The games industry’s acquisition cold war

Arts & Entertainment

How the swiping of big name developers could affect you and your wallet.

Jakob Eiseman, Editor-in-Chief

Header Image: Sony

In a move that might not seem like a big deal to those who don’t pay attention to the tech industry, Microsoft has announced one of the largest acquisitions of an entertainment publisher to date: planning to purchase the video game company Activision Blizzard for $95 a share, roughly $68.7 billion. The deal, which is expected to go through in the fourth quarter of 2023, is currently being reviewed by the Federal Trade Commission.

Activision Blizzard carries such a large price tag because it is the parent company of juggernaut game franchises like “Call of Duty,” “World of Warcraft,” “Candy Crush” and “Overwatch.” In 2021 alone, the “Call of Duty” games “Vanguard” and “Black Ops Cold War” were the number one and two best selling games, respectively, worldwide, according to the NPD Group. Acquiring “Call of Duty” alone would have essentially been a license to print money for Microsoft, but the acquisition of long-praised Blizzard franchises like “Overwatch,” “Diablo” and others, as well as the “Candy Crush” franchise of mobile apps which made $1,190 million in the year 2020 according to Business of Apps, sets Microsoft up to dynamically change the way the games industry operates.

Microsoft

Microsoft’s direct competitor, Sony Interactive Entertainment and their PlayStation line of systems, has long been a thorn in the side of the Xbox company, and has been touted by many as the better and more popular of the two since 2013. The companies have always pushed each other to create new, better exclusive properties and products, going head to head with some of the best games of the generation with Microsoft’s “Forza,” “Halo,” “Ori” and other franchises going up against Sony’s “Uncharted,” “God of War,” “Spider-Man” and more, not to mention their feats in hardware development. 

But, since the two mega-corporations started beefing, there has always been a sense of respect and profitability that came from sharing a majority of giant titles between the two systems, with games like “Call of Duty,” “NBA 2K,” “Fortnite” and others being available on both at the same time and for the same price.


Xbox

In the summer of 2020, Microsoft began the process of trying to close the gap between themselves and Sony in popularity by acquiring ZeniMax Media, parent company of the “Elder Scrolls,” “DOOM,” “Fallout” and “Wolfenstein” franchises, for what at the time seemed like an unfathomably large number: $7.5 billion. Sony did not flinch at the loss of these storied franchises, and instead kept pursuing their own goals such as creating new installments to some of their highest praised games or making deals with companies for their subscription services. But, after news of Microsoft’s Activision Blizzard acquisition, coming in at almost 10 times the value of ZeniMax, Sony has been forced to move their hand.

“Bungie,” which is to be purchased for $3.6 billion, are ironically the masterminds behind the “Halo” franchise, Microsoft’s cash crop. But, in 2007, Bungie split from Microsoft, becoming an independent studio. In the time since, Bungie has blown up as its own entity, creating two of the highest selling games of the generation: “Destiny” and “Destiny 2.” Sony has acquired Bungie, no doubt to get their hands on all that “Destiny” money, but also to show that they have a new, first-party studio willing to sell to them. To further the irony, the “Destiny” games were made with the help of Activision, the headlining studio now acquired by Microsoft.

Sony

If this is all a bit in the weeds for you, here’s what you have to know: Xbox is buying up giant studios to crush their competition; PlayStation is fighting back with their own acquisitions and we are all probably worse off that this is happening.

Platform exclusive titles have a tendency to review higher and receive more praise from consumers, which bodes well for these acquisitions. But, they also have a tendency to take longer to make and infrequently drop in price. Beyond this, while before platform owners could own a single device and still enjoy a majority of the games on the market, these acquisitions and exclusive deals will take away dozens of options unless a consumer owns both an Xbox and a PlayStation, which will run you well over $1,000 nowadays.

While Xbox offers many of their exclusive titles on their subscription service, Gamepass, at no extra charge, and PlayStation tends to provide occasional deals on their products, the prices are only going to go up from these business decisions. What was a cold war for many years is turning red hot as these giant corporations begin to gobble up once independent or public companies, taking options away from their competition and their competition’s fans.

Bungie’s $3.6 billion pales in comparison to ZeniMax’s $7.5 and Activision Blizzard’s $68.7 billion, but Sony is not a small company, and if they wanted to make money moves the way Microsoft has been, they can. This Bungie acquisition might just be a warning shot — but it could also be the shot heard around the world. Many eyes have turned to fan favorite publishers like Capcom, which owns franchises like “Street Fighter” and “Resident Evil,” Sega which owns “Sonic” and “Persona,” or Konami which owns “Silent Hill” and “Metal Gear” as possible collateral to this clash of the titans.

Obviously, it will be up to each company to take care of their consumers and to not ruin this still budding industry, but when billions upon billions of dollars are being slung in what is effectively a “gimme gimme, more more” era, the consumers will likely be the ones who face the harshest consequences in the form of even higher price hikes, a lack of game availability and a reduction in output for their favorite franchises. There are obvious benefits to this process, such as higher quality games and a more streamlined experience on a system, but, overall, the games industry is heading into a dystopian-esque megacorp-driven future unless these giants stop acquiring studios. It’s worth keeping your eye on if you have any interest in playing games, even casually.

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