for more on this surge in M and A activity in the gaming space.
Tobias Patton Ceo and founder of X populists joins us now?
Thanks so much for being on the show with us. Why do you think?
We're seeing so much movement in the gaming space
right now when it comes to mergers and acquisitions?
And is the industry at some point? Um,
at some sort of inflection point, do you think
um the reason why I think you can look at it more traditional space,
like the movie industry and if you have Disney Plus, for example,
when you open Disney plus, what you see across the top is Star Wars, you see Pixar,
you see marble and in the entertainment industry,
all of these are seen as creative intellectual properties
that have a massive amount of franchise value.
So that means that they're going to create not one movie, but several movies.
It's the same thing in the video game space.
So if you look at Microsoft's acquisition of Activision that provides them
with a number of intellectual properties that have a lot of value.
Overwatch, Call of Duty, World of Warcraft, Diablo Her stone.
Each one of these represents several billion dollars in enterprise value.
So it makes sense in the game industry right now for these companies to be um
basically consolidating and acquiring a lot of these
intellectual properties to increase their own enterprise values.
Yeah.
And we know that gaming has been popular even pre pandemic,
it was already a growing industry,
but the pandemic just kind of pushed it over the edge
as a lot of people were staying home playing video games.
Um, and doing other kind of streaming,
what do you think the major industry shifts or trends are
leading to this investment boom that we're seeing right now?
I think in addition to the pandemic that it's generational.
Um, so myself, for example, I'm 40 years old, I'm a millennial,
I've had video games in my house my entire life.
I grew up playing regular Nintendo's.
Um,
but what we're seeing now is that there's this shift, right?
And I think it's a generational shift.
The video game industry is estimated to
be worth approximately $200 billion while the
movie industry is only estimated to be worth about $100 billion in 2021.
Um And the reason for that is because
of this generational shift and folks like myself
and even the younger generations who are used to having games inside of their house,
they prefer that medium of entertainment.
Yeah, it's a really good point.
Kind of underscoring the differences between gaming and the movie
industry that we've seen just completely hit during this time.
Um,
I do also want to talk of course about the emergence
of the metaverse being a huge driver of all of this.
We have so many of these large corporations looking to race for
top talent, top tech in this space, um, to compete and really take the lead here?
How do you see that,
putting pressure in particular on pushing acquisitions when we talk about gaming?
Yeah I think again it's you know the metaverse means
a lot of different things to a lot of people.
I think one component of the metaverse is this idea of
community owned economies
um Other components of the metaverse that I think are important.
Again,
coming back to sort of this generational
expectation are immersive experiences and interactive experiences.
So if you look at the internet today,
everything is very sort of one or two dimensional.
If you go to a website there's some basic information for you.
Um If you look at the social networks,
things are becoming much more engaging with augmented reality and virtual
reality experiences tied into sort of the traditional social media experience
as this expectation of immersion sort of
increases as the younger generations become older.
Um These companies like Microsoft and Sony and
even groups like the embrace er group,
they have to adapt and they have to sort of
proliferate these immersive experiences into every sort of facet of media
Microsoft's acquisition of um
Activision and Blizzard, it makes a lot of sense.
They have these huge I PS Diablo World of Warcraft Overwatch.
And if you can imagine those characters and those experiences
sort of becoming um more a part of social media,
more a part of sort of the web experience that you have.
Uh it makes a lot of sense for them to be acquiring these assets and then of
course the talent that produces them so that
they can build their metaverse strategy over time.
Yeah, Tobias, just about 30 seconds left with you.
What tech giants or even streamers do you think?
We could see get in on the gaming space this year?
Obviously I'm I'm watching facebook meta very closely so far.
What we've seen them do is they're creating
sort of their they're taking a build approach,
they're building something called horizon.
Um I don't know if that's gonna work out in
the long term for them and I'm actually sort of
waiting for them to start taking much more of an
acquisition approach like Microsoft has
done with their acquisition of Activision
Um in addition to that,
keep a close eye on 10 cents and and basically
any social media company to start acquiring game companies.
Alright.
Tobias Patton Ceo, and founder of X populist,
Thank you so much for joining us and for that insight