16 July 2023 , 06:00
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Games industry consolidation ultimately leaves players with less choice in future, no matter how much the Microsoft Activision deal benefits Xbox Game Pass subscribers right now.
It’s not every week that one person’s opinion forever changes the future of an industry. However, with it recently coming to light that Microsoft had won its case against the FTC’s preliminary junction, that’s exactly what has happened. In short, a US Federal Court judge elected to halt the FTC’s attempted blocking of the Microsoft Activision deal, meaning that Xbox has essentially been given the all-clear to welcome Activision Blizzard into the first party family of Xbox studios.
Getting to this point has been a messy process and not without struggle, sure, but it’s the outcome both Microsoft and industry analysts had always predicted. The decision ultimately came down to – as Judge Corely’s statement puts it – the FTC’s failure to prove that the “vertical merger in this specific industry may substantially lessen competition”. Call me old-fashioned, but taking one of the three largest remaining independent publishers – the other two being Ubisoft and EA – off the table most certainly will end up lessening competition.
I don’t voice my frustration directly towards the judge, of course; she had to fall on one side of the fence, and the five days taken for the decision to come in tells me she thought long and hard about it, weighing up all the options. The problem is that neither the US Federal Court nor FTC are experts in the video game industry; the only party in this case that is qualified on the topic is Xbox, which has unsurprisingly worked out in its favour.
But enough about the decision itself… At the time of writing, Microsoft only has to convince the UK’s CMA (Competition and Market’s Authority) that its acquisition of Activision Blizzard wouldn’t be anti-competitive in order for the deal to be approved worldwide. All signs point towards this ultimately happening with caveats for Xbox Game Pass in the UK. I can’t shake the feeling that this could end up having drastic ramifications for average players in the long term, regardless of how many seemingly sweet promises Microsoft continues to make Xbox players right now.
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There are plenty of reasons for this, yet the fact of the matter is that less publishers being able to operate independently will ultimately see the barriers to freedom rise, removing player access to a product they were once able to enjoy as Xbox attempts to bolster its exclusive offerings.
Take Call of Duty, for example. Certain folk will point to the fact that Microsoft has promised that the franchise will remain on other platforms for a decade. That’s all well and good. But guess what? It was guaranteed to remain on other platforms before Microsoft tried to purchase the IP.
Future imperfect
Microsoft won’t say it now, of course – not while negotiations with the CMA are ongoing – but if the company didn’t harbour the ultimate goal of making franchises like Diablo, Call of Duty, and Crash Bandicoot platform exclusives, then why purchase Activision Blizzard at all? Microsoft has already done exactly that with Bethesda's stable of IP including Redfall, Starfield, The Elder Scrolls 6 and almost certainly future games from the studio.
Microsoft is playing the long game with its future Xbox prospects, looking to purchase its way back into being on equal ground with PlayStation following two generations of its own studios failing to deliver AAA exclusives on the level of what we've seen on PS4 and PS5.
If Activision Blizzard were to remain independent, getting the likes of, say, Diablo 5 (which itself will likely take another 10 years to make) on PlayStation consoles wouldn't even be in question. Both Xbox and PlayStation players could get in on the action. But with Activision Blizzard now suddenly becoming a first-party studio, Xbox realistically has no incentive to place the Diablo 4 follow up elsewhere if it wants to ensure players don't stray from its platform.
The immediate benefit I can think of that Xbox players might get from the Microsoft Activision deal is the addition of more titles on Xbox Game Pass. You see, while PlayStation and Nintendo still do well out of selling games piecemeal to players, Xbox is taking a different tact by gunning for subscriptions. This means trying to constantly feed its content-hungry service with new games, as every new first-party Xbox game launches on it day one.
In theory, Xbox Game Pass makes playing titles more accessible. For just a fraction of the cost of a usual AAA release, you can enjoy a smorgasbord of fresh content. All while Xbox makes more money from subscribed players annually than it likely would compared to if it sold what few AAA exclusives it's been able to release individually.
The problem is that Xbox Game Pass – much like the mobile games market before it – doesn’t increase the value of video games in most people’s minds. Quite the opposite. It may take a while, but the rush to get as many titles as possible on Xbox Game Pass represents a race to the bottom.
And that’s exactly what I believe is likely to happen as a result of the Microsoft Activision deal being approved. By making a selection of big-budget franchises (eventually) exclusive to one platform, players on other platforms are at risk of losing access to them; unless they make the expensive choice to purchase every available console so as not to miss out.
Worse still, there’s no guarantee that this will be the last acquisition Xbox plans on making, which could force rivals PlayStation and Nintendo to make similar moves for fear of being damaged further in the long run.
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Much like how publisher independence gives players more options of how and where they choose to spend their money, the talent pool of those working on the games themselves is equally allowed to flourish in an independent, free market.
At first with Bethesda and now Activision Blizzard, Xbox’s moves are antithetical to this idea, and runs the risk of being bad for gamers in the long term.