14 DAY TRIAL // Microsoft has recently announced that it’s taking over four different game studios, while also forming a new team specifically for “creating groundbreaking new worlds, characters and game experiences.”
First and foremost, the new group is called The Initiative and is led by Darrell Gallagher. The brand-new studio will be based in Santa Monica, California, according to an announcement from Microsoft.
Additionally, Microsoft said that it’s taking over Playground Games, the maker of the Forza franchise, who’ll work on “an entirely new project,” Microsoft said. The Redmond-based software giant also signed letters of intent to take over three other game studios, namely Ninja Theory, Undead Labs and Compulsion Games.
The road to $1 trillion market cap
Microsoft’s investments in the gaming industry are projected to help the company reach the $1 trillion market cap, according to Morgan Stanley analyst Keith Weiss, who also said that given this potential, the software firm is likely to become the “Netflix of gaming.”
"We see Microsoft building out the 'Netflix of Gaming,'" Morgan Stanley analyst Keith Weiss was quoted as saying in a note to investors. "We think that gaming has historically been largely ignored, misunderstood, and undervalued by analysts and investors."
While Microsoft is heading towards the $1 trillion market cap goal with cloud and gaming as the main catalysts, Apple is also aiming for the same milestone with a focus on services. At the same time, the Cupertino-based firm hopes that this year’s iPhone generation, which will include three different models, could propel it closer to this threshold.
The software giant has released a typical press releasey statement to praise its gaming efforts, explaining that these new teams will help the company in its effort to deliver original content.
“The original games we create at Microsoft Studios are some of our biggest assets,” said Matt Booty, corporate vice president of Microsoft Studios. “Our growth strategy is to continue to expand the worlds that players love, while developing all-new exclusive games that deepen their engagement with our platform. We are thrilled to welcome five new studios into the Microsoft family. We believe these teams have the collective creative power and operational excellence to deliver the next industry game changers."