What does Metaverse have to do with Microsoft’s Activision transactions?

Date:

In a 15-minute investor and media call shortly after Tuesday’s announcement, Microsoft and Activision executives mentioned the term “Metaverse” more than 10 times.

“When we think about our vision of what the Metaverse is, we believe there is no single centralized Metaverse,” Microsoft CEO Satya Nadella said on the phone. “We need to support many Metaverse platforms.”

According to analysts following the company, how Microsoft could position the fast-growing gaming business as a ramp to the Metaverse. Future vision of the internet This has been the subject of increasing hype, especially since Facebook announced a new focus. New name October Meta Platforms Inc.

At Metaverse, as the tech industry’s thinking progresses, people gather in digital form to work, play, shop, and interact in an immersive virtual world that sees each other as characters called avatars.

Video games are an example of how such a world looks and works, with many players being wrapped up in a virtual world for hours, spending money on digital products, collecting avatars and interacting. increase.

Early betting on Metaverse-related technology has increased its share of some companies Exchange Traded Fund with the theme of Metaverse Recently released. and,

Apple Ltd

Said Most of its future plansInvestor excitement about how to profit from the rise of the Metaverse helped the company reach first this month Valuation of $ 3 trillion In daytime transactions.

Video game software was already a global industry of over $ 100 billion before the Covid-19 pandemic. Meanwhile, games have become even more popular in watching movies and other forms of public entertainment. Still, gamers are a minority around the world, and most people only play part of their free time. They make up only a small part of what Metaverse supporters hope to one day become a much larger world.

Roblox’s vast virtual world allows users to teleport between games, dedicated social spaces, concert venues, and buy virtual merchandise.


Photo:

The Wall Street Journal’s MARIA ALEJANDRA CARDONA

The technology and infrastructure needed for the future of the Metaverse is still under development. For example, modern virtual reality headsets are still relatively cumbersome and costly.

Meanwhile, Microsoft still has There are many reasons to get it Activision.It is one of the largest video game companies in the world with some of the most popular franchises, Microsoft You can pay at Activision evaluated within one year.

“Microsoft is talking about a large community of enthusiastic gamers, but what does that mean for the future Metaverse?” Said Stiffel analyst Brad Ribak. “There’s still a lot of work to be done about what the Metaverse will end up in.”

Microsoft, which already has a significant video game business, is positioning itself for the future of Metaverse, not only for high-tech giants such as Meta, but also for other video game companies.

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What do you think Metaverse means to you? Join the conversation below.

upon

Roblox Corp.

Users who are self-proclaimed platforms have millions of games, dedicated social spaces, Concert venue, And they can buy virtual merchandise to improve their experience. Epic Games Inc. “Fortnite” and Linden Research Inc.of “Second Life” It also includes a wide range of virtual worlds.

By purchasing Activision Blizzard, which still requires regulatory approval, Microsoft will win some online games with Metaverse characteristics. For example, Activision’s World of Warcraft is where millions of people play and interact. They appear as avatars in fantasy virtual landscapes and buy virtual items such as pets. The company’s entire game has about 400 million players per month.

However, Microsoft and other companies need the support of gamers to influence the Metaverse, said Adrian Montgomery, CEO of.

Enthusiast Gaming Holdings Ltd,

Hosts an online community for game lovers. “What happens to the Metaverse really depends on them.”

As the Metaverse becomes a reality, technology predictors say there are countless virtual areas of people besides games, such as virtual offices, schools, sports arenas, and shopping malls. Still, many of Metaverse’s basic tools and technologies are likely to come from the game first, they say. For example, technology for tracking people’s movements in the real world and matching game avatars in the metaverse could improve the meeting experience in a virtual office.

Strivr Labs Inc in Palo Alto, California. Derek Belch, Founder and CEO of, said: ..

Metaverse real estate transactions have reached record highs. We talked to companies investing in digital real estate to understand the economic model and why investors are spending millions of dollars on virtual real estate.Photo: Republic Realm

Video games are already influencing technologies such as graphics, cloud computing, artificial intelligence, and virtual markets.Microsoft Apply tools and knowledge According to analysts, Activision has been extended to products for other game studios and businesses.

Even without the arrival of the Metaverse, the video gaming industry has been riding a wave of growth and integration in recent years, partly due to pandemic social distance limitations.

Newzoo BV estimates that consumer spending on gaming software increased by about 23% year-on-year in 2020. Its growth shrank to about 1.4% last year, but total spending still reached about $ 180 billion, analysts said. Meanwhile, M & A transactions within the gaming industry have nearly tripled from $ 8.9 billion in 2020 to $ 26.2 billion in 2021, according to PitchBook data.

Investors haven’t punished or rewarded Microsoft for this week’s big bet. Since the acquisition plan was announced, Microsoft’s stock has fallen by about 2%. Activision’s share has skyrocketed by more than 25%.

Write in Sara E. Needleman sarah.needleman@wsj.com

Copyright © 2022 DowJones & Company, Inc. all rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

What does Metaverse have to do with Microsoft’s Activision transactions?

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