Funny how people keep saying this but the major console sales charts have Nintendo on them. Nintendo beats to their own drum but they are competing for some of the same dollars that Sony and Microsoft are competing for.
The way I've seen people talk about Nintendo online since the Wii, it's always been "they're in their own lane" and aren't competing with Sony & Nintendo i.e by providing a similar high-performance gaming platform. Which is technically true.
But it's also true that, especially given the drift of many 7th-gen gamers towards mobile, that Nintendo, Sony & Microsoft are competing for some crossover of the same gaming audience, even if Nintendo's competing for a smaller share of that crossover in demographics that Sony & Microsoft do.
Just about every major player has made acquisitions in some form to improve its competitive positioning. One to do better, or another to stay ahead. Microsoft's purchase is historically large, true, but I see it as not too different from Sony adding to its already great list of internal studios. The key difference between them is Microsoft is buying incredibly famous and popular gaming IP on top of game studios.
Yeah all three have made acquisitions, but the reasoning behind them is what really matters. Sony acquired Psygnosis to get a head start as a platform holder, buff their flediging Sony Imagesoft game publishing label, and get good SDK tech. All of that was to get PS off its feet and once it did, they didn't make any further publisher acquisitions until decades later. Nintendo acquired Retro to fill in a void left after selling their shares in Rare (and then Microsoft acquiring Rare). Other than that, though, they've acquired very few if any developers, let alone publishers.
Microsoft's already gone through this acquisition game in the past, when they bought Rare, Bungie etc. But the reason they're trying to buy publishers now is 1: the false idea that GamePass needs "constant content" that somehow can't already be made with the 23 studios MS already own and 2: to address Microsoft's own decision failures with Xbox in terms of management over the past two decades.
I also don't think Microsoft "need" ABK. I thought Bethesda alone and acquiring those studios plus IPs such as Dishonored, Doom, Elder Scrolls, Starfield and Fallout were more than enough to shift the competitive landscape. Activision Blizzard King joining Microsoft only does that even more, just not to a degree I would classify as dangerous to competition in the industry.
Okay but here's the problem: the landscape would only be "shifting" because Microsoft purchased companies to do it. They did not actually earn it through the virtue of what product was provided to end customers to purchase, and in fact them buying publishes may not even bring the shift in the market you think because what that really does is just increase MS's gaming revenue.
It doesn't guarantee console sales increase, or that game sales increase, either. It doesn't guarantee a larger install base, even. Which I guess are things MS could use in their defense in debates with regulators, but I digress.
That said, I don't see Microsoft stopping after Activision Blizzard. I believe ones at the size of ABK are finished after the deal closes, but I firmly believe they're still interested in getting Crystal Dynamics and Eidos and the Tomb Raider and Deus Ex IPs from Embracer, and I truly believe Microsoft wants CD Projekt Red and the Cyberpunk IP (Witcher also) and will immediately divest something like GOG in order to get them. But if not CD Projekt Red, I definitely eventually see Microsoft acquiring Certain Affinity and possibly other developers they're working on first-party titles with, such as possibly IO interactive, the team working on Contraband, and who knows what other studios.
I doubt Embracer wants to sell any of those teams, considering they already have deals with companies like Amazon to publish the upcoming Tomb Raider game. Plus, MS don't really need those IPs; they're already using Indiana Jones, and have enough sci-fi WRPGs between Fallout, Starfield, and Outer Worlds. I strongly doubt the EU would allow MS to buy CDPR, considering CDPR are one of the biggest (if not THE biggest) games publisher in Europe. Simply divesting GOG would do nothing because MS would also have to sell off the IP rights CDPR acquired for GOG to help it remain relevant, and if you yourself are saying they are buying publishers to also acquire IP (which I would say borders patent trolling), then they won't do it.
Certain Affinity, though, I can see them acquiring. It makes sense from a history POV so I don't see why not. Avalanche could possibly be another, though since they make the Just Cause games if MS were to do that and heavily push that series, it probably opens up Sony to have a lot more leverage with Ubisoft over the Far Cry games going forward.
Microsoft wants a huge gaming factory to feed Game Pass with lots of major first-party games on a consistent basis. When one set of studios or publisher needs more time, the other studios or publishers are dropping big releases.
And what's so different between that and the current console model that already exists? Consoles need regular big releases too, else they can stagnate in sales. We've seen that happen in the past and we're already starting to see it with Xbox this generation.
That said, we don't see the excuse that Sony, Nintendo or even Microsoft need to buy up tons of developers & publishers to "feed the beast" that is a games console with regular new content, why is that? Is it because the direct sales model has proven itself time and again whereas the subscription model still struggles to prove it can provide even a fraction of that type of revenue & profit for 3P devs & pubs?
If so, and the answer for MS is to just buy up those companies, then how is that proving the subscription model actually works? If anything, it would prove the opposite. The service existing on its own should be attractive enough to make 3P devs & pubs want to bring their content to it Day 1, but it clearly isn't. They either need financial incentives or wait until some months or years later to bring those games to services.
The consistent results and growth, I think, is already evident from 2021. Everything that transpired that year for Xbox from a first party perspective led to excellent results and momentum for Xbox Series consoles, as well as for Game Pass. Xbox even managed to gain some market share on Sony for about 2 straight quarters if I'm not mistaken.
I wouldn't toot that horn just yet. Going off some recent discussions on sales numbers (including figures from Microsoft themselves), I wouldn't be surprised if actual sold-through sales for Xbox Series by the end of the year is under 16 million. Which would be tracking ahead of the 360, but...actually tracking
behind the XBO (18 million "activated" by January 2016, 26 months after its launch).
That might be a reason we haven't gotten any PR from Microsoft about Series outpacing 360 & XBO for the second half of the year. Even if they stopped winning NPDs, I would think they would want to signal they're still tracking ahead of XBO just as a sign of confidence to the market and shareholders, but they haven't done that. Instead they've given out relative sales figures (in statements intended for regulators) that when combined with other credible sources and realistic sales trends/rates, probably put Xbox 2 or so million behind XBO at this point. (> 16 million vs 18 million).
Just my opinion, but I'm pretty confident about that estimate.
I think it would be for the old Xbox. New Xbox is chasing something far more ambitious from Game Pass in terms of the regularity with which first-party content appears, and I think Microsoft is ever conscious of the 3-4 (even 5 year) gaps that can come between major releases and wants to be able to fill as many gaps as humanely possible.
So why can't they do this by the service just providing value naturally and 3P devs/pubs staying independent while choosing to bring their games to the service Day 1 of their own volition?
Which of these two answers sounds more believable: that Sony are somehow preventing ALL 3P companies from putting ALL of their big games (even games Sony have no co-funding, co-marketing or co-development partnerships with) Day 1, or...the majority of 3P companies simply not seeing the value of doing Day 1 in GP worth it when they get a lot more through direct sales of their games?
I don't think a Japanese publisher is off the table. I don't think they need one, but it wouldn't surprise me to see Microsoft try for one. I, for example, never thought they'd ever go for anything bigger than Bethesda. So at this point, I just stand and watch what they do.
The only Japanese publisher they have any realistic chance of picking up is Sega, and even that will come with some contention because Sega & Nintendo have a pretty strong relationship plus the Sonic games sell the most on Nintendo systems these days by a big margin. So some of the resistance people think Sony are being petty for with the ABK deal, they would see a fair bit of that from Nintendo if MS were to try acquiring say Sega.
A 10-year deal for Sonic on Nintendo platforms means nothing if Nintendo thinks those same Sonic games going Day 1 in GamePass would hurt their revenue off global sales of the games on their platform. And that's even aside the fact Xbox is insignificant in Japan compared to Nintendo or Sony (this also exposes the hypocrisy in some of the fandom arguments because they either have to admit MS are insignificant in Japan (and accept all of what that comes with) and have no means to grow there, or are growing in Japan and want to expand massively (which would put them in direct contention with not just Sony but Nintendo as well in that same market)).
The difference here is that not every other company that would make such a purchase as this one will necessarily have the same degree of commitment or respect for gaming as Microsoft has demonstrated through Xbox. They bought Minecraft, a juggernaut in its own right, and they've been pretty responsible caretakers of that IP. They've even continued releasing new games in the universe on rival consoles (Minecraft Dungeons), and are about to again with Minecraft Legends.
Where was this care of commitment from Microsoft when it came to Halo? To Rare? To Lionhead? To Bizarre Creations? To Crackdown?
The reason Minecraft is well off is because Mojang pretty much do their own thing 100%. MS is just there to get the money. ABK, according to MS, would act as a branch of Microsoft Gaming, reporting under Phil Spencer. Mojang is not arranged the same way within the Xbox division.
The reason I can't see any concession is because in every single segment of what ABK is as a gaming company, Microsoft isn't so commanding in any one area that I think regulators will demand specific things of them. Microsoft has very little presence of worth in the mobile space. In the console space, it has been demonstrated through Nintendo's success and dominance that games like Call of Duty aren't explicitly necessary to compete at a high level. And despite its popularity on Xbox, Playstation and PC, there are plenty other games from other publishers that ensure Call of Duty doesn't have too dominant a share of videogames published on either 3 platforms.
It's not about Microsoft's market share in those specific segments so much as Microsoft as a total entity within the tech market and how that can be leveraged in ways other companies cannot realistically compete with. We are already seeing that with the ABK acquisition: it is being entirely funded by money MS generated through non-gaming markets, because Xbox as a division has never generated $69 billion worth of net profit, is not valued near that amount, and could not generate that much in net profit even in 10 years of record net profit.
Microsoft having little presence in mobile gaming, or "last place" in console gaming doesn't mean much considering the reasons MS have found themselves in these positions up to this point, are because of bad business decisions and bad brand management. Acquiring companies in and of itself won't address those problems. Also if something like COD isn't needed to compete at a high level...why are MS looking to acquire it? And why do people say they would be unwilling to divest it into its own company, if that would help ensure they could actually get everything besides it (and still retain partial ownership of COD through said new company)?
You can't say something like COD or the various IP ABK have are "not needed" on one hand, then ignore the reason MS are trying to acquire them in the first place on the other.
Call of Duty is ONLY released on PC operating systems currently, so Microsoft acquiring it also wouldn't really take anything essential for the success of other operating systems. In fact, Microsoft acquiring Call of Duty effectively brings it to even MORE operating systems thanks to Game Pass Cloud Streaming.
Those wouldn't be native versions though, just streamed versions. And let's be real: how many people even want to play COD via streaming? Why would they? How many people are playing Fortnite via xCloud (it's not many)? If COD on Linux, MacOS etc. were acceptable through cloud streaming, why did MS offer a 10-year deal to Nintendo for (I'm assuming) native builds of new CODs on Nintendo systems?
Aren't Nintendo's systems even weaker than a lot of PCs running Linux and MacOS? I'd think cloud streaming would be more feasible on a Nintendo system than those platforms. And why would Microsoft make native versions of COD for Switch, yet not do so for competing PC OSes?
Activision Blizzard have added multiple new game studios via acquisition in the 6 months prior to and the 6 months after the announcement of the acquisition. I don't see that being stopped because there are laws by which certain transactions below a specific threshold can't be reviewed.
The question is what would happen to those after they expire if MS own ABK by then.
All those games on Game Pass for such an amazing price are really the only big benefit to consumers this transaction ever needs to have. It's that big a deal.
Nah. ABK should sell to Newgrounds then; they'd be able to provide COD for free! Since everything else on Newgrounds is free, after all. You don't even need to pay a subscription fee, so it's actually legit free!!
And the benefits of Game Pass don't just stop with the price of the games themselves, but also the price of the hardware needed to access them. Cloud Streaming makes an Xbox console or even a high end PC not necessary for many of Activision Blizzards titles. Xbox Game Pass is on weaker PCs, tablets, smartphones, chromebooks, linux computers, samsung TVs, LG TVs, various cloud handheld devices. Those right there represent massive consumer benefits that are immediate upon closing of the transaction. That's one of the biggest tests for any merger, does it benefit consumers.
Okay but how many players has that actually generated? Like you said, GP is already on a lot of devices via cloud streaming yet...growth has stagnated? This soon, already? They're on more devices than ever but at most have only gained 4 million subs over the year? And there's word they've actually gained less!
Theoretically it may benefit customers but in reality it seems like most customers don't care for it. In the event getting ABK games in Day 1 wouldn't drive actual sub counts magnitudes higher, it could be argued that the theoretical benefit of having GP on so many devices is just that: theoretical. And therefore, a waste in resources and company ownership.
Not only that, because this is very much a vertical merger much more so than it's a horizontal one, money can and will be saved by Activision Blizzard King's operations over time, which will benefit consumers yet again by making it less likely that the cost of services go up. Any eventual rise of the price of games to $70 has no impact on Activision Blizzard content, since they were already $70 before Microsoft's involvement. So Activision Blizzard's games don't become more expensive after the transaction is complete. They only become more affordable and accessible through Game Pass.
Bro they're already increasing the cost of their games to $70 next year, if GamePass led to more game sales, why would they need to increase the games to $70 when they could just sell more at $60 instead? At least Sony have never made an argument that PS+ or PS Now increased game sales; for them moving to $70 was partly to account for inflation and rising production costs, and partly to generate more revenue.
Which is a very corporate thing to do, but at least it's upfront. MS have a new ad-based GP model coming next year; if they want to push revenue from game sales more, and they've already raised prices to $70, then they will likely increase the cost of the GP service overall, next.
There's also no guarantee that Call of Duty comes back to Steam if not for Microsoft buying Activision Blizzard. They've been away from steam for many years without issue.
But ABK already started bringing the games back to Steam while not being owned by MS.
What do you mean we haven't seen any freedom with Microsoft's studios. That's simply not true. Obsidian is a perfect example of that. Pentiment, Grounded. They got Avowed greenlit and even a sequel to the Outer Worlds. They are the very example of "studio freedom."
I meant outside of examples like Obsidian.
Ninja Theory with their MP game, Double Fine is yet another example. They were granted so much more freedom and support that they vastly improved Psychonauts 2 in numerous ways, including boss fights, that were originally not going to be in. InXile has also talked extensively on the freedom they've been granted and are currently on a major AAA FPS RPG project. Turn 10 wasn't pressured to keep releasing more motorsport games and was allowed to take their time to reinvent Forza as they please. Rare is being given all the time they need to work out their next project. Playground CHOSE fable, and are getting to make it their own way and show it when they are ready. Ninja Theory is getting all the freedom they need on Hellblade II and are working on Project Mara. State of Decay dev and others have been continuously expanding, created a new studio focused, I think, on animation.
Bleeding Edge died in less than a year. Psychonauts 2 was mostly finished before MS acquired Double Fine, but they did help fund for some additional content (which DF could have technically gotten through another round of crowdfunding but, anyway). We've seen nothing from inXile's game despite getting a CG trailer over 2 years ago. Turn 10 only recently got that freedom after 15 years of sticking to the same Forza formula.
Rare need all the time in the world & a miracle to save Everwild from development hell. Playground wee only able to work on a different MS IP after being acquired, and may be a bit over their head with Fable. Project Mara is seemingly still a tech demo and Hellblade II is taking longer to come out than sequels of AAA games with prior entries released AFTER the first Hellblade.