Microsoft Acquires Gaming Services Startup Playfab to Bolster Azure Platform

Microsoft has acquired PlayFab, which helps game developers launch their titles online more quickly with simplified back-end services.

The Seattle-based startup had raised around US$ 13 million in funding from investors. The startup will be integrated into Microsoft’s Azure gaming group. “Together, Azure and PlayFab will further unlock the power of the intelligent cloud for the gaming industry, enabling game developers and delighting gamers around the world,” mentioned Kareem Choudhry, Microsoft’s corporate VP of gaming in a blog post.

There are 1,200 live games currently operating on PlayFab’s platform. The company states that they’re currently processing more than 1.5 billion transactions daily. PlayFab offers game developers platform to host and operate online games and the analytics tools to help understand and monetize users. The PlayFab startup also boasted much larger customers, including Disney, NBCUniversal, Rovio, and Capcom.

In a blog post announcing the deal, CEO James Gwertzman noted how the rapid changes in the gaming industry had made way for a company like PlayFab: Matt and I launched PlayFab four years ago to solve a burning need. 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.

As major tech market players are paying attention to the backbone technologies enabling game development and monetization. Microsoft is also focused on the company’s Xbox division and latest console hardware and services. According to Virtual Reality Content Creation Market report published by Coherent Market Insights, creasing demand for virtual reality games on various platform such as smartphones, PlayStation, and computer have accelerated the growth of gaming segment in the virtual reality content creation market. The company has also been active in more consumer-facing gaming acquisitions such as interactive streaming service Beam just over a year ago.

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