NEW YORK, Dec 29 (Reuters Breakingviews) – Microsoft ( MSFT.O ) has answered the call to action. Missing most of the generation, the computer giant is in the best position to miss a moment. Boss Satya Nadella’s two new hires are profitable, but getting into bidding wars can be risky.
Acquiring Call of Duty creator Activision Blizzard will give Microsoft a chance in the smartphone space as it expands its Xbox division. Candy Crush Saga is one of the company’s most valuable assets, contributing significantly to its operating income of $3.5 billion by 2022. This block-based video game was released in 2012 and has been downloaded more than 5 billion times, making it the most downloaded game in more than a decade, according to research firm Sensor Tower.
Artificial intelligence is another way for Microsoft to enter the market. Nadella’s $10 billion investment in OpenAI-owned ChatGPT will help Nadella reach beyond its core commercial customers. The chatbot had more than 100 million users within two months of its launch, making it the fastest UBS analysts have seen in two decades of tracking the industry.
Both of these investments will strengthen Microsoft’s ability to measure consumer behavior using data collected from in-app purchases and cloud gaming subscriptions. This will increase the fierce competition with other technological giants to equal or surpass human intelligence.
Nadella’s influence gave him the confidence to discuss the launch of Microsoft’s gaming app store with his partners. The company has previously represented Fortnite parent Epic Games in an ongoing lawsuit against Apple ( AAPL.O ) and Google, arguing that its monopoly power could force developers to use the royalty payment system and pay 30% commission. purchase price.
Meanwhile, the European Commission has targeted six “gatekeeper” technologies that could offer third-party solutions for the two operating system giants. Because of Microsoft’s strong brand, its Xbox store remains attractive and threatens the prices offered by Apple and Google. Jefferies analysts said the gaming business would account for 20%, or $17 billion, of Apple’s services revenue in the fiscal year ending September 2023.
The move will increase regulatory scrutiny for Microsoft, which has avoided public attention in the 25 years since the company was named as a defendant in a US antitrust case. A stronger market will also change other history for the better. When asked about the new iPhone released more than a decade ago, Microsoft CEO Steve Ballmer laughed and talked about his expectations. Nadella may have the last laugh.
