Microsoft uses edge computing for multiple purposes, but recently one area of strong investment has been through its gaming division. Microsoft’s game streaming platform, Game Pass, has been heavily invested in over the past year to offer a strong alternative to consumers buying games as they are released. Additionally, Microsoft is expected to bring more focus to its cloud gaming platform, xCloud, over the next year and launch new products to provide an affordable entry into cloud gaming. Both of these new services are key parts of Microsoft’s gaming strategy and both rely on providing content quickly and with low latency, something that edge computing was made for. Despite this need, Microsoft’s patent activity in the sector has slowed recently, so it would be wise for them to consider an acquisition of an established company in the sector. Based on its portfolio, Limelight Networks may be perfect.
Limelight Networks provides content network delivery services for providing images, videos, and games over the internet. It started early in the edge computing sector, with its first publication occurring in 2011. Over the last ten years it is third in total patent assets within the communication category, behind only Centurylink and Cisco. Limelight also has ten patent assets in the non-blockchain platform category, but their primary focus based on its business model is within communications and latency. Evidence of Limelight’s network being beneficial for gaming already exists in the form of a longstanding contract with Sony which includes the use of Limelight for game download delivery.
From a business point-of-view, Limelight is in a prime position to be acquired because despite increased business from the pandemic its stock price has dipped, it recently reported a loss in Q4 of 2020, and it had to lay off employees. With a market cap of around $400 million, it is well within a range that Microsoft could easily pay for and would be less than other investments it has already made into its gaming division. It would certainly be a blow to Sony to lose its partnership with Limelight, but between buying ZeniMax to turn established multi-platform franchises into Xbox exclusives and negotiating with MLB to bring its game straight to Game Pass after historically being a Playstation exclusive, Microsoft has shown that it isn’t pulling punches in its approach to gaming.
Only time will tell if Microsoft decides to acquire Limelight, but doing so certainly looks like a smart move as it would more than double Microsoft’s current portfolio in edge computing and let it bring Limelight’s existing network immediately into its streaming and cloud gaming platforms. To keep an eye on other startups ripe for acquisition and spaces of need for large corporations, check out the Edge Computing Patent Forecast®!
