- Activision’s acquisition signals a transformative moment in the gaming industry, potentially redefining how gamers enjoy their favorite titles.
- The impact of this acquisition extends beyond the realm of consoles and PCs and into mobile and cloud gaming as well.
- Major companies like Electronic Arts, Take-Two Interactive, and Ubisoft may become potential targets for acquisitions or strategic partnerships too.
In the ever-evolving world of video games, change is the only constant. This industry thrives on innovation and competition, and its future is often shaped by groundbreaking deals and acquisitions. So, when Microsoft recently closed a whopping $69 billion deal to acquire Activision, one of the giants of the gaming world, it sent shockwaves throughout the community.
The acquisition of Activision by Microsoft represents one of the biggest moves in the gaming industry to date. I don’t doubt that we’ll be witnessing a significantly changed video game industry once the two companies are fully integrated. After all, this acquisition effectively leaves us with only two major publicly traded video game studios in the US, Microsoft and Sony.
The deal, which followed two years of regulatory investigations, protests, and speculations, has finally concluded. Microsoft now owns Activision Blizzard, and I’m sure the pressing question on the minds of every gamer right now is: what happens next?
The Acquisition’s Impact On Call of Duty
One of the most prominent franchises under the Activision banner is Call of Duty. This legendary first-person shooter series has become synonymous with blockbuster gaming releases. So, what can we expect for the future of Call of Duty in the wake of this acquisition?
Call of Duty, one of the most iconic franchises in gaming history, may undergo significant changes in the hands of Microsoft. The company’s vision has consistently revolved around transforming Xbox from a console-centric brand into a content-first platform. This philosophy emphasizes player engagement over console sales, something which even the Xbox chief and Microsoft CEO, Phil Spencer agrees with..
The business isn’t how many consoles you sell. The business is how many players are playing the games that they buy, how they play.” – Phil Spencer, CEO Microsoft Gaming
This philosophy underscores the future of gaming as a subscription-based model, rather than relying solely on retail sales. In such a landscape, Call of Duty could find itself as a flagship series in Microsoft’s game subscription service, Xbox Game Pass.
It’s important to note that Microsoft has already made a significant impact on the gaming industry through its acquisition of Bethesda’s parent company, ZeniMax. This acquisition brought popular franchises like The Elder Scrolls, Fallout, and Doom under Microsoft’s umbrella. As a result, Bethesda games are now available on Xbox Game Pass from day one of their release. The success of this strategy may extend to Call of Duty, meaning that future titles could launch directly onto Game Pass, increasing the service’s value.
What About The Impact On Gamers In General?
The future of gaming, under Microsoft’s expansive wing, may have a profound impact on gamers. As the company continues to push Xbox Game Pass, the subscription service will become more enticing with a growing library of blockbuster titles. Game Pass already boasts an impressive lineup of games, but with the addition of Activision titles, the service may become unbeatable.
In recent years, we’ve seen a shift towards games-as-a-service models. Subscriptions like Xbox Game Pass offer access to an extensive catalog of games for a monthly fee, rather than purchasing individual titles. Microsoft’s move to bolster this service with iconic franchises like Call of Duty, as well as other beloved classics such as Crash Bandicoot and Spyro, makes it an even more attractive proposition for gamers.
I mean, seriously, why buy one Triple-A game for $50-100 when you can play 300+ for under $10 a month? With the increasing popularity of cloud gaming and digital distribution, owning physical copies of games may become a thing of the past. I, too, own more digital copies of games than I do physical thanks to all the sales and discounts digital copies bring. As a result, I truly believe subscription services like Xbox Game Pass are likely going to be the primary way many gamers access new titles.
Is There A Competitive Response from Sony?
The Sony-Microsoft rivalry has been a topic of fierce debate and console wars for almost over a decade now. But now, in the midst of this industry-shaking deal, these two giants have joined forces in an unprecedented 10-year partnership. The focus of this historic agreement is to ensure the continuous availability of the Call of Duty franchise on PlayStation.
This binding deal, confirmed by Microsoft Gaming CEO Phil Spencer, secures the future of Call of Duty on PlayStation, guaranteeing its presence for a full decade. What happens after these 10 years are over is anyone’s guess at this point though. Microsoft could easily decide to make Call of Duty an Xbox exclusive after that, though potential backlash from PlayStation users and Sony might not make this possibility a reality.
From Day One of this acquisition, we’ve been committed to addressing the concerns of regulators, platform and game developers, and consumers. Even after we cross the finish line for this deal’s approval, we will remain focused on ensuring that Call of Duty remains available on… https://t.co/hMWjC58wRi
— Brad Smith (@BradSmi) July 16, 2023
How Does The Deal Effect Developers and Publishers?
The acquisition may bring about both opportunities and challenges for game devs. On one hand, getting their games into Xbox Game Pass could provide excellent exposure and potentially lucrative deals. However, the industry may witness a shift in the balance of power. As gaming subscriptions become increasingly popular, publishers and developers may find themselves becoming more dependent on platforms like Xbox.
In a world where more gamers opt for subscriptions, the sales of individual games could dwindle. This shift could have a significant impact on developers, as they navigate the evolving landscape of game development and distribution. This is evident in the fact that Microsoft has raised the prices of Activision games ahead of their inclusion in Game Pass, likely to squeeze one last round of profit.
The acquisition also raises questions about the visibility of indie games within Xbox Game Pass. With the spotlight on blockbuster franchises like Call of Duty, indie gems might struggle for recognition. As millions flock to the service for marquee titles, indie developers might face a more challenging environment. The risk of games becoming devalued in this landscape is a genuine concern for indie creators.
The Growing Mobile Gaming Market
Activision’s acquisition goes beyond the console and PC gaming domains. It’s a strategic move to solidify its presence in the lucrative mobile gaming market, something Phil Spencer’s already thought of trying once before. Through the acquisition, Microsoft gained control of King, the creator of the popular mobile game, Candy Crush. That’s right, now both you and your grandma can call yourself proud gamers under the Microsoft banner.
Mobile gaming has seen tremendous growth in recent years and is projected to reach over $122 billion in revenues by the end of 2023, surpassing both console and PC gaming. I mean, seriously, Candy Crush has a lifetime revenue of $20 Billion in comparison to Call Of Duty’s meager $3 Billion, and only one of these franchises has an almost decade-long headstart on the other.
However, there are concerns about how Microsoft will integrate mobile gaming into its overall strategy. While there is hope for cross-play between console, PC, and mobiles, the success of such synergy evident with the popularity of games like Fortnite, how it may carry over to Call Of Duty still remains uncertain. All we can do is wait and see how the potential next year launch of Microsoft’s mobile store goes.
Plus, with Apple producing phones that are strong enough to run Triple-A games now, it’s only a matter of time before mobile phones end up becoming the leading name in the console wars, letting you carry a pocket-sized game station with you wherever you are. You gotta admit, handheld devices are just more fun to use. PC master race who?
A Bright Future For Cloud Gaming
As already mentioned, this acquisition has cast a spotlight on the issue of cloud gaming. Concerns were raised about Microsoft becoming overly dominant in this space, and these concerns were partly addressed by the sale of streaming rights of Activision Blizzard titles to Ubisoft. However, the ever-changing nature of the cloud gaming market may minimize this as a significant win for regulators.
While Microsoft is keen on expanding its cloud gaming presence, the commercial reality of cloud gaming and the slow adoption of this technology means that divesting streaming rights is unlikely to damage the company. Microsoft could easily focus on day-and-date releases of new Activision games via Xbox Game Pass, further enriching its subscription service.
This move could easily convince users to simply spend a $10 subscription on Game Pass instead of buying the game itself. Still, while such a move sounds like a steal for all gamers, which I do have to agree that it does, game studios don’t think the same. Think of it this way, instead of earning profit off of hundreds of thousands of individual game sales, they’re only going to be earning a fraction of that from Microsoft’s subscription revenues.
So, while Microsoft treads carefully, competitors in the cloud gaming market have a tough hill to climb. Making Call of Duty available at launch for their subscription services could be a gamble they’re not ready to take, given the associated costs. Ultimately, it might lead to more paid Activision games available on cloud gaming storefronts, which benefits players with more choices.
Gotta Acquire ‘Em All
The seismic impact of Microsoft’s acquisition of Activision has sparked discussions about the future of industry consolidation. The gaming world is in a constant state of flux, marked by the changing dynamics among major players in the market. The consequences of these shifts could potentially lead to further mergers and acquisitions reshaping the industry’s landscape.
Prominent players like EA, Take-Two Interactive, and Ubisoft have now come into the spotlight as potential targets for acquisitions or strategic partnerships. The Microsoft-Activision deal has demonstrated that even major AAA gaming companies may be on the table for future mergers or acquisitions.
Who's up next target for acquisition?
Rockstar, EA, CDPR, Nintendo or … ⁉️ pic.twitter.com/IushD0Md0Y
— PeterOvo (@PeterOvo5) October 14, 2023
With competition, innovation, and creativity at the core of the gaming industry, this acquisition signals a thrilling era where gaming knows no bounds. The possibilities are limitless, and as gamers, developers, and enthusiasts, we have the privilege of embracing this exciting uncertainty. The journey into the future of gaming has only just begun, and it’s a ride that promises to be unforgettable.
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