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Originally Posted by spglobal
Microsoft Corp. is looking to significantly expand the reach of its burgeoning cloud and subscription gaming services with its planned acquisition of Activision Blizzard Inc.
The deal, which was announced a week after Take-Two Interactive Software Inc.'s proposed offer for Zynga Inc., would significantly bolster Microsoft's portfolio with Activision's valuable gaming intellectual property, allowing the software giant to target a wider range of gamers across all platforms, analysts said.
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At the forefront of Microsoft's gaming strategy is its Game Pass subscription service, which gives members access to a revolving slate of games from a wide variety of developers, including Electronic Arts Inc. The games can be downloaded onto Xbox consoles and Windows PCs or streamed via the cloud on those devices. Game Pass also supports Android smartphones and tablets.
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However, the primary selling point of the service is that it offers first-party games developed by Microsoft's internal studios on the day of their commercial launch. Upon close of the acquisition, Microsoft will include Activision's games in Game Pass, which now has more than 25 million subscribers, Spencer said in a statement.
The addition of Activision's games to Game Pass will continue Microsoft's goal to establish an all-encompassing, cross-device games ecosystem, said Jijiashvili.
While Microsoft will remain committed to its Xbox console business as its main focus for at least the first half of this decade, we will likely see higher prioritization of cloud and subscriptions towards the second half," Jijiashvili said.
While Game Pass' availability on mobile is a good start, it is not where most of Microsoft's games were made to be played, said Neil Barbour, an analyst for Kagan, a media research group within S&P Global Market Intelligence.
"The long-term goal here is to make Game Pass a streaming service available on connected TVs," Barbour said. "When it's available on all major platforms such as Roku and Android TV, then Microsoft can say gaming is for everyone."