Microsoft Corp (NASDAQ:MSFT) was a beneficiary of a hit box office movie earlier this year, with "A Minecraft Movie" being one of the highest-grossing video game adaptations of all time. The tech giant hopes to have another box office smash through its new partnership with Paramount Skydance (NASDAQ:PSKY).
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What Happened: Since completing its merger, Paramount Skydance is ready to invest in film franchises for movie theaters, preferring to capitalize on box office revenue over streaming.
That could be just fine with fans of the video game franchise Call of Duty, who will be able to see the hit game come to life on the big screen in the future.
Paramount signed a new film partnership with Activision Blizzard, which was acquired by Microsoft for $69 billion. The partnership calls for a live-action film made from the Call of Duty franchise, as reported by Variety. Paramount will produce and distribute the film.
Launched in 2003, Call of Duty is one of the top-selling video game franchises of all time and gives Paramount Skydance dozens of games and storylines to choose for adaptation. The franchise has sold over 500 million units globally in its history.
The report said that Paramount could expand the deal into a Call of Duty universe that could include multiple films and television.
"As a lifelong fan of Call of Duty this is truly a dream come true," Paramount CEO David Ellison said in a statement. "From the first Allied campaigns in the original Call of Duty, through Modern Warfare and Black Ops, I've spent countless hours playing this franchise that I absolutely love."
Financial terms of the deal were not disclosed.
Why It's Important: The latest video game adaptation announcement, which brings Microsoft's Activision and Paramount Skydance together, comes with recent hits at theaters from the sector.
The three highest-grossing video game adaptations have happened in the past two years with "The Super Mario Bros. Movie," "A Minecraft Movie" and "Sonic the Hedgehog 3."
Paramount has had recent success with adapting the Sonic the Hedgehog franchise with three movies and streaming series. The latest third movie grossed $492.2 million globally.
Microsoft bought Minecraft parent Mojang Studios for $2.5 billion in 2014. The hit game franchise was turned into a live-action film that grossed $423.9 million domestically and $957.7 million globally. Mojang Studios was credited as a co-producer on the film.
While Microsoft may have seen less of a financial impact than "A Minecraft Movie" film distributor Warner Bros. Discovery (NASDAQ:WBD), the company benefits from licensing deals for the film rights, potential profit sharing, and a likely boost in playtime for the hit game.
A similar effect could happen with a Call of Duty movie seeing strong box office gross and more people playing future games.
Activision Blizzard had a previous box office hit before being acquired by Microsoft. The 2016 film "Warcraft" is the fourth-highest-grossing video game adaptation with $439 million worldwide. The company's "Skylanders" game was also turned into an animated series for Netflix Inc. (NASDAQ:NFLX).
Netflix is working on a series based on Minecraft as well.
As the owner of the Xbox gaming console and through the acquisition of Activision Blizzard, gaming will play an important role in Microsoft's ecosystem. The company could be ready to further monetize some of the company's biggest hits.
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