Microsoft's Game-Changing Plans Post-Activision Merger

Politics, News Sept. 20, 2023, 6:13 a.m.

Microsofts post-Activision acquisition plans include integrating ads into select PC and mobile games to boost revenue and potentially introduce ad-supported Xbox Game Pass tiers, reflecting an evolving gaming ecosystem.

Newly disclosed public court documents in the FLuzala v Microsoft trial shed light on Xbox's post-acquisition plans for Activision. Beyond gaming revenue, Microsoft intends to tap into Activision's advertising prowess, integrating ads into PC and mobile games.

The pivotal Exhibit PX1763 reveals Microsoft's rationale for the merger. It presents three key drivers for the acquisition. One of these drivers pertains to advertising, where Xbox aims to capitalize on Activision Blizzard's data resources and engagement scale to enhance Microsoft's in-game advertising network.

Microsoft's Audience Network (MSAN), an AI-powered ad platform, plays a central role in this strategy. However, it appears that ads will primarily feature in free-to-play games for now. Notable examples include Call of Duty Mobile, Candy Crush, and Hearthstone.

Additionally, King's games are accessible on PC through web browsers, aligning with Microsoft's broader mobile gaming investment across the Xbox ecosystem. This move emphasizes a holistic approach to gaming, extending beyond Activision's portfolio.

This isn't Microsoft's first foray into integrating ads for growth. The amalgamation of MSAN and King's adtech could potentially lay the groundwork for cost-effective, ad-supported Xbox Game Pass subscription tiers. Similar to streaming giants like Hulu, Netflix, and HBO Max, Microsoft may introduce subscription tiers with enhanced content value.

This development aligns with earlier predictions, as Game Pass evolves towards higher pricing and diversified subscription offerings. The integration of ads into Xbox gaming could revolutionize the platform's revenue model.

In summary, the FLuzala v Microsoft trial documents divulge Microsoft's ambitious plans post-Activision acquisition. By harnessing Activision's advertising expertise, integrating ads into select games, and leveraging MSAN, Microsoft aims to reshape its gaming revenue model and potentially introduce ad-supported Game Pass tiers in the near future. This strategic shift reflects the dynamic evolution of Xbox's gaming ecosystem.