Market Insight

Microsoft buys games physics engine maker, Havok, from Intel

October 08, 2015  | Subscribers Only

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On October 2, 2015 Microsoft revealed that it had acquired Havok from Intel (which purchased Havok in 2007) for an undisclosed sum. The company says it will continue to license the Havok suite of products to third party developers.  Havok is best known for its games physics products, but it also licenses an artificial intelligence SDK, an animation suite and the Vision Engine it acquired when it bought Trinigy in 2011. Microsoft said that the acquisition will be an addition to its existing platform components for developers such as DirectX 12, Visual Studio and Microsoft Azure. It also made a point to note in its announcement that the company would “continue to innovate for the benefit of its development partners” and that part of that would be “building the most complete cloud service” which gamers and developers saw a glimpse of when it was used in the demo for Crackdown 3 at Gamescom with rendering offloaded to the cloud.

Our Analysis

The acquisition of Havok fits in to a long established strategy of major games companies acquiring game development technology. Sony has a long history, going back to the PlayStation 2 days, of providing development tools and middleware products to game developers to encourage development for its systems. Microsoft has also supported game development through DirectX and Visual Studio, and has worked directly with many middleware developers to ensure support for Xbox and Windows environments.

The one thing this acquisition is not about is making money from middleware. Microsoft will not be creating a billion dollar market for physics engines with Havok. Instead this is a technology buy that will enable Microsoft to encourage game developers to expand the worlds and effects they create in their games. Given the trend towards reducing the cost of middleware or even giving it away for free (without source code) to encourage use, it would not be surprising to see Microsoft lowering the price or even creating a subset of products to give away to smaller, independent developers.

Despite speculation, another thing it is not likely to do is bring a flood of mobile developers to the Windows 10 mobile environment. Physics and AI are certainly in use in mobile games and Havok does support iOS and Andriod, but Havok products were designed, developed and are primarily in use in AAA PC and console games. Many mobile developers are using Unity and satisfied with the physics on board.

As we have seen over the last decade, game development tools and middleware have become a way for hardware makers to make development easier for content makers. Providing a suite of development solutions has become a means of attracting developers to a specific platform or environment. Nvidia has its own physics development suite, PhysX, which came from its acquisiton of Ageia in 2008 in addition to a plethora of development support tools and programs to keep developers loyal to Nvidia chips and hardware. As mentioned, Sony has had a suite of tools and middleware for developers for nearly two decades to facilitate development for its platforms.

Microsoft has an existing program of its own to support developers, but it has learned with mobile environments, existing loyalty does not necessarily translate from one platform to another. The discussion of Crackdown is a good indicator of where Microsoft is headed with this acquisition. As the cloud gaming discussion has focused on PlayStation Now and its current purpose to address the backward compatibility issue for the PlayStation 4, Microsoft has been content to stay relatively quiet about their plans for cloud gaming. Crackdown 3 was the latest in little snippets here and there about Azure and its use in gaming. Bringing a powerful physics suite, game engine and AI into the library of development components gives Microsoft a more robust way to support developers as the company tries to convince them to use the Azure infrastructure for cloud gaming. 


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