Activision buyout will help build Xbox metaverse, Microsoft says

Microsoft will use Activision-Blizzard's arsenal of video games, developers, and network infrastructures to power the Xbox metaverse.

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The metaverse represents a big opportunity for billion-dollar monetization; imagine a digital interactive world that merges internet browsers, social media, and gaming platforms into one. It's a dream come true for companies like Microsoft, who make billions every year from advertisements, licenses, and video games.

This potential is why Microsoft is investing in the metaverse. Plans aren't concrete yet, but the company has confirmed it will use its $68.7 billion buyout of Activision-Blizzard to fuel its metaverse strategies. Microsoft also raised its R&D spend in gaming and cloud by $3.6 billion throughout Fiscal Year 2022.

"Activision Blizzard is a leader in game development and an interactive entertainment content publisher. The acquisition will accelerate the growth in our gaming business across mobile, PC, console, and cloud and will provide building blocks for the metaverse," Microsoft said in a new 10-K SEC filing.

Read Also: Phil Spencer's excellent Xbox metaverse rationale puts gamers first

The deal has been approved by both company's shareholders and Microsoft expects the deal to close by the end of FY2023 (if it remains unchallenged or blocked by the FTC), but that is a conservative estimate. The FTC could approve the deal in 2022. The approval process is under way now and Microsoft recently submitted required documents.

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Meanwhile, Microsoft has made a record $16.2 billion from Xbox gaming throughout FY22. The ecosystem of Xbox hardware, products, and services is thriving even without the metaverse.