Event: on January 18, 2022 us time, Microsoft announced that it would acquire Activision Blizzard at a price of US $95 / share, with a total transaction value of about US $68.7 billion, which is the largest acquisition in Microsoft’s history.
To build an “aircraft carrier” in the game industry, game resource competition will be a long-term trend in the future. In 2000, Microsoft games split from Microsoft and focused on the development of Xbox and PC games. However, combined with the historical operation, Microsoft’s game development ability is slightly weaker than that of other game manufacturers. It has always relied on acquisition and investment to expand its game library, and the quantity and quality of exclusive 3A games have not been guaranteed. After the acquisition of Activision Blizzard, it will greatly increase the exclusive internal capacity of Xbox, which is not only conducive to the sales of basic hardware such as VR, but also promote the subscription of xboxgamepass (XGP). According to the acquisition announcement, at present, the number of global subscribers of XGP has exceeded 25 million. If you add the nearly 400 million monthly live players of Activision Blizzard in 190 countries and regions, XGP’s subscription is expected to increase significantly. We believe that resources are the core competitiveness of game companies. Whether we can form a game IP ecology and build cross platform games will become the starting point of manufacturers in the future.
Yuanuniverse is the next generation Internet, and Microsoft continues to make efforts. We believe that games, as the most “immersive” entertainment, are close to the characteristics of the meta universe in terms of product form, and can be regarded as the prototype of the meta universe to some extent. As the “new outlet” of the Internet, yuanuniverse has a broad imagination space. Microsoft is a giant in the PC era and is trying to march into the meta universe of “next generation Internet”. At present, Microsoft has built the virtual reality business scenario application “dynamics 365 connected spaces” and the augmented reality social software “mesh for Microsoft teams”. The acquisition of Activision Blizzard has enabled Microsoft to complete the “carriage” driving from “hardware, social networking and Games” to the meta universe.
IP value is fully reflected, and Chinese companies have considerable growth. If this acquisition is completed, Microsoft will have many well-known IP addresses under Activision Blizzard, such as Warcraft. We believe that IP content is not limited by technology and presentation form, and symbolizes the resource power of the company in the era of meta universe innovation. Different from overseas, China has a long history and a large number of excellent literary and artistic works. Many Chinese game world views are often drawn from literary or film and television works. Therefore, Chinese film and television companies have more potential in the construction of meta universe IP than game companies.
Investment suggestion: thanks to the continuous maturity of relevant technologies and the gradual increase of capital, games and social networking have become a more clear scene of meta universe landing, and the IP value is also constantly showing. The global technology giants represented by Microsoft have also confirmed the relevant logic through the accelerated layout of games and social networking. It is recommended to pay attention to Tencent Holdings (0700. HK), netease-s (9999. HK), G-Bits Network Technology(Xiamen)Co.Ltd(603444) (603444. SH), Mango Excellent Media Co.Ltd(300413) (300413. SZ), Ireader Technology Co.Ltd(603533) (603533. SH), and reading group (0772. HK).
Risk tip: stricter policy supervision, intensified competition in overseas markets, and delayed release of edition numbers.
