“Will Sony buy Ubisoft?” and other questions after Xbox’s shocking acquisition of Activision Blizzard

On January 18, 2022, Microsoft announces plans to acquire Activision Blizzard. This is a buying platform owner of one of the biggest game publishers and one of the biggest games in the world. Call of Duty, Activision’s flagship product, has suffered some decline in recent years, but it’s still a massive franchise. And more significantly, it’s one of the most popular games on the PlayStation.

Activision Blizzard is also a company entangled in lawsuits and ongoing conflicts with its employees, and have its reputation was seriously damaged due to a scandal of sexual misconduct.

I am a business journalist and have a lot to discuss here on industry consolidation, workplace practices and business models. But if my Twitter feed continues, there are also plenty of burning questions from gamers – especially about what this means for the future of Call of Duty and how PlayStation might respond. respond to this industry change announcement.

It is too early to know the answers to these. But we can make some educated guesses based on what each company is saying. So, do it now.

Why is Microsoft doing this?

Whenever you talk to Microsoft, you hear executives and marketers talking about the ‘billions’ of gamers they want to reach. Considering its consoles have never even hit 100 million in sales – and indeed, only a handful of consoles do – the company has to think beyond consoles to do this. .

That involves going big on PC, big on mobile, and big in countries outside of the US and Western Europe. It has to do with making console games more accessible and affordable.

That’s why they built Game Pass and that’s why they strive to make game streaming work, and that’s why they buy all these games and studios, while investing heavily in technology and cloud games.

A lot of people will focus on Call of Duty, for obvious reasons. It’s one of the biggest game franchises in the world. But at Blizzard, Microsoft has a big PC game studio, and in King it will own one of the most successful mobile game developers out there. Activision – even more than Bethesda – giving Microsoft the creative talent and content they need to make what they do with subscriptions, streaming, and the technology that reaches those ‘billions’ of players.

That is its goal.

Is it a good thing?

Massive consolidation of game companies can lead to concerns about creativity and opportunity. But there are also potential positives. Activision Blizzard will likely have more freedom to spend more time on their games and won’t feel the pressure to release major sequels to their series as often. For gamers concerned about Blizzard’s recent output, being part of the Microsoft family may just give them the space they need to get back to their best.

Is this a monopoly?

There will certainly be some questions that Microsoft will face around this acquisition. Antitrust and monopoly laws are designed to prevent a company from becoming too dominant and put them in a situation where they essentially control the market. Xbox is now definitely a major gaming powerhouse in this respect, owning some of the biggest and most profitable titles in games. It has the power to truly transform businesses into a subscription-based future.

However, the game industry is huge and there are a lot of big players out there. Xbox can have a large number of IPs and developers, and works on most of the major platforms. But it’s not the biggest console game company out there – it’s Nintendo and Sony. On PC, there is a long way to go to challenge Valve. And on mobile, King may be a major player, but there are other important names, such as Zynga.

But those are just the traditional game companies. Facebook’s investment in Metaverse, Epic Games has Fortnite, has Roblox, Google has Stadia, Apple on mobile, and even Netflix and its game expansion. There are many competitive games out there. It’s never been that simple, but there are plenty of reasons to suggest that Xbox isn’t an exclusive game. Anyway, not yet.

Call of Duty will be exclusive to Xbox?

Is not. Call of Duty will certainly remain on Xbox, PC and smartphones. The real question is: will Microsoft stop Call of Duty from launching on PS5?

Possibly, but not sure. Call of Duty is a mass-market, global game franchise that extends beyond a single platform. In many ways, it’s not too different from Minecraft, which is a truly multi-format video game that Microsoft also operates. Taking Call of Duty off the PlayStation will boost Xbox console sales, but will likely hurt Call of Duty in the process – that series has plenty of fans on its console. Sony. Xbox may decide that there’s a lot of value in having a big game on a competitor’s console.

However, you could argue the same holds true for the Elder Scrolls, and Microsoft has made it clear that the next game in the series will be an Xbox exclusive.

What about Call of Duty: Warzone?

This already has an active and engaged audience on PlayStation, and being a free game the whole point is to make it as accessible as possible. So in this case, I would be very surprised if Warzone disappears from PS5. Just as I would be surprised if Elder Scrolls Online was suddenly an Xbox exclusive.

World of Warcraft coming to Xbox?

It can, but then it always has to be. Microsoft’s acquisitions aren’t all about Xbox consoles. In fact, they are primarily geared towards using the Game Pass subscription service, on PC. Microsoft has some popular PC titles like Age of Empires and Flight Simulator, but Blizzard takes that to another level.

What’s real for Microsoft here is incorporating an IP like Warcraft into their existing PC Game Pass subscription service.

Can Xbox fix Activision Blizzard’s workplace issues?

You must hope so. Microsoft isn’t perfect, but it has a voice in its efforts to be a more inclusive, welcoming, and diverse business. Not much to say, but the Xbox management team is among the most diverse in the gaming industry, and we’re proud of that.

It’s worth noting, however, that Microsoft has a ‘limited integration strategy’ which essentially means that it buys companies, provides help for them, but ends up letting them operate the way they want. would like. The thinking is that if they get involved and interfere too much, it risks ruining what made it so successful in the first place (and Xbox has certainly made those mistakes before). This strategy started with the acquisition of Mojang and it has worked very well so far.

Will be on Activision to ask for help from Microsoft. And I doubt it will.

Workplace culture doesn’t change overnight. New processes take time to deepen. Bad apples need to be moved and replaced with the right people. Microsoft can certainly help, but it will take time.

Should PlayStation buy Take-Two / EA / Ubisoft?

This depends on what PlayStation wants to achieve. The reason Xbox needs these studios and these games is not purely to sell more consoles but to grow the subscriber base in Game Pass and reach new markets.

Sony already has a successful console platform, a solid foundation of studios that make great games, and it’s now more popular in more markets than Xbox.

But it is facing competition, not only from within the game but also outside. And if it wants to fend off these rivals, or even better compete with new concepts like Game Pass, it may need to continue to absorb.

And PlayStation has been buying companies. These acquisitions may not be on the same level of industry sensation as Activision or Bethesda, but this is the gaming industry we’re talking about… who can say the next success will come? from where? It could be a big studio like Infinity Ward, or a brand new startup. Sony has invested heavily in new teams over the past 12 months. Last year it signed the first game from Deviant game (call of duty veteran), Firewalk Studios (the old people of Destiny) and Haven Studios (former Assassin’s Creed developer). Maybe this generation’s hugely successful video game will come from one of them, rather than an established player.

But look at this space. We are in a rapidly merging world. Maybe next week we will hear about Sony buying Ubisoft. Or Facebook is buying Sony. Or Netflix. The game industry is changing rapidly.

Who is next?

Could be anyone. We can all see how attractive a company like Sega can be to Xbox or Square Enix to Sony. With so many people looking to buy, the question is who might want to sell?

Take-Two, Ubisoft and Nintendo have all previously stated that they are not for sale. But everything changes. Ubisoft is currently having difficulty keeping employees After several scandals in the workplace, the game and its business methods are being criticized. It may have famously resisted a hostile takeover before, but could it be more open to a friendly takeover now?

What I can say, is that we are less than three weeks away from 2022 and we already have the two biggest game acquisitions in history (the other is Take-Two / Zynga). There will be more.