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SvennoJ on 13 July 2023
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EpicRandy said:
SvennoJ said:

All the growth is in mobile. Hence I believe this deal is to get an inroad into mobile gaming, using popular IPs and Gamepass to gain traction there. xCloud quality is plenty for mobile streaming but games will also be geared to be more mobile friendly to make it happen.

Yes, that's very the main component of the deal IMO, people view $70B and I think they unconsciously associate it with the console market due to AB's history before they added K.

During the FTC trial, it was stated by an analyst (not in the actual case but one following it if I recall correctly ) that King was bought for $10B and that ABK has grown the value of K like 5x since. This might have been an exaggeration but, the way I understand things King makes more than half of the $70B valuation. Also of the rest of the valuation, another 50% or so of CoD's actual value is also tied to Mobile which I believe is separate from kings value. That means the overwhelming majority of that $70B is tied to mobile. Someone can do the math and proper research, and this is only a wild guess, the nonmobile value part of the transaction might only be in the teens.

MS have barely any presence in the mobile space making all the valuation tied to mobile at 0 risk of creating an SLC, moreover, they want to challenge an established duopoly in this space which means competition and clear benefits for consumers.

That said the graph I have shown mentions Digital so I don't know if it excludes physical copy and create a skewed representation for mobile since mobile is by default 100% digital. Yet, it does not really matter since we know video game companies non-mobile included made records profits due to covid and it looks to have a lingering effect on the market still creating a propitious context for investment which was the point of the prior post.

Consolidation typically happens in a stagnant / shrinking market though. Profits in console gaming revenue aren't soaring, hence game studios and publishers are up for sale...

ABK was losing revenue when they started the deal https://www.macrotrends.net/stocks/charts/ATVI/activision-blizzard/gross-profit Yes, the pandemic infused extra money into the entertainment sector, but that effect is done.


XBox Mau has been growing a lot but that's muddled with needing a XBox account for things like Minecraft on other devices. MS gaming revenue fell a bit as well but it's all hard to tell with the way stuff is reported.

I don't know if MS challenging the mobile players has any clear benefits for us, by which I mean gamers playing on TV / monitor. All those lovely franchises ABK is sitting on are more likely to get mobile spin offs instead of a revival for PC/console. Just like Sony is suddenly heavily investing in GAAS at the detriment of their regular release cycle, so I can see MS shifting focus to the more profitable mobile space, taking popular IPs there.