If you have played Candy Crush, World of Warcraft, Call of Duty, Starcraft, Diablo or Overwatch you may be familiar with the company behind those games, Activision Blizzard. If you’ve never heard of these and want nothing to do with gaming, keep reading as well because this news is going to affect everyone. Activision was in the news again this week because Microsoft made a move to acquire them for $70 billion.
That number is staggering for a lot of reasons but the most prominent reason is that Activision does not have the best reputation right now. The company is facing allegations and lawsuits galore. Despite that, If this deal goes through, it could be the biggest tech company acquisition in history. Ever.
Why Microsoft is writing such a big check for a troubled gaming company?
What does this has to do with the metaverse and Facebook/Meta and how it will affect the fate of Activision Blizzard's game portfolio?
Gaming Industry
Activision has had nonstop bad press for the last eight months or so. But you wouldn’t know that based on the sale price. And that’s because that price reflects just the scale of the gaming world in 2022 and the growth potential that people think lies ahead for gaming companies. This acquisition is not as simple as placing a calculated bet on growing Microsoft's gaming sector. If you CNTRL+F the acquisition announcement, Microsoft mentions gaming 19 times but they also reference the term metaverse twice. They spell out that they think this acquisition will give them access to the building blocks for the metaverse.
The Metaverse
When we talk about the metaverse today, most people are describing an interconnected virtual world or worlds, that form this digital mirror reality. A lot of people see the metaverse as the next big thing in tech, the next iteration of the internet, and the medium upon which web3 operates. It will be a place where we socialize, work, learn and play, use digital avatars, collect digital possession and use digital currency. Microsoft’s acquisition of Activision Blizzard is the counter move to Facebook changing its name to Meta and announcing their ambitions to control the metaverse. A Queens Gambit Accepted move for the chess players out there. Reading between the lines, this announcement is a very clear statement that Microsoft also has ambitions to control the metaverse.
If you hear metaverse and you think SIMS or Second Life and aren’t that impressed, I implore you to do more research because those applications are like prototypes compared to what we are looking at now.
The Interoperability Problem
The grand vision for the metaverse is this common digital universe where all these different companies, brands, and creators can build immersive experiences and we seamlessly move from one experience to another. I this ideal state we are all individual companies playing in the same sandbox. But Right now what we have looks more like individual metaverse bubbles that might one day be connected but for now, are islands.
The problem with what Microsoft and Meta are doing is that it doesn’t facilitate true interoperability or the ability to seamlessly connect these digital worlds. The Indicator Podcast brought this up and I think they are 100% correct. If we go back to web1.0, we needed to come up with a set of protocols that allowed anyone to build on the worldwide web. These are things like hypertext transfer protocols or HTTP, and URLs and as the Indicator pointed out, these are all things that anyone can use. And they weren’t created by a corporation, but by nonprofits.
As of right now nobody, nonprofit, DAO, or otherwise has created a common set of protocols for the metaverse and we probably won’t have that any time soon.
Metaverse has become a tech buzzword. Companies are tacking metaverse onto their names and product names because VCs are throwing money at anything that makes metaverse moves. My company, Future Sight AR has been building mixed reality app that live in the metaverse for three years now and usually when we speak to investors, we have to explain what this digital world is and why it’s valuable for companies to join it. Now I just say “we make software that brings your organization into the metaverse” and VCs can’t write a check fast enough. And while we are building as one of these island bubbles of metaverse we building in such a way that when the ability to connect to other digital worlds is a reality, we can very simply plug in. But right now that is just a vision on our product roadmap because to make it a reality, all these different companies, some of which are massive like Microsoft and Meta/Facebook will have to build infrastructure that works together to create this interoperable realm.
So I’m skeptical about Facebook or Microsoft building this holistic metaverse. I think what they’re actually building is immersive iterations of their products which will be one of these metaverse island bubbles, that is self-contained.
The Gaming Connection
Getting back to the acquisition, what does this countermove by Microsoft have to do with Activision Blizzard and their game portfolio? In Microsoft's announcement Satya Nudella said that "Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.”
The Activision portfolio includes some games that already let people have a limited metaverse experience. These are games like Call of Duty, World or Warcraft and Overwatch. and yes, people are there to game, but they are also there to socialize, whether that is natively over the game or talking on Discord while playing. To put this in perspective some people meet up at a persons house to play poker, chat and have a beverage. Others get in a gaming chair, spawn into a game, meet up with friends avatar and get on Discord to chat. It’s sort of like a new social network but I’m hesitant to call it that because it doesn’t quite fit the profile of a social media network. It’s something else, that’s kind of its own new category and I don’t have a label for it yet.
For Non-Gamers
Even if you aren’t into gaming or internet culture, you should care about who ends up building the metaverse and deciding how it will work. We don’t want history repeating itself. When social media and web2.0 began appearing around 2010-2012, no one really cared who controlled social media or if there were any global standards social media companies should be adhering to. Facebook and Twitter were still new and it was only early adopters that were on the platforms. Now we all use social media. Maybe not every platform - for the sake of your mental health, I hope you aren’t on every platform. Gaming is heading that direct too, where even if you aren’t a gamer, you might still use the platform for socializing and entertainment and it is just becoming ingrained into society and culture. The same way that right now most of us aren’t content creators or influencers, but we still use Instagram, Facebook, TikTok, and Twitter. When used in this way gaming is just one of the gateways that is onboarding people into the metaverse. Whether you are a gamer or not, you will probably end up on one or more of these platforms where companies like Microsoft and Meta will have access to scary amounts of your personal data.
Next Steps
I hope that this post motivated you to continue to educate yourself on what these massive companies are up to since they will probably control a good portion of our lives. I hope that maybe someone out there feels inspired to be the nonprofit or DAO to set up metaverse-wide protocols that allow everyone to participate in this next iteration of the internet. Stay safe out there.
xoxox LL