Might Microsoft break its acquisition drought with a social gaming company?
There's been a lot of analysis this week of a study that exposed the fact that Microsoft hasn't made a single acquisition in calendar 2010. (The Softies told News.com there may have been some minor, quiet ones, but nothing serious.)
Context & Ripple Effects
Two days ago a study put Microsoft's 2010 acquisition count at zero against Google's 23, turning an unusual deal drought into a talking point; Microsoft's response to News.com — some minor, quiet buys, nothing serious — confirms the big-ticket pipeline has been dry all calendar year. Against that backdrop, the new rumor that Microsoft might buy a social gaming company reads less like deal chatter and more like an answer to the drought itself.
It also rhymes with an older thread in this coverage: back in July 2008, an Ars Technica argument held that Microsoft had to move fast to realize its online future. A social gaming purchase would be a fast way to buy audience and engagement on the consumer web rather than build it — which is exactly what the 2010 scoreboard says the company hasn't been doing.
First-order effects
- If the rumored social gaming acquisition happens, it ends Microsoft's confirmed 2010 drought of significant deals and hands the Xbox Live/entertainment group a consumer-web audience it has not bought its way into this year.
- The 'minor, quiet ones' caveat Microsoft gave News.com means the drought framing itself becomes a PR problem the company now has to manage publicly.
Second-order effects
- With Google at 23 deals in 2010 against Microsoft's zero, any social-gaming target Microsoft chases sits in the same talent-and-engagement market Google is actively consolidating — competition that pushes valuations up on small, hot social studios.
- Rivals in console and casual gaming would face a Microsoft competitor that owns both the living-room device and the social-web funnel, pressuring them toward their own social distribution deals.
Third-order effects
- The pattern points to capability acquisition as the standard route into social and consumer web services for large platforms — buying engaged user bases faster than organic products can build them.
- Deal-count comparisons like the Microsoft-0-versus-Google-23 study are becoming a public scoreboard for platform competitiveness, making acquisition cadence itself a signal markets and press read.
The trend: Platform giants are increasingly judged — and judging themselves — by acquisition cadence in social and consumer web categories, where a single purchase substitutes for years of organic audience building.