If you haven't heard the news yet, here's the scoop: Microsoft just plonked down almost $70 billion to gobble up Activision Blizzard, the company famous for Call of Duty, World of Warcraft, and getting sued by California for sexual harassment and toxic workplace practices.
That's a big deal — arguably the biggest literal deal to ever grace the gaming industry. But even though it's massive news, there's a question to be asked: Is it good news for anyone besides Xbox?
Based on all the evidence, not really, especially in the longterm. Xbox gaining a much larger stake in the video game industry not only pushes industry consolidation into just a few large companies, but can stifle innovation among newer IPs and signal the death of others.
The biggest fish in the sea
Before we dive in, it's highly recommended you read what analysts have to say about Microsoft's Activision acquisition. Whether or not you agree with the theories presented there and in this article, they're all based on industry patterns.
Let's start with the obvious danger this supremely expensive deal presents: hyper consolidation of an industry already bound to a few key players, at least on the console and "AAA" game side of things. Sure, there are Google and Apple for mobile games, but when it comes to the PC and console experiences gaming enthusiasts crave, there are only a few big boys on the block. And now? Even fewer.
The competition's getting thin. As of right now, we have Microsoft, Sony, Nintendo, and whomever Microsoft's next acquisition prey is. EA, Square Enix, and Ubisoft's days are numbered at this rate. Sony doesn't have the cash flow to pull these sorts of seismic stunts, and Nintendo's been playing by itself in the corner for a long time now.
First Rare, then Mojang, followed by ZeniMax Media (Bethesda), and now Activision Blizzard — each time the maw of Redmond opens, it proceeds to take a bigger bite of the industry (it's gobbled up way more studios and companies than just those four, but said quartet are big ones). On the surface, there's nothing wrong with an acquisition. Big fish eat small fish; it's the way of the world. But what happens when one fish grows so gluttonous that its former rivals have little food for themselves?
Between Microsoft outright buying the biggest games on the planet and making sure everything of less importance is bound exclusively to Game Pass, it's a scary time to be a competitor. Sure, Sony's PlayStation division is doing well now, but you better believe some of the company's suits are sweating bullets thinking about future competition optics with Xbox market prospects growing exponentially more impressive by the day.
The fate of peripheral IPs
Even if you couldn't care less about industry health and the state of competition, think about what Microsoft itself will do with its newfound riches. There is the chance that now-CEO of Microsoft Gaming Phil Spencer will greenlight a lot of great projects utilizing Activision-owned IPs that haven't gotten much love in recent years. But there's also the chance Microsoft will let the niche items wither and die.
Take, for example, Crash Bandicoot. The orange fella didn't get much love from Activision for a while until a recent rebirth with Crash Bandicoot 4: It's About Time, as well as the kart racing spinoff and N-Sane trilogy. Will Microsoft give characters like Crash and Spyro their time in the sun? Look back at the only other major cartoon icon Microsoft gained from an acquisition — Banjo (of Banjo-Kazooie fame) — for your answer. Spoiler: Banjo has been in a retirement home for a long, long time, and Microsoft doesn't visit him. And don't even mention what happened to Conker.
The point is, there's a chance Xbox will pull an Ori and give Crash and Spyro love. But Microsoft has shown a preference for burly military guys and fast cars over loveable cartoon mascots. Two gaming legends may have gone from a bad home to a worse one.
Consolidating a nightmare of mediocrity
With regards to that mention of burly guys with guns and speedy automobiles, it's worth noting Activision's marquee property Call of Duty fits in very, very well with Xbox's lineup of franchises that will spin in place in perpetuity. Look at Gears, Forza, and Halo — great if you've played any single title in isolation (like the recent Halo Infinite or Forza Horizon 5), but all are redundant franchises if you look at their various installments as a collective body of work, even if a lot of recent titles have pushed those franchises forward. Call of Duty fits right in with that lineup. Competent, assembly line produced, and easily replicable potato chips for the masses.
The potato chips analogy fits in with Microsoft's Game Pass philosophy. Just like how Netflix puts an emphasis on binge-able content, Xbox looks set to create an annual lineup where the bar is "sellable quality" rather than, say, Sony's starkly contrasted emphasis on "tour-de-force experience" quality. Even Microsoft admits it's jealous of games such as The Last of Us Part II. It knows full well the difference between its titles and Sony's, although with the ZeniMax acquisition, the difference was made narrower than ever.
What if the Microsoft storm manages to overwhelm the competition, then? What if Xbox purchasing every related company under the sun lands us in a gaming era where Microsoft and its Infinity Gauntlet (read: Windows and Azure profits) make the gaming landscape such that instead of replicating the magic of rivals' games, Redmond simply overshadows and quashes them with its unending, subscription-bound lineup of digestible, amorphous gaming "content"? One company leading the charge on what is successful in an industry as large as video games can be dangerous for anybody who doesn't want to follow in its stead.
Too many dangers to imagine
There's a chance that Xbox will let its recently-acquired studios operate relatively autonomously and everything will be business as usual for consumers, with the only real difference being Microsoft making a lot more money behind the scenes every quarter. There's also the chance Microsoft will unintentionally bork everything it touches, ruining what once were capable studios, although that hasn't often been the case with its smaller acquisitions.
And speaking of chances, Switch and PlayStation owners better get ready for an era where, between Game Pass and acquisitions, the odds are solid a lot of their favorite franchises will be treating them like second-class citizens. Timed DLCs and exclusive releases are just the tip of the iceberg.
Perhaps everything will work out to consumers' satisfaction regardless of which ecosystem they prefer and the existing industry players will be perfectly fine with an Activision-shaped hole in their hearts. But the potential consequences of this deal, for thousands upon thousands of developers and millions of consumers, cannot be underestimated.
