Why Microsoft's Activision Blizzard deal could be bad for gamers

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Wednesday, January 19, 2022

Microsoft's purchase of Activision Blizzard could hurt Sony and Nintendo players

The video game industry is consolidating. Need proof? Look no further than Microsoft’s (MSFT) decision to buy “Call of Duty” maker Activision Blizzard (ATVI) for $68.7 billion. The move, if it closes as planned in 2023, will make Microsoft the world’s third largest gaming company by revenue, behind Tencent and Sony, and give it a significant mobile gaming presence.

Just last week, Take-Two Interactive (TTWO), the company behind games like “Grand Theft Auto;” “Red Dead Redemption;” and the “2K” series, announced its purchase of mobile gaming giant Zynga (ZNGA) for $12.7 billion.

Sony (SONY), meanwhile, bought six game studios in 2021, including Valkyrie Entertainment for an undisclosed sum.

And let’s not forget Microsoft’s $7.5 billion purchase of Zenimax or Nintendo’s acquisition of “Luigi’s Mansion 3” developer Next Level games last year.

Studios and publishers being bought up isn’t new, and the Activision Blizzard move will be a boon to Microsoft, allowing it to better build out its Game Pass cloud service and mobile gaming operations. But it could also hurt gamers in the long run, forcing them, more than ever, to choose between Microsoft, Sony, or Nintendo, as the console makers increasingly snatch up third-party developers and publishers.

“When so much of gaming is owned by so few organizations, [it] makes me nervous,” Forrester analyst Will McKeon-White told Yahoo Finance.

Greater consolidation could cut off gamers from their favorite titles

Microsoft’s purchase of Activision Blizzard and last year’s acquisition of Zenimax means that some of the most beloved and most played properties in gaming will be now under one roof when the deal closes. “Call of Duty,” “Elder Scrolls,” “Fallout,” “Overwatch,” “World of Warcraft,” all call Microsoft home.

If you’re a Microsoft player, that’s great news. It means that all of those titles will appear on Xbox, or at least continue to be available on your PC for years to come. If you’re a Nintendo or Sony player, though, the deal could deprive you of your favorite games.

Console makers have always used exclusive titles from their own studios to get gamers to purchase their devices. Think “Halo” on the Xbox, “Uncharted” on PlayStation, or “Super Mario Bros” on the classic Nintendo Entertainment System. The console makers closely guard these first-party titles, ensuring you can play them only on their systems.