Huge gaming news this week as Microsoft has bought Activision Blizzard for nearly $70 billion, the largest deal in gaming history. For those non-gamers of you out there, that’s like Apple buying Google. Two mega companies in their fields, merging into one. We’re taking a look at what this means for the two parties involved and what it means for the wider industry.
So firstly, what has Microsoft gained from this merger? Well, they’ve been on a huge spending spree in the last half decade or so, buying Obsidian Entertainment (Fallout New Vegas), Playground Games (admittedly already an Xbox exclusive developer known for Forza and Fable) and Zenimax Media (the holding company behind Bethesda Games(Fallout, The Elder Scrolls, Starfield), iD Software (Doom, Quake and Rage), Arkane Studios (Dishonored and Prey), MachineGames (Wolfenstein) and Tango Gameworks (The Evil Within). And now they’ve followed those up with Activision Blizzard, the developer behind Call of Duty, Tony Hawk’s, World of Warcraft, Diablo and many, many more.
Now, obviously, this means that Microsoft owns the rights to some of the top selling series of all time including Call of Duty, Fallout and The Elder Scrolls. With rights comes the ability to bring in exclusivity, as we’ve seen recently with Starfield which, it has been announced, will come exclusively to Xbox consoles and PC.
And there’s no reason to expect this won’t continue which has caused trepidation across the games industry, as huge titles that make a lot of revenue annually could now be exclusive to two platforms, cutting Sony out entirely.
In terms of the console race, Sony has significantly outsold Xbox for the past few generations. For example, in Quarter 1 2021, PS5 outsold Series X/S by almost double. There could be a lot of reasons for this including the dilution of the consumer base between Xbox and PC, better Sony exclusives or just a general preference for Sony consoles, but that’s a conversation for another time. All we can tell at the moment is that Microsoft is clearly trying to change the strong reputation that Sony has for it’s exclusive games by buying up established industry names, and it wouldn’t be out of the question for the company to then make these games exclusive to Xbox.
With big enough titles, there will be an inevitable shift in the balance. Games like COD especially have a strong eSports presence, and if enough of those customers roll over to Xbox, Sony loses a good chunk of revenue. Especially when they would also lose their timed exclusivity with the aforementioned shooter series once the current contract ends in 2023 (Microsoft will honour the existing deal for now).
The console race used to be about graphic and processing capabilities, but now there appears to be a shift to the best content. Arguably, the 9th generation has been relatively slow to get off the ground in terms of content, with big-hitters like Horizon and God of War being delayed several times. As well as that, key studios like Rockstar (admittedly not an exclusive but still a studio we’ve not heard from in nearly four years, nearly nine if you focus solely on the series every wants to see return, GTA VI) and Naughty Dog have been very quiet for awhile with no current game releases planned publicly. Content then, is key. And while Microsoft is building an arsenal of game developers both annual and more sparse, with well established fan bases and reputations that would provide big wins if they decide to utilise this new position.
But that’s still to be seen. As is if the acquisition will be allowed, with officials circling the two companies for a monopoly review (off the back of laws that state that no company can have too strong a hold over an industry through buying up rivals).
The results of this current situation are still to be played out. Regardless of the outcome, it will likely change the way the gaming industry functions in the future and have a widespread impact in which statistics and the focus on technological innovations fade out in exchange for great games with amazing content that captures consumers for generations to come. We could also see a lot more of these types of massive acquisitons in the future as Sony start to respond to balance out the playing field. With a booming industry that is constantly growing, we can only hope this leads to even better things down the road.