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What Exactly Does the “Metaverse” Have to Do With the Microsoft-Activision Deal?

Microsoft develops the Xbox and has been a major player in PC and console gaming for more than 20 years. The company isn’t betting $70 billion on the buzzword of the week.

Microsoft/Blizzard/Ringer illustration

On Tuesday morning, I wasn’t alone in wondering why so many news publications, such as The New York Times, reported Microsoft’s acquisition of the video game publisher Activision Blizzard, in a $70 billion deal—the largest in the history of Microsoft—as a major breakthrough for “the metaverse.”

It’s a big deal for video games, for sure. My colleague Ben Lindbergh covered the commercial scope. But there’s also cultural significance and a question over the relevance of the metaverse. Microsoft develops the Xbox and the company has been a major player in PC and console gaming for more than 20 years. Microsoft isn’t betting $70 billion on the buzzword of the week. Activision Blizzard publishes enormously popular titles such as Call of Duty, World of Warcraft, and Overwatch. The deal bolsters Microsoft against its main rivals, Sony and Nintendo, in a market where subscriptions (such as Xbox Game Pass) and microtransactions (in games like Call of Duty) make or break consoles.

But the console wars get a bit trickier once we’re talking about online multiplayer games with cross-platform playerbases, like Apex Legends or Rocket League. Who wants to develop the next big online multiplayer game—the sort of game that turned Activision Blizzard into the biggest video game company outside of Japan—only to narrow the game’s potential audience to a single console? Xbox chief Phil Spencer says he’s not about to lock out the PlayStation from Warzone. We’ll see. Microsoft and Sony aren’t jockeying for any particular title so much as they’re jockeying for control of the marketplace in a much more nebulous sense.

Enter the so-called “metaverse.” The term refers to the notion of a vast and immersive virtual world above and beyond the current constraints of social media. Think Nintendo Wii avatars, virtual reality, and platforms like Second Life—expanded to include a much broader and more casual constituency as its playerbase. That’s the big idea. Three months ago, Facebook rebranded the company (though not the website) from Facebook to Meta. Mark Zuckerberg says he hopes to spend the next several years elevating users to “an embodied internet.” It’s a familiar ideal in science fiction and online gaming. It’s also familiar to anyone who remembers that one video of Zuckerberg projecting his virtual avatar to Puerto Rico in the aftermath of Hurricane Maria. It’s “virtual reality” with a clearer aspiration toward widespread social participation on practical terms rather than solitary sessions in abstract space.

Tech giants have spent more than a quarter century toying with this idea, from the Virtual Boy through Google Glass. It’s a hypothetical revolution with many false starts. So Andrew Ross Sorkin describing the Microsoft-Activision deal as a coup for the metaverse suggests someone’s gotten high on the valley’s endless supply of self-serving buzzwords.

But “the metaverse” does on some level address a real shift in video game culture. Ten years ago, the life of the average gamer was very different. The persistent watchword in video game culture, “immersion,” had somewhat different connotations. The Last of Us—a third-person shooter with an engrossing story, photorealistic graphics, and cinematic production—was immersive. The term suggested a certain measure of solitude and pretension. It recalled the notorious quote from the late Nintendo president Hiroshi Yamauchi about Sony cornering the market on “depressing games,” such as Final Fantasy VII and Silent Hill, for the original PlayStation in the 1990s. The Xbox was different: Microsoft found its formative strength in the 2000s in beating Nintendo, Sony, and Sega to a decent console implementation of online play. There was a rough connection to unruly teens spamming racial slurs during gameplay in Halo—but it was a start.

This was a big but still novel development in video game culture for several years. But then the great shift from offline single-player gaming to online multiplayer culminated rather explosively in the 2010s with the peak cross-platform popularity of Fortnite. For once, the biggest and most interesting game in a generation wasn’t a story-driven, single-player title but rather an open-ended battle royale with indistinct characters and no story. This was the turn. The post-Fornite gamer now spends hundreds, maybe thousands of hours ranking up across several seasons of a single online multiplayer game. The modern gamer no longer expects Activision to bother developing a single-player campaign for the latest Call of Duty. The Last of Us is influential but now also somewhat quaint. Far Cry is quaint. Final Fantasy is quaint. It’s still important! But it’s no longer the center of gravity for video game culture. So even though the PlayStation 5 and the Nintendo Switch outsell the Xbox Series X/S, Microsoft now seems much better adapted to the prevailing migration to online lobbies—in other words, the metaverse.

So of course Microsoft buying Activision Blizzard stokes a new round of intrigue about the “metaverse,” a concept on firmer ground in online gaming than anywhere else in modern life. The metaverse in some sense begins in the multiplayer lobby. It’s a watercooler; a hostile sandbox; a marketplace for skins and memes. It’s yet another online time-suck. It’s nothing if not, in Zuckerberg’s words, “an embodied internet.” The tech giants witnessed the commercial domination of the video game industry in the past decade, and now they’re extrapolating the business model to every other corner of online life. So welcome to the metaverse. Welcome to Warzone.