So with a few days between this article and the news of Microsoft's purchase of Activision Blizzard, I wanted to touch upon the subject again to answer a few questions/comments that I've seen made across the internet from Xbox fanboys and Sony bros. There has been a lot of speculation and criticism surrounding the purchase. Some of it comes from a place of genuine curiosity. For others, it comes from a place of anger. Let's get right to it.
1."Microsoft's purchase is going to be stopped by the government because it will give them a monopoly."
I've seen this statement in response to the Federal Trade Commission and Department of Justice stating they would be conducting a joint review of antitrust merger guidelines the same day as the announced purchase of Activision Blizzard. While it hasn't been said that the purchase is the reason for this, it's tough not to think that this wasn't on their minds when they made the announcement. However, I don't believe that this purchase will fall afoul of any antitrust laws for one simple reason.
Disney completed its purchase of 20th Century Fox on March 24, 2019. The purchase pretty much made The Walt Disney Company, already a powerhouse in the entertainment industry, a damned near-monopoly. Suffice it to say, if you have enjoyed any kind of entertainment in the last couple of years, that money has probably been feeding the mouse.
Disney's purchase of 20th Century Fox was held up by red tape here and there, but ultimately it was approved by the US, European Union, and Chinese governments. Ultimately, I believe that there will be negotiations until the purchase is due to be completed by the end of June 2023, but it will end up being approved.
We must also remember that Disney was already acting like a monopoly way back before purchasing 20th Century Fox. An article from the same month as the sale announcement stated that Disney was "laying down the law" on movie theaters, forcing them to show films like The Last Jedi on theaters' biggest screen for up to four weeks.
Considering how COVID has ravaged the movie theater industry, I highly doubt that Disney has gotten more generous with its big showings. So yes, in conclusion, I don't believe any government is going to stop the purchase of Activision Blizzard.
2."Microsoft can't make their own content, so they're just buying it!"
What if I asked you what Naughty Dog, Insomniac Games, Housemarque, Bluepoint Games, Media Molecule, Sucker Punch Studios, Bend Studio, and Guerilla Games have in common?
Sony is no stranger to buying talent to keep things in-house with developers to which they had merely been licensing content. I would argue that Microsoft is following what Sony themselves started a long time ago. Could Microsoft have started from scratch? Sure, but why do that if you don't have to? If you have the means to purchase an already functioning video game developer/publisher with known assets that generate large sums of money, why wouldn't you?
3."Will Microsoft buy more companies?"
Short answer? Probably.
Long answer? Probably but not any time soon. Of course, there are a few possible exceptions.
The first question that has to be asked is, Why did Microsoft buy Activision in the first place? The answer for that is very, very simple: opportunity. Activision is going through what can only be described as a massive upheaval. There have been lawsuits brought against Activision Blizzard, which caused their stock prices to tumble with all the negative press generated. In the midst of all this, CEO Bobby Kotick refused to step down and began the process of trying to sell Activision in the face of such resistance. However, there has been speculation that Electronic Arts could be the next to fall. I don't believe that will happen any time soon; Electronic Arts aren't facing the same pressure as Activision did, and unless its stocks start to slip, it won't be a target for acquisition.
Out of curiosity, I decided to look up the rough value of several of the remaining major video game developers/publishers and was quite surprised by what I found. One barrier I always thought would prevent Microsoft from purchasing anyone else would be the cost, with Activision Blizzard costing them nearly $70 billion. A company like Electronic Arts would surely be well beyond their price reach now, right? Not so fast.
The Remaining Big Three:
Major Franchises: Madden, NHL, FIFA, Battlefield, Need for Speed, Mass Effect, and Dragon Age
Estimated value: $39.31 Billion
Major franchises: Grand Theft Auto, NBA 2K, Red Dead, Bioshock, and Borderlands
Estimated value: $19.01 Billion
Major franchises: Assassin's Creed, Far Cry, Tom Clancy Games, Rayman, Splinter Cell, and Just Dance
Estimated value: $6.41 Billion
The combined current rough value of The Remaining Big Three is $64.73 Billion, i.e., less than Microsoft just paid to purchase Activision Blizzard. Now, I want to stress this, just because the combined value of these three companies is less than that of Activision Blizzard doesn't mean that Microsoft will purchase or even attempt to purchase any of those companies. To even consider purchasing one of these companies, they'd first need to be willing to sell.
None of those three companies have ever made mention of wanting to sell. Then, of course, does Microsoft even want to write another big check anytime soon? I would argue no, not right now unless a massive opportunity presented itself. Back in late October of 2021, it was said that Microsoft had roughly $130 Billion sitting in their "war chest" that they might use to go make another "whale" of a purchase. That "whale" ended up being Activision Blizzard, of course.
Of The Remaining Big Three, I would look at Ubisoft as the sick and frail one of the herd. Not because they are the lowest in estimated value, but like Activision Blizzard, they are facing accusations of toxic work environments and sexual assaults, and they haven't done anything about it.
Ubisoft hasn't had the same hit on their financials as Activision Blizzard did, but could they? Possibly. If their stocks start to dip, I could see Microsoft swoop in to claim another prize. Ubisoft would be too tempting a target for them to pass up. Splinter Cell was the franchise that helped launch the original Xbox, and adding it to their lineup would be irresistible, in my opinion.
Yes, Microsoft would probably have to outbid other competitors for Ubisoft, but somehow I think the company valued at 2.2 trillion dollars would be able to outspend other bidders. Maybe they could purchase a smaller developer here and there, but I think they will take what they have and start working with their newly acquired assets.
4."Could Microsoft buy Nintendo, Sega, or even -gulp- Sony?"
Let me be very clear here. Even if it owned EA, Take-Two, Ubisoft, and more, Microsoft would be prohibited from purchasing controlling interests in Japanese companies. At least under current laws and the way business is conducted in Japan with "cross-shareholdings," i.e., the shares of Japanese companies are pretty diversified. However, Japan is changing, as is mentioned in the tagged article. Could another company acquire Nintendo, Sega, or even Sony someday? Possibly. I don't expect it any time in the next decade, though. Yes, Sega did announce a "Strategic Alliance" with Microsoft clarifying that it would not result in Xbox exclusive titles.
5."Microsoft is gonna blow Sony out the water!"
I'm a big fan of the Xbox and what it's been doing but let's be completely honest here. Playstation isn't going anywhere, and while Microsoft has indeed acquired enough powerful assets to make Thanos' gold gloved self have a seizure, they haven't snapped their fingers yet. Over the next roughly two years, Sony will launch the following Playstation exclusives: Horizon: Forbidden West, Spider-Man 2, God of War: Ragnarok, Star Wars: Knights of the Old Republic Remake, and Wolverine.
Xbox Studios is on the right track (Hello, Ori and the Blind Forest, Ori and the Will of the Wisps, Psychonauts 2, Forza Horizon 5, and Halo: Infinite), but it will probably take some more time before Microsoft starts landing body blows on Sony. However, this article lists many games being worked on, like Senua's Saga: Hellblade II, Outer Worlds 2, Wolfenstein III, Starfield, Everwild, Perfect Dark, Fable, and more. Yes, we probably might not see many of those games until 2023, but when they start to release...wow.
I want to close this out with a bit of an appeal to both sides of the "Console War." If you are fortunate to own an Xbox Series X, a Playstation 5, or a PC capable of playing all the latest games, or all three, I want you to consider yourself fortunate. For much of my life, video gaming was predicated on warring "sides," and honestly? It gets pretty damned toxic. Yes, we can poke fun at each other, but outright vitriol isn't necessary.
There are great games out there, and more are coming down the pipe. Even outside of Sony, Microsoft, and Nintendo, there are a ton of indie developers who make great games that are worth your time and money to play. Honestly, I'm excited to see what comes from Sony, Microsoft, and even Nintendo. And I don't have to be a dick about it, and neither do you.