It was cute at first. When Xbox head Phil Spencer took the stage at E3 2018 and introduced the acquisition of 5 notable studios – Undead Labs, Playground Games, Ninja Theory, Compulsion Games and The Initiative – the air contained in the Microsoft Theater turned electrical. It felt like the corporate was righting a incorrect in its marketing strategy and at last constructing an inside roster of thrilling video games that it might provide completely on Xbox platforms. You know, a number of associates to maintain Master Chief firm.
Today’s announcement that Microsoft is shopping for Activision Blizzard, the most important third-party writer within the online game trade, doesn’t really feel as innocent. Four years on and quite a few acquisitions later, the Activision Blizzard deal seems like an excessive escalation of Microsoft’s plans, and it might mark a turning level within the online game trade as a complete, with adverse penalties for each gamers and builders.
So far, public response to the acquisition has been combined, which is sensible for a number of causes: first, Activision Blizzard’s sheer measurement is daunting, and this buy represents extra money and trade energy than Microsoft’s earlier gaming acquisitions mixed. Second, Activision Blizzard is at present the topic of a number of investigations into allegations of sexual harassment and gender discrimination on the studio, the place CEO Bobby Kotick has been in cost and largely unchecked for the previous 30 years. The Wall Street Journal is reporting that Kotick is poised to go away the corporate in a golden parachute as soon as the Microsoft deal goes by.
This is the primary time Microsoft has obtained a confused response to acquisition information, moderately than outright reward, and that is as a result of this is not a typical transaction. It’s the clearest signal but that we’re within the online game trade’s period of consolidation.
Back in 2017, Microsoft was badly shedding the first-party IP battle to Sony and Nintendo. By the tip of that 12 months, Xbox had shut down two of its inside studios, Lionhead and Press Play, it had killed a number of hotly anticipated tasks, and even with the Xbox Series X proper across the nook, there wasn’t a lot to sit up for within the firm’s software program reserves. The acquisition announcement at E3 2018 was a sigh of reduction for anxious Xbox followers.
By February 2019, Microsoft had 13 studios and publishing organizations below the banner of Xbox Game Studios.
Microsoft
And then in September 2020, Microsoft revealed it was shopping for ZeniMax Media, the dad or mum firm of Bethesda, id Software, Arkane Studios and Tango Gameworks. The gaming world usually rejoiced, however a number of people additionally began glancing round, suspicious. These studios have been an enormous deal – the stewards of Fallout, Doom, Dishonored, Wolfenstein, Deathloop, Starfield and Elder Scrolls – they usually have been being added to Microsoft’s substantial pile of medium-sized corporations, extra names in a rising listing. That alone was trigger for pause.
For most followers, the principle query was, what did the acquisition imply for video games like The Elder Scrolls VI, which was a part of a collection that traditionally hit PlayStation and Xbox platforms alike? Basically, would Elder Scrolls VI come to PS4 and PS5?
Turns out, in all probability not.
One 12 months after Microsoft’s buy of Bethesda, Spencer instructed GQ that he believed the Xbox ecosystem was the most effective place for the entire franchises within the studio’s repertoire, together with The Elder Scrolls VI. He all however confirmed it could be unique to Xbox.
“It’s not about punishing any other platform, like I fundamentally believe all of the platforms can continue to grow,” Spencer instructed 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 constructed for the ninth console era, will certainly be unique to Xbox Series X/S and PC, skipping PS5 totally. Spencer’s feedback make it clear that Xbox is eyeing exclusivity for its franchises, and after right now’s $69 billion deal goes by, that’s going to incorporate Activision Blizzard video games.
Activision Blizzard is the most important third-party writer in gaming, and it’s the proprietor of huge franchises together with Call of Duty, Overwatch, Diablo, World of Warcraft, Hearthstone and Candy Crush. As a third-party studio, Activision Blizzard has been capable of negotiate with the principle platform holders to get its software program on the consoles and gadgets it desires. This doesn’t all the time equate to same-day launches or in-game merchandise fairness, however usually talking, this place has helped guarantee Activision Blizzard video games attain as many gamers on as many platforms as potential. Exclusivity agreements and distribution offers are the principle supply of competitors within the trade at this level, permitting exterior builders to advocate for his or her video games with out feeling beholden to any console proprietor particularly.
When a platform holder turns into the most important writer in gaming, it flips the script fully. It jams the script right into a shredder, burns the scraps to ash, condenses the ash into stone, after which throws that to the underside of the Mariana Trench.
Let’s take Call of Duty, a collection with predictable annual installments, for instance. Over the years, Activision has shifted allegiances between Microsoft and Sony, providing early entry and unique sport modes to Xbox platforms, then PlayStation, and mixing it up alongside the way in which. Among all of the backroom talks, dangerous blood and higher gives, it’s all the time been as much as Activision to chop the most effective deal for Call of Duty, console holders be damned.
After the acquisition, that negotiation appears totally totally different, if it even exists in any respect. As the proprietor of Call of Duty, Microsoft can inform Sony to screw off, retaining one of many trade’s largest franchises unique to Xbox platforms.
This seemingly received’t occur instantly, nevertheless it’s definitely a chance down the road. In his weblog publish concerning the acquisition, Xbox’s Spencer didn’t deal with Sony or Nintendo platforms particularly, however he alluded to the potential of cross-platform help 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 stated, with out detailing what he meant by “platforms” or “support.” Keep in thoughts, this was the messaging round Elder Scrolls VI at first, too.
Microsoft isn’t the one firm within the midst of a studio-hoarding spree: Sony picked up its thirteenth inside studio, Housemarque, in June 2021, whereas Tencent is chugging together with possession of Riot Games, monetary stakes in a handful of huge studios, and the acquisition of LittleBigPlanet 3 developer Sumo Group in July 2021. Even Valve has scooped up a handful of unbiased creators in recent times, together with the crew behind Firewatch and a few members of Kerbal Space Program.
Microsoft’s buy of Activision Blizzard merely seems like the ultimate push into a brand new period for the online game trade: consolidation.
While exclusivity offers stands out as the short-term concern, this pattern has an extended and extra tragic tail. It’s extremely seemingly that there shall be extra acquisitions by Microsoft, Sony and different main names in gaming, and these offers and subsequent corporations will solely get greater with time. With just some huge studios controlling an enormous chunk of the software program pipeline, it might instill a way of homogeneity amongst new titles, killing innovation as every developer makes an attempt to adapt to the company atmosphere round them, actively or subconsciously.
Even with “creative freedom” constructed into their contracts, the acquired studios will all use the identical QA course of, funding association, advertising plan, administration construction and modifying cycle; they’ll have the identical bosses and face the identical oversight. And when all new merchandise are the results of a singular perspective, they’re certain to really feel acquainted. Stale, even. Boring.
Microsoft’s acquisition of Activision Blizzard is an escalation of the exclusivity scheme, and it represents a brand new method of doing enterprise. Now and for years to return, consolidation is the secret.
Maybe sooner or later we’ll get Consolidation 2: Blow It All Up And Make Everything Indie Again, however that one may need bother discovering a writer.