Microsoft chief hails Activision deal as grand step into metaverse

Technology first developed for video games will one day shape much of Microsoft’s software and be at the heart of the next major computing platform, according to Satya Nadella, CEO of the US software company.

In its first interview since Microsoft’s agreement last month to pay $ 75 billion. for game maker Activision Blizzard, Nadella sought to paint the world’s largest technology deal ever as central to the future of online interaction as people spend more time in what’s become known as metavers.

Tech Exchange: the entire Satya Nadella interview

In the first of a new series of monthly ‘Tech Exchange’ interviews, the Microsoft chief explains why his $ 75b deal for Activision Blizzard is central to shaping online interaction. Click here to read the full interview

The Microsoft chief also claimed that it was close to the company’s original business of creating software tools for developers to boost its game-building capabilities.

That would enable it to “democratize game building, which today only happens in the context of entertainment,” he said. In the future, the same techniques will “bring it… To anyone who wants to build any space and essentially have people, places, things digitized.”

“We can start dreaming [that] through these metavers I can literally be in the game, just as I can be in a meeting room with you in a meeting. The metaphor. . . will show up in different contexts, ”he said.

While Nadella painted the giant acquisition as an important step in the race to build the next version of the Internet, it has sent shockwaves through the current gaming industry, where Microsoft is in a battle with Sony over the dominance of console games.

The Activision Blizzard agreement is the largest in Microsoft's history.  Chart showing Microsoft's five largest acquisitions ($ billion).  The Activision Blizzard agreement worth DKK 68.7 billion  USD, dwarfs the former largest of LinkedIn (USD 28.1 billion)

Phil Spencer, the US company’s game manager, has already given informal assurances that it will not take Activision’s most popular games, Call of Duty, away from Sony’s PlayStation.

But Nadella suggested that Microsoft should not have to make any formal concessions to win regulatory approval of the deal, as it would still be too small to have a restrictive effect on competition.

“Ultimately, all the analysis here has to be done through a lens of: ‘What is the category we are talking about and the market structure?'” He said. “Even after this acquisition, we will be number three with a kind of low-teen share[of the video games market]. . . We want to be a bit of a player in what will be a very fragmented place. ”

The Microsoft chief admitted that competition regulators would probably also focus on the impact of the deal on the future development of the meta-verse, rather than just on the current gaming market.

But he said Microsoft was committed to building open computing platforms that would allow people to move freely between the virtual worlds of different companies. He added that if regulators try to introduce rules to keep metavers open and connected, they should apply the same rules to all technology companies.

“If that’s what we want to define for each participant, the only thing I care about is having equal traffic rules for all participants,” he said. “So if it… Comes through legislation or through regulation or regulatory enforcement, whatever the form, we will be very open to it and engage.”

Using current technology, the virtual worlds built by different companies would be as interrupted as players playing discrete video game titles today. According to the Microsoft chief, it has highlighted the need for new standards that would let people take their digital identity from one metaverse to another along with personal digital items.

Freedoms like these would also remove the possibility for Internet companies to step in and separate large new companies, such as Google had carved out a dominant role on today’s internet, Nadella suggested.

“If I go from one game to another game, or I go from one site to another site, I can actually go without being interrupted by someone else in the middle of it, from a discovery plane or search plane, or whatever you have.”

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