It is reasonable to believe that Microsoft’s pursuit of Activision Blizzard may have partly been motivated by Call of Duty. After over a decade of releases, it’s still one of the most popular game series globally. In an interview with Bloomberg, Phil Spencer, Xbox boss, said that more than PC drove Microsoft’s interest in mobile games.
Mobile phones are the largest gaming platform on Earth. Spencer stated that mobile phones are used by over one and a quarter billion people. And I think, as Microsoft, it’s not an area where we have a native platform. We don’t have the creative capabilities to create hit mobile games as gaming comes from PC and consoles.
“One thing about the videogame industry is that if you have been around for too long, you will know most of the creators. You know the people who could be a good match for what you were trying to accomplish. We started internal discussions with Activision Blizzard about the mobile capability and then the PC with Blizzard. These were the two main reasons we were interested in Activision Blizzard.
This is a particularly interesting point, as Call of Duty is widely considered to be a significant obstacle to the approval of regulatory approval of Microsoft’s acquisition of Activision Blizzard. Microsoft had to respond to Sony’s claims that Call of Duty games was so important that they could influence console purchase decisions. Microsoft may want to minimize Call of Duty’s role in the transaction, which is understandable.
However, mobile is real money. Activision Blizzard’s Q2 2022 financial reports revealed that more than half its total revenue came from mobile games, which was $831 million. This is more than PC and console revenue combined and a significant increase from the previous quarter, where mobile revenues made up 35%. While console and PC revenues declined in the quarter, mobile revenue slightly increased.
It is interesting to note that most mobile revenues come from Activision Blizzard’s silent “K.” King, a mobile developer Activision acquired last year, reported total quarterly revenues totaling $684 million, more than 82% of the total. The shift to mobile is growing. Diablo Immortal is a huge success despite the furious backlash of mainstream gamers. Call of Duty Mobile continues to have a steady audience and is working on a mobile version of Call of Duty Warzone and Warcraft, Arclight Rumble.
The first hurdle in Microsoft’s acquisition of Activision Blizzard was cleared earlier this week by the Saudi Arabian General Authority for Competition (GAC). However, the deal is still under review by other important regulatory bodies such as the US Federal Trade Commission and UK’s Competition and Markets Authority. Although the consensus is that the deal will be approved, some US politicians are critical of Bobby Kotick, Activision Blizzard CEO, for failing to address allegations of widespread misconduct at the studio. They also criticize how he will receive a “golden parachute” under the terms.
If the acquisition is complete, it is unclear what role Kotick would play at Activision Blizzard. Spencer declined to comment, saying that until the deal closes, he is “not really in the position to say” how the company will be managed.
