Microsoft to focus on "smaller" acquisitions

Microsoft to focus on
Michael French

By Michael French

October 19th 2007 at 10:11AM

Does CEO Ballmer's strategy point at the direction for Microsoft Game Studios?

Reuters reports that Microsoft CEO Steve Ballmer has said the company will be focusing on smaller acquisitions over the next few years in order to focus on the "independent path".

Speaking at the Web 2.0 Summit in San Francisco yesterday, Ballmer said that the company wants to focus on smaller purchases worth $50m to $1bn each ever year rather than pursuing 'mega-deals'.

"If at some point it makes sense, maybe then it makes sense. But that's not where we are going. We are driving in an independent direction," said Ballmer

Although his comments came following speculation that Microsoft is planning to buy web giants Yahoo and/or Facebook, it has kept a keen acquisition strategy towards games, spending big on the likes of Rare, Lionhead, and in-game ad firm Massive.

Over the past few weeks, however, Microsoft has seen two key games development partners - Bizarre and BioWare - snatched away from from it via acquisition, while also allowing in-house studio Bungie to divest towards independence. It's also closed in-house game studio FASA. All of which has led games industry watchers to speculate over what the future might hold for Microsoft Game Studios and its acquisition of talent.

Potentially, a swoop for smaller teams may be in the offing - Ballmer added that while Microsoft was hoping to go for the comparatively smaller acquisitions, "We'll probably buy 20 companies a year consistently for the next five years."