Acquires Activision Blizzard

and a brief existential examination of what art is

Jan 18, 2022 • Extra Ordinary

Subrat Patnaik and Supantha Mukherjee, for Reuters:

Microsoft Corp is buying “Call of Duty” maker Activision Blizzard for $68.7 billion in the biggest gaming industry deal in history as global technology giants stake their claims to a virtual future.

The deal announced by Microsoft on Tuesday, its biggest-ever and set to be the largest all-cash acquisition on record, will bolster its firepower in the booming videogaming market where it takes on leaders Tencent and Sony.

That’s almost 70 Instagrams! Could a video game holding company really be worth 70× more than one of the top social media platforms in the last ten years? Actually, yes.

Some back-of-the-envelope math by John Gruber points out that the real value of this acquisition is not the game studios themselves, but the value proposition of adding their IP to Game Pass—a $4 billion dollar annual business on its own. Social media platforms like YouTube, Snapchat and Instagram are hard to turn profitable; this return on investment could be just a few years.

After all, video games are now bigger than books, newspapers, movies and music.

Here is a little space for you to take in, reread and consider that one more time.

Public opinion is still behind the curve but the trend is impossible to ignore: video games are going to be as important a medium of art and entertainment as film and music. Television, you better sleep with one eye open.

Of course, the artist in me finds it cynical to rank the importance of art by total revenue generated by medium. I believe the best art derives meaning and truth greater than the sum of its parts. Not all video games are high art, sure. To Roger Ebert, I would say, neither are all movies.

Microsoft understands gaming at the executive level in a way Apple and Amazon do not. Microsoft may have missed the smartphone, but they have been riding this wave all along.

If you are looking for an analysis of what the Microsoft acquisition will mean for the quality of future Activision Blizzard games, you have come to the wrong place. My top game of last year was Tetris for the original Nintendo Entertainment System.

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