Ignore The Metaverse. The Real Value in Gaming Is Intellectual Property

The most popular games titles can be further monetised by being turned into long-running franchises that are updated each year

Epic Games, maker of Fortnite, announced this week that it had secured $2bn from Sony and the company behind Lego to build a gaming “metaverse”.

Beyond the nebulous and as-yet unrealised concept of an avatar-filled virtual world, the partnership reflects a more urgent battle: acquiring the intellectual property needed to dominate the games industry.

That is also a good way to understand Microsoft’s proposed acquisition of Activision Blizzard for $75bn, announced in January. Satya Nadella, chief executive, spoke fuzzily about that deal helping a gaming metaverse.

But the transaction also unlocks access to Activision’s games portfolio including Call of Duty, World of Warcraft and Candy Crush. This acquisition built on others they have made in this space. Since 2017, Microsoft has bought nine independent studios, not to mention Skyrim developer Bethesda.

Less than two weeks after the Microsoft-Activision deal, Sony reacted by acquiring the maker of the Halo franchise Bungie for $3.6bn. Investment in Epic helps to further ensure that the Japanese maker of PlayStation has a pipeline of new titles.

These moves come as both Microsoft and Sony battle it out to become the ‘Netflix for gaming’ — a one-stop shop for all your gaming desires. And there is forthcoming competition. Apple, Amazon and Netflix are also building up streaming services for gamers.

Meta will let some creators sell virtual items in Horizon Worlds.

Image: Meta

Owning the rights to a strong stable of games is crucial because, just as with TV streaming, you need regular incentives for users to pick your platform and keep coming back.

Games like Epic’s Fortnite have huge communities that will follow them anywhere, so will prove attractive to tech companies looking to move into streaming or any other part of the gaming ecosystem. The most popular titles can also be further monetised by being turned into long-running franchises that are updated each year, such as Electronic Arts’s long-running Fifa football series.

The talk of futuristic gaming metaverses will capture attention. The more immediate prize is valuable IP.

Source: FINANCIAL TIMES

Editor: IPR Daily-Rene