Microsoft consolidating the video game industry is bad for everyone- Engadget

It was cute at first. When Xbox head Phil Spencer took the stage at E3 2018 and announced the acquisition of five notable studios – Undead Labs, Playground Games, Ninja Theory, Compulsion Games and The Initiative – the air inside the Microsoft Theater turned electric. It felt like the company was righting a wrong in its business plan and finally building an internal roster of exciting games that it could offer exclusively on Xbox platforms. You know, a few friends to keep Master Chief company.

Today’s announcement that Microsoft is buying Activision Blizzard, the largest third-party publisher in the video game industry, doesn’t feel as harmless. Four years on and numerous acquisitions later, the Activision Blizzard deal feels like an extreme escalation of Microsoft’s plans, and it could mark a turning point in the video game industry as a whole, with negative consequences for both players and developers.

So far, public reaction to the acquisition has been mixed, which makes sense for a few reasons: first, Activision Blizzard's sheer size is daunting, and this purchase represents more money and industry power than Microsoft's previous gaming acquisitions combined. Second, Activision Blizzard is currently the subject of multiple investigations into allegations of sexual harassment and gender discrimination at the studio, where CEO Bobby Kotick has been in charge and largely unchecked for the past 30 years. The Wall Street Journal is reporting that Kotick is poised to leave the company in a golden parachute once the Microsoft deal goes through.

This is the first time Microsoft has received a confused response to acquisition news, rather than outright praise, and that's because this isn't a standard transaction. It's the clearest sign yet that we're in the video game industry's era of consolidation.

Back in 2017, Microsoft was badly losing the first-party IP fight to Sony and Nintendo. By the end of that year, Xbox had shut down two of its internal studios, Lionhead and Press Play, it had killed a fewhotly anticipated projects, and even with the Xbox Series X right around the corner, there wasn’t much to look forward to in the company’s software reserves. The acquisition announcement at E3 2018 was a sigh of relief for anxious Xbox fans.

By February 2019, Microsoft had 13 studios and publishing organizations under the banner of Xbox Game Studios.

And then in September 2020, Microsoft revealed it was buying ZeniMax Media, the parent company of Bethesda, id Software, Arkane Studios and Tango Gameworks. The gaming world generally rejoiced, but a few folks also started glancing around, suspicious. These studios were a big deal – the stewards of Fallout, Doom, Dishonored, Wolfenstein, Deathloop, Starfield and Elder Scrolls – and they were being added to Microsoft’s substantial pile of medium-sized companies, more names in a growing list. That alone was cause for pause.

For most fans, the main question was, what did the acquisition mean for games like The Elder Scrolls VI, which was part of a series that historically hit PlayStation and Xbox platforms alike? Basically, would Elder Scrolls VI come to PS4 and PS5?

Turns out, probably not.

One year after Microsoft’s purchase of Bethesda, Spencer told GQthat he believed the Xbox ecosystem was the best place for all of the franchises in the studio’s repertoire, including The Elder Scrolls VI. He all but confirmed it would be exclusive to Xbox.

“It’s not about punishing any other platform, like I fundamentally believe all of the platforms can continue to grow,” Spencer told GQ. “But in order to be on Xbox, I want us to be able to bring the full complete package of what we have. And that would be true when I think about Elder Scrolls VI. That would be true when I think about any of our franchises.”

Starfield, Bethesda’s sci-fi RPG built for the ninth console generation, will definitely be exclusive to Xbox Series X/S and PC, skipping PS5 entirely. Spencer’s comments make it clear that Xbox is eyeing exclusivity for its franchises, and after today’s $69 billion deal goes through, that’s going to include Activision Blizzard games.

Activision Blizzard is the largest third-party publisher in gaming, and it’s the owner of massive franchises including Call of Duty, Overwatch, Diablo, World of Warcraft, Hearthstone and Candy Crush. As a third-party studio, Activision Blizzard has been able to negotiate with the main platform holders to get its software on the consoles and devices it wants. This doesn’t always equate to same-day launches or in-game item equity, but generally speaking, this position has helped ensure Activision Blizzard games reach as many players on as many platforms as possible. Exclusivity agreements and distribution deals are the main source of competition in the industry at this point, allowing outside developers to advocate for their games without feeling beholden to any console owner in particular.

When a platform holder becomes the largest publisher in gaming, it flips the script completely. It jams the script into a shredder, burns the scraps to ash, condenses the ash into stone, and then throws that to the bottom of the Mariana Trench.

Let’s take Call of Duty, a series with predictable annual installments, for example. Over the years, Activision has shifted allegiances between Microsoft and Sony, offering early access and exclusive game modes to Xbox platforms, then PlayStation, and mixing it up along the way. Among all the backroom talks, bad blood and better offers, it’s always been up to Activision to cut the best deal for Call of Duty, console holders be damned.

After the acquisition, that negotiation looks entirely different, if it even exists at all. As the owner of Call of Duty, Microsoft can tell Sony to screw off, keeping one of the industry’s biggest franchises exclusive to Xbox platforms.

This likely won’t happen right away, but it’s certainly a possibility down the line. In his blog post about the acquisition, Xbox’s Spencer didn’t address Sony or Nintendo platforms specifically, but he alluded to the possibility of cross-platform support for Activision Blizzard’s franchises.

“Activision Blizzard games are enjoyed on a variety of platforms and we plan to continue to support those communities moving forward,” he said, without detailing what he meant by “platforms” or “support.” Keep in mind, this was the messaging around Elder Scrolls VI at first, too.

Microsoft isn’t the only company in the midst of a studio-hoarding spree: Sony picked up its 13th internal studio, Housemarque, in June 2021, while Tencent is chugging along with ownership of Riot Games, financial stakes in a handful of massive studios, and the purchase of LittleBigPlanet 3 developer Sumo Group in July 2021. Even Valve has scooped up a handful of independent creators in recent years, including the team behind Firewatch and some members of Kerbal Space Program.

Microsoft’s purchase of Activision Blizzard simply feels like the final push into a new era for the video game industry: consolidation.

While exclusivity deals may be the short-term concern, this trend has a longer and more tragic tail. It’s highly likely that there will be more acquisitions by Microsoft, Sony and other major names in gaming, and these deals and subsequent companies will only get bigger with time. With just a few massive studios controlling a huge chunk of the software pipeline, it could instill a sense of homogeneity among new titles, killing innovation as each developer attempts to conform to the corporate environment around them, actively or subconsciously.

Even with “creative freedom” built into their contracts, the acquired studios will all use the same QA process, funding arrangement, marketing plan, management structure and editing cycle; they’ll have the same bosses and face the same oversight. And when all new products are the result of a singular perspective, they’re bound to feel familiar. Stale, even. Boring.

Microsoft’s acquisition of Activision Blizzard is an escalation of the exclusivity scheme, and it represents a new way of doing business. Now and for years to come, consolidation is the name of the game.

Maybe one day we’ll get Consolidation 2: Blow It All Up And Make Everything Indie Again, but that one might have trouble finding a publisher.

Well that was fast, a lot of game media world is already seeing gaming as we know dead, thanks to MS keeping gaming to one system. I guess innovation is dead as we know it, because one company is now trying to own the whole gaming world. I guess coming in 3rd place each gen didn't make MS a happy camper lol

https://www.engadget.com/microsoft-xbox-activision-blizzard-consolidation-exclusives-222028443.html

TLDR? Bad for Sony, good for gamers 😎

Lol, not reading all of that. Please provide a summary.

That said, I agree that it's bad.

My question to the writer and people who feel this way: Given that this is the direction the industry is going, what would you rather they do? SOMEONE is going to buy up studios and consolidate, do you think they should stay out of it and let Tencent or NetEase buy up everything? Google?

It is going to happen regardless, so I guess the question is who would you rather own which studio or publisher?

MS puts all their first party on gamepass day one on PC and Xbox.

If anyone is snagging developers I'm glad it's them.

Hypothetically let's say Sony did this and not MS.

That would be a way shittier situation. Every game $70 and only allowed to play it if you can find a PS5 to buy.

Let MS buy em, game pass and PC support is fine.

Where were these folks when Sony was actively and perpetually paying to exclude platforms for many games? The gaming media and gamers has been pushing for the active locking of games to hardware. Now, they are surprised by the end results?😂

The industry has been going to shit for years now, this is just the cherry on top.

@Pedro: Absolutely true and why it was inevitable that the industry would consolidate.

How many articles have we read and videos have we watched where people (accurately) stated "Sony has the better exclusives" or "Microsoft needs exclusives". When you poke the bear you might get eaten.

They unleashed a hungry bear in the gaming park and are shocked when it eats people.

Stick to indie games.

The good thing about indies is that they are independent. 😊

@daredevils2k: dumb article. Why doesn't anyone mention the "consolidation" in the tv/movie business? Netflix and disney plus are practically consolidating everything under their umbrella. This is the direction that gaming is taking also. MS is just getting ahead of the game.

Like what games? Final Fantasy 7?

Can someone summarize the wall of text in the OP I do not want to read that much

@madrocketeer said:

Still salty that this game didn't got a sequel.

Sony fans are butthurt hypocrites

@madsnakehhh:

Yeah, there's been a few imitators (Moonlighter springs to mind), but all told, Recettear was still the best.

Shame. Such an original concept.

didn't read.

Money, money, money

Must be funny

In the rich man's world

Money, money, money

Always sunny

In the rich man's world

yes thats one big example. The pretty much locked in exclusivity for that game with square, even though it was originally planned to release on xbox as well. Even after the 1 year term ended, they decided to renew and screw over xbox. Funny enough, same thing for intergrade. I'm actually suspicious that they did the same for a bunch of other games like persona as well. Returnal developer was 3rd party before sony bought them out. I had to google up why sony was able to get a game like demon souls remastered and apparently they bought a stake in the company.

I agree.

This post is so damn disingenuous. Now watch when MS has no competition. LMAO.

Housemarque worked almost exclusively with Sony since 2013. Purchasing them makes more sense than Microsoft buying Activision.

People cheering for monopolies are the same people that will be crying when MS makes Gamepass 49.99 a month.

With all respect to pieces like this I don't think they stand up to scrutiny in this particular case. Activision-Blizzard is already a conglomerate of developers. The article rambles for a bit but its punchline seems to be that consolidating developers into a single oversight stifles creative freedom no matter what the contracts say.

The problem with that (I agree with their sentiment when discussed in general terms or other cases you can point to) is the developers in this case are already operating under those conditions. In fact, they are currently operating under one of the worst conglomerates in the industry. So passing those developers on to a new overlord doesn't really change a thing for them unless that overlord is more or less stringent and toxic. And in fact, in this case the evidence we have is MS is a less heavy handed and toxic overlord than Activision.

So...

Don't buy up all the indies. Don't buy up all the smaller publishers/studio consortiums. But I just can't see how this particular case will hurt gamers or the employees.

I don't see how this will be bad for the employees and/or for the gamers...unless you're a fanboy

fantastic post haha

It's bad for the employees because they miss out making money on Sony's consoles and it's bad for PS gamers because they wouldn't be able to play the games.

As a side note I game on a PC and PS4 so I can play anything I want. I'm no fanboy of either company in fact I despise both companies in different ways corporate fanboys are stupid.

So damn high, I can't read worth a crap🤪

This article, and the majority of the outrage on social media is so disingenuous and full of hypocrisy. Everyone claims they don’t care about the Call of Duty. (Even though the 2020 and 2021 COD games were the 2 best selling games of 2021) The writer of this article even seems to dismiss the series because of the annual launch cycle. But now that COD is owned by Xbox, all these people are worried about creativity and innovation?!?! From Activision?!?! Give me a break.

Activision was shopping themselves around. We now know EA was in the mix to purchase Activision as well. People out here acting like Xbox stole the company… It’s beyond clear that the majority of publications and journalists don’t like Xbox. For example, Jason Schreier was on Twitter having a real tough time with this. And we all know, this opinion would be COMPLETELY different if PlayStation made the deal instead of Xbox.

The problem is that this signals that the Xbox strategy is to just buy everything so that people have to switch to Xbox/PC, with the endgame of buying Sony when they have nothing left. Consolidation is ALWAYS bad unless it's the only way a company will survive.

Today it's ActiBliz. Tomorrow it's Sega. After that it's EA. Capcom. Ubisoft. Square Enix. It'll keep going, and other than GP shills gamers gain NOTHING from it. If you don't see that, you're just blinded by your fanboyism.

Honestly, this topic is too serious for this forum full of immature children. When Xbox becomes the only option for everyone and MS starts to take advantage of that, you'll all wish you protested when you had the chance. We'll see how much you enjoy GamePass when it's $70 a month 10 years from now and the only way to play anything.

Also want to note that I have a 3080 PC. I don't lose anything from this specific purchase (unless PC gaming never recovers and I'm never able to buy another graphics card). This isn't salt; it's foresight.

let me say this...MS buying up activision-blizzard could be the best thing for them. HOPEFULLY, they can pull back on the annual COD release cycle to a 2 year window, or even 3 years. Right now it feels like activision is pumping out 2 CODs per year, they've been milking the shit out of it and its not something I expect MS to continue. Can you imagine, how sick of this shit the developers must be, working on COD 24/7. Shift focus from COD, to a bunch of other GREAT games that the developers talents can be used on.

@techhog89: You need to take a deep breath. You sound like Alex Jones throwing out wild conspiracies. Xbox didn’t poach anything. Activision was looking for a buyer. This isn’t what you’re painting it as. Activision had an off year for COD (still number 1) Diablo and Overwatch 2 are having development issues. Oh, and let’s not forget those workplace allegations. Bobby and Co. wanted to sell at a someone good price before we saw Activision in real trouble. $68Bil sound like a lot, but an Activision that doesn’t have these current issues is worth more, and sells for a lot more than this. But of course, a bunch of broke journalists dont understand any of this, and just spew a ton of hyperbole to the uneducated consumers.

Maybe Engadget was hoping to be bought by Activision. Did you see that Bobby’s first plan was to purchase media outlets to improve Activisions public perception? I bet the brass over at Engadget couldn’t have used some of that money, but now they’re stuck out here trolling for clicks…

@daredevils2k: Wall of texts do not work in SW.

But, as an XBox fan, I will make this prediction - I am betting future Call Of Duty games will release on PlayStation. MS is not going to lose out on $80 million dollars a year in revenue just to stick it to Sony. What will happen, IMO, is that:

1. CoD games will launch day 1 on Game Pass.
2. All expansions/DLC will come to Game Pass first - and go on PC (non-game pass) and PS5 "later".
3. There will be some Game Pass exclusive content
4. There may be some exclusive features or something for Game Pass players

I think MS will go the Minecraft route instead of the Elder Scrolls/Starfield route. The fact that there will be benefits to play CoD games on Game Pass will bring in subscriptions.

What fanboyism? What on earth are you on about.

I was excited when they were buying smaller, underrated developers. The prospect of passionate, creative underdogs being given the financial backing of MS after years of setbacks and downgraded ambitions, seemed like a dream I never thought would come true.

Then they bought Bethesda and I felt they took it a step too far.

Then this... this...

...this.

I don't think when gamers were asking MS for more 1st party exclusives they meant buying games already coming to xbox. Guess MS bought the 1st place trophy instead of earning it 🤷‍♂️.

You and the cow brigade would be going NUTS on here if Sony had bought Activision

This hobby has fetishized about exclusive content for decades.... No one more to blame in that more than the fans. Now we're nearing points where hardware sales won't be the indicator of a successful generation and Microsoft knows that controlling IP is the name of the game.

Sony buys studios and keeps games away from gamers....

Nintendo has studios and they keep their games from gamers

Microsoft is doing the same thing.

Agreed,

So TC how would you feel about God of War, Horizon, Grand Turismo, Ratchet and Clank, Demon Souls, Uncharted, and The Last of Us going to XBOX?

Or are exclusives only fair when Sony does it?

Yea as an Xbox fan I'm no longer excited about this. Makes me either wanna switch ships or retire from gaming. NOT liking where this is heading.

Gotta get the great price of $10/15 a month while it's still around!

Price increase is inevitable at this point. Hopefully a small one the first time. If it was going to be $50 a month they'd need to have tiers or else very few would buy it.

Oh please.... 🙄 ya know what it's called when you spend two decades bringing along a new gaming device and go up along side established gaming companies? earning it. No games, no franchises and every silly fanboy in existence rooting for you to fail (because fanboys are pathetic) yet 20 plus years later the stable is developed and the approach is unique and exciting....

all these companies have the money to make changes to the way they do business over time.

There are definitely people here who subscribe to this double standard... Theyd be doing backflips if Sony bought A/B

@sargentd: If MS buys them all once Sony and Nintendo bow out of the console space you know you'll be paying $30 or more a month for Game Pass right? You gotta see whats happening here.

This is what happens when non gaming companies get into the gaming industry, they just buy it all up and turn it into shit.

MS is just looking for a market to control that Amazon, Apple, and Google haven't touched yet, because that's the competition that is really scaring MS and they are fleeing to the one industry they can still just buy with their windows money.

Sony still has a major chunk of weeb market so I don't see this being any threat there. People gotta have those JRPGs.

That's a little dramatic no? Sony owns and operates several studios of exclusive content on their own.... Its the way they wanted the industry to be.

Microsoft IS as much a gaming company as Sony... No different whatsoever. Nintendo is the only one of the three that is primarily gaming based. Sony is like a less successful Microsoft, both with several divisions of products.

Gamepass is unique.... So even right now it has no competition to speak of.

You'd retire from gaming because of this? huh? that doesn't even make sense.

Screw industry consolidation. I'm good.

@TheEroica: Sony nor Nintendo could buy the largest 3rd party publisher, heck they couldn't even buy the 2nd largest publisher.

What makes the games industry so great is the amount of diversity in it, a lot of different companies making great games and adding to the industry. BUT like with TV and movies feeling all "samey" and Safe after mass studio consolidations (Disney) we could be headed down the same path with games. Do we really want Amazon, Google, Apple, and disney to jump in on this industry? Everything will start to feel the same, and everything is going to have a damn subscription and micro transactions out the ass

This is what this hobby has been fetishizing about for 20 years.... Every fanboy dweeb talking shit about their companies exclusive games created this culture. We should've been clamoring for a unified piece of hardware that could play everything, but not our crew of fanboys.... We want the exclusive game and then we want to rub it in to people who can't play it....

Just one gen ago people were saying "there's no point to Xbox they got now games!!" that was the baramoter of success this hobby levied at Microsoft.

Don't like the way they responded? It's too bad.... We set this culture in motion.