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The potential effects on Microsoft's mobile gaming business once its acquisition of Activision Blizzard is arguably less discussed in reports about regulators reviewing the transaction and even among consumers. But Microsoft showed in recent filings that this area is actually a significant aspect of the proposed merger that could help further its plans to establish its own mobile games store and a bigger presence in the mobile gaming market.
Microsoft first revealed that it aims to establish "next-generation marketplaces" for video games, including mobile platforms, last February. The company has now provided more details on how acquiring Activision Blizzard can help make it happen.
In recent filings to UK's Competition and Markets Authority to get the $68.7 billion transaction approved (via The Verge), Microsoft said, "Building on Activision Blizzard’s existing communities of gamers, Xbox will seek to scale the Xbox Store to mobile, attracting gamers to a new Xbox Mobile Platform." If the deal is approved, Microsoft will gain ownership of several immensely popular mobile games developed and maintained by Activision Blizzard studios, including King's "Candy Crush" and "Call of Duty: Mobile."
These games could help Microsoft widen its presence in the mobile gaming market aside while closing its deals with companies like Valve, Logitech, and Razer to bring Xbox Cloud Gaming (that supports certain mobile devices) to third-party platforms. Microsoft, however, argues that it would "require a major shift in consumer behavior" before the Xbox Mobile Platform (even with Activision Blizzard IPs) can sway mobile gamers away from Play Store and App Store.
Microsoft says in the filings that acquiring Activision Blizzard will give it a much better chance to compete in the ever-growing mobile gaming market. The company noted that the publisher's earnings from mobile games accounted for more than half of its revenue in the first half of 2022. "Microsoft currently has no meaningful presence in mobile gaming and the Transaction will bring much needed expertise in mobile game development, marketing and advertising," the Xbox owner added.
In a financial report released last August, Activision Blizzard reported a six-month (ending June 30, 2022) net revenue of $859 million from combined console sales, $716 million from PC, and a staggering $1.639 billion in mobile and ancillary platforms. Activision Blizzard also reported 361 million monthly active users (MAUs) within three months (ending June 30, 2022). King's mobile games accounted for 240 million players from that figure.
