Earlier this year, Microsoft announced its planned acquisition of US publishing giant Activision Blizzard. According to analyst Michael Pachter, this step could ensure that Xbox Game Pass will grow to 100 million subscribers in the coming years.
Speaking to Yahoo Finance Live, Wedbush Morgan analyst Michael Pachter revisited topics like Xbox Game Pass and Microsoft’s acquisition of Activision Blizzard.
During the interview, Pachter initially admitted that he initially thought Microsoft’s vision for a video game subscription service was a bad idea. Above all, the fact that Microsoft was rather mixed in the Xbox One era, both in terms of its own studios and in the area of first-party productions, made Pachter doubt the success of the Xbox Game Pass at the time.
“Then they went on a shopping spree and bought six independent studios, the largest of which is Obsidian. You are very, very good. Then they bought Bethesda, a huge studio, and now they’re buying Activision,” Pachter said, pointing out that the acquisitions will make Microsoft the fourth-largest video game publisher in the United States.
Acquisitions the key to success?
According to Pachter, the takeover will make Microsoft a giant in the video game industry that is able to continuously expand the Xbox Game Pass using its own studios and production facilities and thus appeal to completely new target groups. “Their vision for the future is: Let’s eliminate the consoles,” Pachter continued. “Let’s use the cloud and deliver games to every screen there is.”
“And that potential market is 3.5 billion people. I don’t think they will get that many Game Pass subscribers. But will it go from 25 million to 100 million? Yes,” added Pachter, who also said a few words about the $69 billion acquisition of Activision Blizzard, which is currently under scrutiny by competition watchdogs. According to Pachter, he expects that the successful conclusion of the deal is only a matter of time.
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“I can confidently say that the FTC has no legal basis to challenge this,” Pachter said of the acquisition. “You could try. But the basis for a challenge would be that if Microsoft completes the acquisition of Activision, they would pull the games off Sony’s Playstation platform. And Microsoft has already blogged and tweeted that they won’t do it. There are treaties and they will honor them.”
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