CCTV Transcripts

CCTV Script 19/01/22

— This is the script of CNBC's news report for China's CCTV on January 19, 2022, Wednesday.

The newly announced deal is not only the biggest acquisition since Microsoft was founded but also the largest one in the industry of gaming. Though the deal may face some regulatory hurdles about antitrust and also pressure from rivals such as Sony, many analysts interviewed by us believe it is very likely to get the green light.

Some analysts also believe that Microsoft is buying Activision Blizzard at a good time, paying a good price. Activision Blizzard's share prices are trading at a negative 10% year-to-date return despite the 26% gain in the overnight trading session. The stock price of this game developer soared at the early stage of the pandemic but has retreated. And the company is also facing scrutiny in California due to alleged gender discrimination and other reasons. With several pending lawsuits, Activision Blizzard is in trouble. And some analysts claim that the Microsoft deal sort of saved the legacy of the gaming company.

In fact, Microsoft is one of the very few giants that can afford such a huge deal. And one of the most important reasons behind the 7 billion USD deal is Microsoft's bet on metaverse.

Bobby Kotick

Activision Blizzard CEO 

"We believe it will be is a collection of communities that are anchored by franchises that will start with gaming. So whether it's a Call of Duty or World of Warcraft or Candy Crush, those franchises that have hundreds of millions of players are going to be the form the basis for what ultimately we think will be this large, vast virtual world that's usable on any display device with a microprocessor. In order to get there, though, and this is really a big part of the motivation of the transaction is that you're going to have to have a cloud that is purpose-built for those kinds of experiences. "

Despite the development of the metaverse, gaming is also a key business arm of Microsoft. Microsoft's gaming revenue had increased 33% year over year in fiscal 2021. This outpaced the company's overall revenue growth of 18% for the year.

Phil Spencer 

Microsoft head of gaming 

"We look at the competitive set that's out there, we look at the importance to us at Microsoft gaming, of people playing on mobile. We look at the coming Metaverse the opportunities that we need with great IP, we really saw this as an amazing opportunity because of gaming's continued growth over the years, Microsoft's big on gaming, we're continuing to invest here, and we see it as a real strong catalyst for us in the consumer categories."

The game industry as a whole is a beneficiary from the pandemic and it has attracted a lot of investment since the breakout. Data show that as of October, the game industry has already received 71 billion USD funding in 2021. The competition has become increasingly fierce as the industry is sort of overinvested. As a result, consolidation is accelerating in the industry.

Just before the announcement of the new deal, American game developer and publisher Take-Two had offered 12.7 billion USD to acquire another game developer Zynga. And Netflix, a streaming service provider, also entered the industry of gaming and has already bought a game developer Night School Studio. Riding the wave of "metaverse fever", the industry may have more acquisitions down the roads.