The agreement between Activision or Microsoft? is expected to bring about several implications for the gaming sector.
Nevertheless, there seem to be opposing views on this pact as some argue that it could disrupt the crucial equilibrium among console platforms.
Despite one’s allegiance to a particular platform, the Activision/Blizzard collaboration with Microsoft has positive and negative consequences. What are some of these implications? Is it truly as unfavorable as perceived? Let us explore further.
Can you explain the agreement between Microsoft and Activision/Blizzard?
If you need a brief reminder of what the deal between Activision/Blizzard and Microsoft comprises, let’s review its details before analyzing its implications.
The agreement forged by Microsoft and Activision/Blizzard entails the purchase of Activision/Blizzard for a whopping $68.7 billion, resulting in it being the most extensive video game acquisition ever made.
Under the agreement, Microsoft gained ownership of renowned franchises like Call of Duty, Diablo and World of Warcraft for use on Xbox platforms. This acquisition heightens the appeal of utilizing Xbox Game Pass plus other services which feature popular titles such as Call of Duty.
There is concern that the acquisition of Activision/Blizzard by Xbox, which boasts a large portfolio of their franchises, could result in turning these multi-platform titles into exclusive Xbox games. Although certain provisions may regulate platform exclusivity after this momentous business transaction, its widespread impact cannot be ignored.
The possible issues that the deal could create for gamers.
The agreement benefits both the Xbox platform and its gamers; however, it carries numerous adverse effects for the gaming industry and enthusiasts alike – irrespective of one’s love for Xbox.
Xbox commands a significant portion of the overall gaming industry.
Since Microsoft purchased Bethesda for a whopping $7.5 billion in 2021, Xbox now has the opportunity to incentivize consumers towards buying an Xbox Series X|S by offering Bethesda titles exclusive to that platform. To play Starfield, one of their impressive AAA games, you’ll need access to an Xbox Series X|S console.
It is concerning that the Bethesda acquisition was only about one ninth of the size of the Activision/Blizzard deal. This could mean trouble for Xbox as sleek and influential gaming giant such as Call of Duty and Overwatch may go on to become their exclusives in due time, with Activision/Blizzard dominating a significant portion within this industry.
By securing exclusivity deals with Activision/Blizzard for popular franchises, Xbox could dominate the market and prompt consumers to purchase their Series X|S console as rival companies may no longer carry certain titles from these publishers.
Exclusivity is being prioritized by both Xbox and PlayStation.
The deal not only solidifies Xbox’s hold on Activision/Blizzard exclusivity and a significant portion of the industry, but also intensifies competition for exclusive content with competing platforms such as PlayStation.
Although Xbox Series X|S boasts of several impressive exclusives, obtaining Activision/Blizzard would significantly augment their collection. Historically speaking, PlayStation has been more proficient in securing exclusive games than Xbox.
The agreement establishes a standard for PlayStation to emulate the practices of its primary competitor, Xbox. As both companies strive for more exclusive content, consumers face limited options and must choose between platforms in order to access specific games.
The deal between Microsoft and Activision/Blizzard intensifies the competition for exclusivity among all platforms, which harms consumers by limiting their options.
Poorly handled agreements will lead to increased costs of games and services for customers.
Microsoft’s acquisition of Activision/Blizzard could potentially increase costs of games and services, as well as issues related to exclusivity.
The UK’s Competitions and Markets Authority (CMA) has investigated the deal, highlighting that a poorly executed agreement can lead to increased prices, decreased alternatives, and innovation.
The acquisition of Activision/Blizzard for $68.7 billion could exacerbate the increase in Xbox Game Pass subscription rates.
The acquisition of Activision/Blizzard could lead to Xbox failing to achieve anything that its competitors haven’t done for years, such as PlayStation acquiring Bungie for $3.7 billion in 2022 and integrating their unique content into Destiny 2.
The agreement cannot impact platform exclusivity for a minimum of 15 years, aligning with established patterns in the gaming industry.
Xbox has a primary focus on providing gaming experiences that prioritize the needs and desires of its consumers.
Despite concerns about the implications of Microsoft’s agreement with Activision/Blizzard for gamers, Xbox’s focus on providing options to consumers suggests a different perspective.
Even though Xbox has exclusive control over franchises such as Halo and ownership of staggering games like Minecraft, their emphasis is on giving you the freedom to decide how you enjoy playing.
Xbox stands out as one of the most user-friendly gaming platforms, offering several generations’ worth of backward compatibility for its consoles and the Xbox All Access program. By acquiring Activision/Blizzard, Xbox extends its pro-consumer principles to titles from this company.
Following Microsoft’s acquisition of the company, Bobby Kotick – its Managing Director – departed from his position as Forbes notes.
By incorporating Xbox’s consumer-friendly methods along with the leadership shift at Activision/Blizzard, this agreement brings optimism to a company in turmoil and showcases a favorable transformation for both customers and Activision/Blizzard.
The underdog of the industry is Xbox.
Even if Activision/Blizzard games give preference to Xbox services, there are still reasons that suggest the Microsoft and Activision/Blizzard merger won’t lead to a monopoly for Xbox in the gaming industry.
During the Microsoft acquisition of Activision/Blizzard, there have been several reports and criticisms from platforms such as PlayStation opposing the agreement.
As per Brad Smith, Microsoft President’s statement to Bloomberg UK, if one tracks the conversations on Xbox and its position amidst contenders in the industry, it is evident that Sony holds a whopping 70% of the global market share while we have acquired only 30%.
In addition, Brad Smith provided statistical evidence during the negotiations that highlighted PlayStation’s overwhelming lead with 286 exclusive games compared to Xbox’s mere 59.
It is possible that the competition between Xbox and PlayStation may intensify despite acquiring Activision/Blizzard, rather than leading to a monopolized industry.
Microsoft’s acquisition of Activision/Blizzard bolsters competition.
Although Microsoft’s agreement with Activision/Blizzard has some negative connotations, there are numerous reasons why its impact may not be as harmful as initially anticipated.
However, the agreement raises Xbox to a similar level as PlayStation, resulting in intense competition between gaming’s major adversaries. Enhanced rivalry translates to an improved industry for users.
