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Is Microsoft creating a monopoly after Activision Blizzard deal?

Microsoft is on the brink of acquiring Activision Blizzard for a record fee of $68.7bn. Having already landed the Bethesda deal last year, is the conglomerate potentially underway with a full-scale gaming monopoly?

If the cringe, social media driven console wars are even still a thing, this is the equivalent of a nuke.

Throughout the pandemic, general interest in game showcases has dwindled with schedules thrown off kilter and physical attendances ruled out. If you’ve even managed to secure a next gen console then, seriously, well done.

As such, the element of competition between the likes of Sony and Microsoft has felt far less palpable than in previous years.

While that narrative has largely dissipated on the surface, however, that doesn’t mean that big moves haven’t been plotted under the radar. In-fact, revenue-wise gaming toppled the music and movie industries combined in 2021.

Microsoft’s Bethesda purchase last year showed that gaming conglomerates are now equipped to make multi-billion dollar coups, but no one was expecting the magnitude of deal that would be announced earlier this week.


Microsoft’s record deal for Activision Blizzard

Without so much as a prior whisper, Microsoft announced its record buyout of publisher Activision Blizzard yesterday totalling a casual $68.7bn. Yes, you read that right.

The gaming giant – still in the midst of a company overhaul following troublesome allegations – boasts a number of huge franchises, including Call of Duty, World of Warcraft, Overwatch, Diablo, and Candy Crush (a real boomer OG).

Microsoft expects the deal to formally close ‘in the fiscal year 2023,’ as regulatory approval will need to be needed for all of Activision Blizzard’s many market arms.

Within the next 18 months, however, you can probably expect to see some of its flagship titles appearing on Xbox Game Pass as a sign of good will.

Now boasting some 25 million subscribers, Game Pass continues to grow in scale with its library offering access to first-party titles at launch and a growing catalogue of games hoovered up from other studios. Through its web app and Xbox Cloud Gaming, its contents are also available to iOS and PC players as of last summer.

Since landing Bethesda close to a year ago, Microsoft has added some 20 of its titles to the Game Pass rotation – also announcing a first-party exclusive in development called Starfield. With Activision Blizzard on board, Game Pass is now even more of a powerhouse.

As you’d imagine, Twitter and Reddit have both blown up with the announcement and memes about Microsoft gobbling up industry cogs at Sony’s expense are everywhere. Is there anything in the theory that Microsoft intends to build a gaming monopoly though?


Is there a Microsoft monopoly in play?

The word from Xbox marketing chief Phil Spencer is that Microsoft ‘does not intend’ to pull communities away from Sony, but then again, he would say that.

Whether or not this move was intended to be a ‘monumental challenge’ to Sony, it has seen the company’s shares fall by 13% since. Frankly, there’s no way Xbox chiefs aren’t revelling in it.

In the so-called console wars of yesteryear, the consensus among gamers was that PlayStation would always be out in front due to its impressive list of exclusive properties – the likes of The Last of Us, The Amazing Spiderman, God of War, and Horizon being the pick of the bunch.

However, Microsoft’s change of tact has definitely shifted the parameters for the future of the industry. The accessibility and affordability offered by Game Pass is one that is extremely difficult for gamers to ignore today, especially when triple A releases shift for $70 a pop.

More to the point, when Microsoft flexes its financial muscle and secures deals that dwarf what even Disney paid for Marvel, you can see the potential for gaming to become more monopolistic down the line.

If Microsoft chooses to make Activision Blizzard titles exclusive, the likes of Sony and Nintendo will have to lean harder on their first party studios for output. The steady revenue afforded by annual releases of global titles like Call of Duty will have vanished. Meanwhile, Microsoft will be offering up an all-you-can-eat service.

By limiting the avenues for games to be developed, and with one dominant company raking in unmatched profits, creative diversity could very well suffer. Also, given Microsoft’s tendency to get distracted from making games by grandiose hardware ventures, it’s definitely a little worrying.

Beyond the immediate future, as talk of metaverse platforms continue to gather momentum, Microsoft CEO Satya Nadella strives to ‘play a key role’ in their development too.

While talk of an insidious agenda to dominate the industry is being played down, the company’s actions suggest that it wants to have a hand in wherever and however people are enjoying games.

Over to you, Sony…

 

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