Having seen the insane amount of consolidation and acquisitions in gaming that have punctuated the start of 2022, it felt like a good time to take a look at what this might mean going forward – along with some thoughts on the future direction of the industry.
So for some background before we dive deeper, we thought Take Two Interactive (GTA/NBA 2k/Borderlands) snapping up mobile game maker Zynga (Farmville) for over $12B in January was a huge deal but it soon emerged that Microsoft (Xbox) were preparing to swoop for Activision Blizzard (Call Of Duty/World Of Warcraft/Overwatch) in a stunning deal worth more than $68B! Yes you read that right, SIXTY EIGHT BILLION DOLLARS! Then Sony (Playstation) bought Bungie (Destiny) for $3.6B – nowhere near as much as the other deals but still a LOT of money. And breathe…
We can quickly talk about the Take Two/Zynga deal as it seems to be less interesting than the others. It looks likely that this was a play by Take Two to essentially buy their way into mobile gaming, something that has happened before with Activision Blizzard (bought Candy Crush developer King), EA (bought Glu Mobile/Playdemic) and Tencent (who bought Clash Of Clans developer Supercell way back).
Xbox’s acquisition of Activision (and just a quick note to say I’m presuming none of these deals fall apart and proceed as both parties expect) gives them access to a huge amount of game properties and developer talent. Hopefully this might even mean that older, forgotten IPs get a second chance with a reboot, maybe bring back an older game with a fresh new perspective or twist?
Microsoft had already bought legendary studio Bethesda in 2020 which makes their potential line up of games extremely tantalising to gamers. Huge franchises like Call Of Duty, Fallout, Skyrim, Doom, Overwatch and Crash Bandicoot now sit within Microsoft, not to mention newer game worlds from Dishonored, Deathloop, Sekiro, Rage and upcoming sci-fi title Starfield.
The majority of these will be Xbox exclusive on console but interestingly Microsoft don’t plan to charge for people to play them. At least not directly. Their Gamepass service, essentially Netflix for games, has been wildly successful for them (in terms of visibility and consumer experience, rather than profit) and Microsoft has committed to putting their newly released games on the service upon release. So whereas before you might’ve had to make a choice between the new Call Of Duty (£50) or the new Doom (£50) you could potentially play them both on Gamepass for your £10.99 a month. Of course I doubt Microsoft would schedule the two to release in the same month but you get the point.
Acquiring all these game franchises and studios makes total sense when you look at Game Pass. Who wouldn’t pay £10.99 a month to get a lot of great, big game titles? I mean, I would but as a PlayStation only user I currently can’t access Game Pass. Which brings me on to my final point for Microsoft’s plans: Is their end game to make Game Pass available on PlayStation?
Probably sounds insane, right? But at some stage it might make more sense for Sony to just allow Game Pass as an app on the PS5 and get a cut of revenue that they otherwise wouldn’t see anything of. With Sony now launching their new PS Plus service (as a rival to Game Pass) perhaps the odds of the Microsoft service appearing on PlayStation are smaller but I still think it would be a huge win for consumers if it happened in the future.
Speaking of Sony’s new streaming service, it’s interesting to me that they will be keeping their big, first party games away from the service – at least for a period following release. I feel like that’s the only way a service like that can be sustainable, in the same way films have a theatrical window before hitting streaming services – to maximise income to fund further projects.
Sony’s acquisition of Bungie gives them access to a ‘live game’ expert, with years of experience looking after the Destiny franchise. This could be valuable as a lot of games move to that model and even the Destiny IP itself could be something that Sony look at in terms of television/film productions – another element of the industry that is seeing serious movement, with lots of game adaptations appearing in streamers (Netflix etc.) press releases.
It certainly looks like we haven’t seen the end of the consolidation of the games industry. Square Enix recently sold off some of their Western developers and titles, perhaps a sign of an impending take over? In my opinion it’s doubtful Microsoft will make any more purchases while the Activision deal is still in progress. Might Sony stump up the cash for Square Enix? EA snapped up Codemasters last year but perhaps EA itself might end up acquired in the next few years. Would EA be an attractive target to a Netflix or Disney for them to broaden their portfolio beyond TV/Film?
Certainly a lot to talk about and the contraction of the games industry shows no sign of slowing down – it will be an interesting few years, to say the least!
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