By now, I’m sure you’ve heard the news that could potentially change the video games industry forever: Microsoft Xbox will acquire Activision Blizzard in a historic $68.7 billion deal, making it one of the largest gaming acquisitions to date. Discussions across social media and websites immediately raised both green and red flags for what this could mean in consolidating the industry. More importantly, Sony and PlayStation now stands in an awkward position, and almost undeservingly so.
Acquisitions aren’t new to the gaming industry. Ever since the early days of Nintendo in the 80s, gaming acquisitions have been happening, granted at a much smaller scale than they are now. Right now, there seems to be some kind of rat race happening with rampant monopolization in the industry, and there are some positives and negatives to look at from both a financial/business standpoint and creatively.
Xbox acquired Activision Blizzard for an insane amount of money, which makes their previous acquisition of Bethesda seem small by comparison. As of writing, Xbox has an enormous catalogue of first-party developers that almost dwarfs PlayStation’s own international studios. In a knee-jerk reaction that we’ve seen before, consumers automatically turned to PlayStation and asked “what are you going to do about this in response?”
I’ve seen arguments made for Sony acquiring companies like Konami, Capcom, From Software and Square Enix, and while none of those is out of the question, it also raises a few valid concerns about how acquisitions have escalated drastically over the last decade to the conglomerate rat race it has become today.
If PlayStation were to respond by acquiring one of those studios now, I’m sure there will be much celebration with a healthy mix of scrutiny. Is it likely that PlayStation will actually respond to Xbox’s acquisition by announcing their own? Perhaps, though this back and forth has become less about healthy competition today, and more about a complete sweep and domination of the industry. Sony has the budget and resources to trade blows, but if anything, Microsoft has proven that they have a lot more – and that’s terrifying.
Arguments about the benefits of exclusivity aside, there are some good things that will likely come out of this latest Activision Blizzard deal. The publisher faced the wrath of its own employees and the community once reports surfaced of alleged misconduct and sexual harassment taking place at the studio. Activision Blizzard executives who were ousted as perpetrators are still being given their retribution, but Xbox – who now have the microphone – are prepared to clean up the mess, and more efficiently too.
Sharing resources and parting knowledge across studios under the PlayStation and Xbox umbrella is also something that’s been a high point of acquisitions. For example, while Kojima Productions isn’t owned by Sony, they were primarily funded by them on the development of Death Stranding. Hideo Kojima communicated with Guerrilla Games on the use of their Decima Engine, which was what Kojima’s game was built on. This helped Kojima Productions understand the engine better and because they fell under the PlayStation family tree during development, they could influence each other and share ideas more freely.
From a business standpoint, acquisitions have another deeply concerning issue: consolidation of the industry. Xbox may not have the monopoly of the gaming industry, but they’re slowly inching their way closer to it – much closer than PlayStation is right now, even though they’re the dominant console platform. It’s easy to see why so many fans are either calling for Sony to start scooping up studios too or simply don’t want Microsoft to continue their reign of multi-billion dollar deals.
Either way, in the long run, the consumer is going to have a conundrum on their hands. Like Moses split the sea, PlayStation and Xbox splitting the gaming industry in two due to acquisitions and exclusivity deals means players will have to choose which ocean they want to swim in. Sure, one could make the argument that exclusivity ultimately sells consoles – and investors certainly look at it this way – but to what extent? Is it more beneficial to companies or the average consumer at the end of the day?
PlayStation may have dominated the previous generation, but I don’t think it will be the same case this generation. The PS5 is still the fastest-selling new console on the market, but it’s only a matter of time before players won’t be able to turn their eyes away from the attraction factor of Game Pass or Xbox’s fruits in the long run. By the middle of this generation and when it plateaus towards its end, the dust is going to settle and there’ll probably be no clear victor. Just an industry divided and conquered.