While everyone is waiting with bated breath to see what major policy change Microsoft will announce regarding Xbox next week, what’s clear, despite all the doom and gloom, is that they’re not getting out of gaming. Strategy may shift, but they’re still going to be cranking out lots of games they want to see succeed, whether that’s through Game Pass, on Xboxes or now, potentially, on PlayStations.
That’s why in all this chaos I believe something else is no doubt happening behind the scenes. I absolutely have to think that Microsoft is trying to buy Pocketpair, the developer of Palworld, and lock up that explosive hit of a franchise for themselves. Well, for themselves to potentially release on other platforms, but as something they full own.
Palworld recently revealed it had 19 million players, 7 million of which were those who were playing on Xbox Game Pass, where a PlayStation version of the game does not yet exist, as that’s only being “considered” according to Pocketpair.
A Game Pass deal means that Microsoft has already cut Pocketpair a check, but no one, not Pocketpair or Microsoft, expected it to blow up into a 20+ million player game. So now that Game Pass deal may turn into something more. Microsoft has already said they’re throwing support Pocketpair’s way in order to help the game scale, be more stable and allow for more frequent updates for Xbox, but also probably the PC version as well.
It does not seem like more than a hop, skip and a jump to Microsoft attempting to buy Pocketpair outright while their heads are still spinning from this meteoric success. It’s hard to know an exact valuation here, but if there are 12 million players of the game, purchased at $26 a piece, that’s $312 million in revenue already earned on a shoestring budget with a team of amateurs. Palworld doesn’t have post-release monetization, so the price is the price, but you have to wonder what Microsoft would be willing to shell out for this, something that they may believe could become their own rival to Pokémon if given enough time, attention and care, and if Game Freak keeps being as complacent as they’ve been the last few generations on the Switch.
So, how much? Of course Microsoft shelled out $69 billion for Activision Blizzard. Zenimax-Bethesda was $7.5 billion. It paid $2.5 billion for Minecraft’s Mojang in 2014. How much would they spend here to lock up Palworld? Half a billion? A billion? Two? Granted we don’t know what the game’s long term prospects are, but if Microsoft, a $3 trillion company, can buy up what is likely to be one of the biggest hits of the year, and something people are genuinely talking about at least temporarily besting Pokémon, yeah, I think they could throw a relatively small amount of cash its way easily enough.
This isn’t good per se, as lord knows we don’t need any more industry consolidation and it’s nice to have big successes out of tiny companies without them being absorbed into megacorps instantly, but I can guarantee these discussions are happening. Maybe there are other bidders, but Microsoft already has this relationship, and I can see them taking it further.
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