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That’s according to a report from Reuters, which states that Microsoft is feeling a “sense of urgency” following the success of Shanghai studio HoYoverse‘s Genshin Impact, which has generated billions of dollars in revenue since its release in September 2020.
According to Reuters‘ sources, Genshin Impact‘s success as a cross-platform multiplayer game is something that both Microsoft and Sony want to emulate with games in their respective Game Pass and PlayStation Plus subscription services.
Microsoft has therefore built a team to scout for Chinese games, in a move that reflects the growth of the Chinese video game market. As Daniel Ahmad, senior analyst at researcher Niko Partners tells Reuters, game developers in China are “trying to standardise their development tools, create advanced production processes, invest in really large-scale teams. Ultimately, that helps provide them with the competitive edge to reach a broad audience both in terms of geography and platforms.”
Microsoft is further expanding its appeal to developers like HoYoverse by extending its Game Pass service to players on PC and mobile, thereby strengthening its cross-platform multiplayer credentials.
While Microsoft has, until now, been known for its investment in big-brand titles and studios (such as its proposed acquisition of Activision Blizzard), it is now making investment offers to smaller developers.
According to Reuters’ sources, Microsoft regrets missing out on Genshin Impact. While Sony does not own the IP itself, it did partner with HoYoverse early in the game’s development and although Genshin Impact is available on PC, for consoles it’s exclusive to PlayStation.
“Picking up Genshin Impact made Sony a lot of money,” an unidentified source told Reuters.