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Microsoft set to acquire Activision Blizzard

In November last year, Bango Chief Marketing Officer, Anil Malhotra, wrote a blog about Netflix’s move into the gaming industry as part of its fight to hold onto consumer attention. While it may not immediately seem connected, Tuesday’s announcement that Microsoft is acquiring Activision Blizzard seems partly based on this same battle for “mindshare”.

It is increasingly difficult to capture and hold user attention, so businesses are continuously looking at ways to grow and broaden their content to ensure they attract new users but importantly, keep those users for as long as possible.

Activision Blizzard owns some widely loved console & PC titles; Call of Duty, Guitar Hero, World of Warcraft – each of which have huge followings, which clearly brings immense value to Microsoft. But it also owns popular mobile games titles like Candy Crush, meaning Microsoft has not only grown its core content, it has also expanded its target market to include mobile gamers, an audience it has already been working to capture via its cloud gaming focus.

In the short term, it means the value an Xbox Game Pass subscription holds will increase if Microsoft does, as it suggests in its announcement, include many of these new titles in the monthly subscription. Over the longer term, it could cause problems for other games companies like Sony should Microsoft stop supporting PlayStation with titles like Call of Duty, or perhaps withdraw them from Sony’s competitive monthly gaming subscription.

Either way, this is a strong strategic move from Microsoft. Game Pass currently has 25 million subscribers vs Activision Blizzard’s nearly 400 million monthly active players, meaning the acquisition should bolster the growth of both Microsoft games market share, and Xbox Game Pass take-up and monthly revenues.

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