Microsoft Acquires Cloud Gaming Company PlayFab

Microsoft has announced the acquisition of PlayFab — a company that provides services to game developers to build, launch, and sustain cloud-connected games on mobile, PC, and console.

“This acquisition extends the investments and work we’ve done on Microsoft Azure to provide a world-class cloud platform for the gaming industry,” writes Kareem Choudhry, Corporate Vice President, Gaming at Microsoft in a blog post.

“Games were rapidly shifting from packaged goods, sold in boxes, to “always on” digital services, requiring sophisticated server-based infrastructure to host and operate. Built well, these backend systems enabled games to engage, retain, and monetize players like never before, with longevity in the top grossing charts measured in years. Built poorly, they crashed and burned on launch day,” explained James Gwertzman, PlayFab CEO and co-founder.

As games transform from a one-time purchase to a service-oriented affair thanks to timed events, micro-transactions, and new modes being part and parcel of most big console and PC game releases, it seems like a smart move on Microsoft’s part. More so when you consider that PlayFab’s tech powers over 1,200 games including Angry Birds: Seasons and Roller Coaster Tycoon Touch.

PlayFab processes more than 1.5 billion transactions a day and nearly 20,000 transactions a second. The deal gives Microsoft access to an unprecedented amount of information and the means to target games across platforms over and above the Xbox One business.

During a recent shareholders meeting Microsoft CEO Satya Nadella claimed that the company is bullish on gaming.

“We’re mobilising to pursue our extensive opportunity in a 100-plus-billion gaming market,” Nadella said at Microsoft’s annual shareholders meeting in November. “This means broadening our approach to how we think about gaming end to end, about starting with games and how they’re creating and distributed, and how they’re played and viewed.”

Interestingly enough, the last time Microsoft broadened its approach to gaming in a large enough scale, it resulted in the Xbox One and the subsequent backlash over the many decisions taken over its online connectivity and Kinect. PlayFab’s purchase could ensure a greater focus on growing Microsoft’s live service offerings for its upcoming titles such as new entries in Halo and Gears of War or perhaps allow it to tackle multiple platforms.

With speculation rife on Microsoft going on a spree to buy out companies to bolster its gaming efforts, we won’t be surprised to see this being the first of many this year. Though with a mixed track record in recent memory, given its handling of Lionhead and Bungie, it will be interesting to see what this means for consumers in terms of games and services like Xbox Game Pass in the time to come.