Now that Microsoft has been given the green light to pursue its acquisition of Activision Blizzard King in the U.S., we have seen a whole range of opinions from various members of the gaming world as to whether this will be a good or a bad thing for consumers. With the deal likely to be finalized in the near future, now that most regions (except the UK) are on board, we decided to have heads clash and talk about whether the merger is a positive or negative change for the industry, with Alex defending the acquisition and Ben opposing it.
Alex – For:
There is every reason to be cautious about the Activision Blizzard acquisition. We are entering uncharted waters with this huge gaming deal, as Xbox takes control of one of the biggest publishers out there, maker of one of the biggest franchises in Call of Duty. And yet, I believe much of Sony’s whining about how this is going to give Microsoft a gaming monopoly is exaggerated. If the deal goes through (and with each passing day it looks more and more like it will), it in no way means the end of the world for Sony, nor does it give Microsoft a gaming monopoly.
It certainly gives Microsoft some skin in the game, but if we look at the way the gaming market has shifted over the past decade, Xbox has largely fallen by the wayside. There are die-hard Xbox fans, but Sony and Nintendo have long been leaders when it comes to console sales and the reception of their exclusive titles. Microsoft’s strategy of buying up everything to hopefully make a great Xbox exclusive has been very volatile, but with a giant like Activision Blizzard by its side, we could see a shift in this pattern. Even if you think I’m just huffing copium here, and that Xbox can’t return to its glory days, that certainly also means that the Activision Blizzard acquisition wasn’t a bad thing, because it didn’t give Xbox a monopoly at all, regardless of whether we get some great games out of this or not.
In my opinion, the real reason Sony went after Microsoft so hard in court is because it prefers not to face real competition. From a business perspective that is understandable, but we as consumers are only going to benefit from competition. If Sony and Microsoft compete against each other like the days of yore, it is more likely that both giants will bring their A-game to lure consumers to each platform. And while we are talking about games, we might as well talk about the likelihood that long-running franchises of Activison Blizzard could very well make a comeback thanks to this acquisition. We won’t spend too much time on hopes rather than real reasons why this acquisition isn’t a bad thing for gaming, but the chance of a real Spyro or Guitar Hero return should be more than enough to get you excited about the prospect of the deal going through.
One more important point before I no doubt get ripped apart by Ben. I think that if this deal goes through, Xbox can hopefully restructure Activision Blizzard to remove those who have been the reason for its massive decline in reputation over the past few years. This probably sounds as far-fetched as a Spyro return, but with Xbox taking over, there is the chance that those at the top who oversaw the incredibly bad workplace culture at Activision Blizzard could be shifted. We live in a world where these guys – no matter where they end up – will have fat salaries, but hopefully for the sake of Activision Blizzard, some restructuring may take place when Xbox takes over. Again, this could very well not happen, but it certainly won’t if Activision Blizzard is left as is. Overall, though, I think the competition created by the deal in the gaming market is enough to return the favor. Call of Duty is a big deal, but there are plenty of other games that can also sell millions of copies and consoles.
Ben – Against:
I’ll be honest, I never really supported this deal. I love Xbox, in fact I would say I am primarily an Xbox fan when it comes to choosing between the different console families, but at the same time I understand that Xbox is a Microsoft product and Microsoft is literally one of the biggest companies in the world. The company that Bill Gates founded is worth so much money that it is hard to fathom, and this is exactly why Microsoft can just throw $70 billion at a game publisher. To get an idea of the true value of that amount, if we look at Forbes’ valuation of the top 30 soccer clubs in the world, that total comes to less than what Microsoft pays for Activision Blizzard King. It’s really stupid money.
But the value of the deal is not the only reason I think it’s silly for Microsoft to buy this publisher. The truth is that Xbox and the Xbox Game Studios family have been a shadow of what it should be. Microsoft already owns more developers than Sony, and yet has a pipeline that is far less efficient and generally delivers less compelling content. It shouldn’t have to spend absurd amounts of money to bring in more developers to match what its closest competitor is doing, especially considering that this competitor is worth peanuts compared to Microsoft.
If you also look at the wealth of IP that Microsoft already owns and cannot properly use to its advantage, you also have to wonder what good Activision Blizzard King’s IP will do. Sure, Call of Duty is Call of Duty, and Diablo, Overwatch, and World of Warcraft should be able to take care of themselves, but otherwise these companies are made up of smaller IP that is not being used well in the first place, so why should I trust that Microsoft will treat them better?
Many will say this deal is a win-win from a consumer perspective. Activision and Blizzard games on Game Pass at some point, perhaps even better stewardship of the rather horribly managed Activision at the executive level. All of these things are valid points, but at the same time I can’t help but be a little cautious about the promises Microsoft makes. Activision and Blizzard games continue to launch on all platforms, the hope that titles will come to Game Pass, etc. Let’s not forget that Microsoft is one of the largest companies in the world, and you don’t reach that size without putting your own interests above the needs of many. With that said, what will happen if Game Pass is no longer a sustainable business approach or if people move away from the service? What happens after 10 years when the Call of Duty deal with Sony expires? If I had to guess, we are heading toward a world where these huge franchises are Xbox-exclusive and possibly not even on Game Pass.
It’s not just this that worries me, it’s how this is a direct act of war by Microsoft. With Xbox wanting to consolidate such a huge portion of the gaming world under its banner, you have to assume Sony will want to do the same with its admittedly limited budget, which in turn will lead to further retaliation from Microsoft and so on. Think about it, if the massive Activision Blizzard King is on the auction block for the right price, what’s to stop these behemoths from fighting over Ubisoft, Square Enix, Capcom, CD Projekt Red, and even the bigger fish like Take-Two Interactive and Electronic Arts.
The game industry is worth an absolute fortune and it will only grow in value as the years go by, and to me this mega-merger is a sign of things to come and it frightens me. Microsoft does not need Activision Blizzard King to compete with other publishers and console manufacturers, it needs better management and a tighter pipeline, and to me this deal has always come across as greedy and unnecessary, and I see this ultimately leading to the rich getting richer at the behest of consumers and players.