Yet another massive acquisition has taken place in the video game industry.
Microsoft’s streak of studio buy-outs has led to many questioning whether or not the particular acquisition of Activision-Blizzard will go through due to the potential creation of a monopoly.
To entertain this increasingly real possibility, we must consider the overall impact that this would have on the gaming industry.
The deal has drawn comparisons to previous media mergers such as Disney’s additions of Marvel, Lucasfilm and 21st Century Fox. It highlights an increasing need for companies to get more content available to distinguish their subscriptions and services, an area where Xbox has previously trailed behind.
Exclusive games have been in the industry almost since the beginning, although it is unclear whether or not Microsoft will make these newly acquired franchises like “Call of Duty” and “Crash Bandicoot” only available on the Xbox.
According to what Microsoft executives have said about franchises created by Activision, they won’t immediately become all-exclusive. Sony, their main competitor, is simultaneously putting some of their biggest exclusive games on available online stores to play on the PC.
This purchase in a long-term context shows how Xbox is building a steady, consistent library of games it can put onto its “Game Pass” service, which can change the price according to the company’s desires.
Because of this “Game Pass,” exclusivity does not matter as much now.
Combining Activision’s strong library of games into the subscription service with the increasing amount of involvement from tech companies like Microsoft itself creates the idea of an overall plan to bring in new talent to helm these gaming studios and franchises.
Whether Microsoft is willing to throw out executives other than Activision CEO Bobby Kotick is unclear, as the company’s glaring issues regarding its treatment of women have damaged Activision’s image.
Beyond all the bluster of exclusives and reports of Microsoft wanting to create its own “metaverse,” it is clear that Microsoft is more so seeking to gain the assets and channels of distribution that Activision has and to save the company’s brand.
It seems as though this deal could create massive consequences for the whole industry as aforementioned. In actuality, it really only matters to the few prolific game studios, according to game design instructor David Abzug.
“First off, it’s important to note that this is a big indicator of change in the industry but [the deal] itself is not that large,” Abzug said. “With the addition of Activision-Blizzard, Microsoft will control less than 10 percent of the [overall] video game revenue stream. They’ll be the second or third largest video game publisher on the planet based on how close they are to Tencent in any given year, but not the biggest. Sony is still the biggest publisher … right now. So how much of a change does it mean for the industry as a whole? Not very much.”
Much of the video game industry depends upon smaller studios that only consist of a handful of people or small companies that put out moderately or very successful releases which make up a large amount of the revenue in the industry.
Additionally, how this affects those heading into the industry is just as important.
“Full disclosure, I worked for Microsoft for eight years as a designer,” Abzug said. “I will bet long odds that Microsoft is a much bigger company to work for than Activision-Blizzard. But it’s not that huge of a change in what our students are going to be doing, to look for work. [The deal’s] repercussions are a bit deeper and more insidious than that, I think.”.
It’s going to take a lot of effort to keep companies in check to make sure that workers in this industry are treated correctly. Cases like Activision’s are only more ammunition in a large number of controversies in recent memory that have riddled the industry.
Similar cases seen at Ubisoft, Riot Games and other game developers have contributed to the increasing amount of scrutiny being placed on publishers and studios. Walk-outs and other displays of a struggle between workers and employers continue to wrack the industry with a sense of discontent.
In an industry known to place significant emphasis on “crunch” to get the job done at the cost of 60–80-hour workweeks, labor has been forced to center itself around this culture leading to less power being placed in the hands of workers.
This merger could potentially reinforce the existing conditions in the gaming world where employees have less power.
“Where I think it could have long-term effects on things, is specifically [that] there were groups inside of Activision-Blizzard in the process of unionization when this happened,” Abzug said. “Unionization, whether you think it is good or bad, is going to have an enormous impact if it ever occurs on the video games industry. And this has made that a little bit harder and it’s already really hard. That’s where I think 20 years from now, when people look back at it, one of the things they’re going to point to.”
