With Activision Blizzard Acquisition, The Microsoft Mobile Footprint Grows Stronger

While reactions are focused on console and PC gaming, let's not forget about mobile.

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Earlier today, Microsoft shocked the industry with news it will acquire Activision Blizzard for nearly $70 billion. While reactions came pouring in--and memes quickly flooding social media--most of the discourse has centered around Activision Blizzard's flagship titles.

While those questions are certainly valid--"is Call of Duty going Xbox-exclusive?" being a particularly juicy topic--there's a facet of this acquisition that is going woefully under-analyzed: the Xbox brand's newly acquired foothold in mobile gaming.

Microsoft and Mobile Previously Haven't Meshed

Microsoft is no stranger to gaming on mobile devices, pushing cloud-based gaming through its Game Pass service since 2019 when it was called Project xCloud. That said, the company's mobile-specific portfolio is surprisingly sparse. Minecraft is a juggernaut in every format, sure, but after that?

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Halo: Spartan Assault was a mobile-exclusive game for a while… until it was ported to Xbox One. Wordament was the Windows Phone answer to Words with Friends, but never caught on. Heck, the "second best mobile game in Xbox's portfolio" might actually be Fallout Shelter, which only counts thanks to Xbox's recent Bethesda acquisition. They've tried other brands--from the AR experiment Minecraft Earth to the mobile racer Forza Street--but both of those have since been sent to or announced for the chopping block.

That's not the full Xbox mobile portfolio of course, but the point stands: the Xbox brand and mobile gaming have not meshed well. Game Pass on the cloud is one thing, but we're talking about the core mobile gaming experience with games designed specifically for phones here; Microsoft has never even tasted a piece of that pie… until now. Let's talk about what this Activision Blizzard merger will do for Xbox's mobile brand.

Xbox's New Mobile Footprint

The most obvious gain for Xbox in this deal involves King, the mobile developer behind Candy Crush Saga. King generated the most revenue in the company for the third quarter of 2021, bringing in $652 million from a player base of 249 million people. Most of those people are playing the enormously popular Candy Crush, but there are other games that bolster that revenue figure as well: Bubble Witch, Pet Rescue, and Farm Heroes are all popular King franchises in their own right.

That all sounds good, but those games are traditionally marked as made for "casual" players. They're the games that, to the outsider looking in, give mobile gaming the "gacha" stigma designed only to make money and not be "good" games. It's a silly argument, sure, but it persists, meaning Microsoft would have to do more in the space in order to be relevant. Luckily, Activision has that covered too.

Enter Call of Duty Mobile, the mobile-based first-person shooter made in partnership with Tencent. CoDM is a massive mobile hit, celebrating both 500 million downloads and $1 billion revenue earned in only 19 months--and that was in May 2021. Seven months later the game shows no signs of slowing down, earning $30 million in revenue for November 2021 according to Statista. That will now fall under Microsoft's control, every cent of that revenue stream included.

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Let's also not forget what's coming in the pipeline: Diablo Immortal, the mobile entry in Blizzard's famed RPG franchise. Despite its less-than-stellar announcement at BlizzCon 2018--the infamous "you all have phones, don't you?" still rings in our heads--the closed beta was a success according to company earnings calls and the full launch is slated for sometime this year. Once that comes out, Xbox could have a second major mobile hit on its hands outside of the major mobile-focused developer it just acquired.

But this is all that we know to be coming down the pipeline. What could this purchase mean for the future? For starters, the Xbox Game Pass cloud library will certainly be bolstered with games from across Activision Blizzard, though exactly what remains to be seen. Imagine Diablo II playable on your phone thanks to Game Pass… isn't that neat? As far as actual mobile games, we'd expect some of Xbox's biggest franchises to start appearing in app stores not long after the acquisition is finalized. We'd be keen on a mobile port of Halo Infinite's multiplayer a la CoDM, or maybe even a crossover of some kind between the two franchises.

This new positioning in the mobile market couldn't come at a better time for Microsoft, especially with Electronic Arts bolstering its presence by acquiring Kim Kardashian: Hollywood developer Glu and Take-Two adding Zynga and its multiple successful mobile franchises just last week. In a sector that accounted for more than half of all gaming revenue in 2021--$93.2 billion for mobile in the $180.3 billion industry as a whole according to NewZoo--the Xbox brand could become the new King of mobile gaming, and all it cost was $69.7 billion.

Jason Fanelli on Google+

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