In a world where we have “monopoly” haphazardly thrown around and the long foretold “acquisition war” coming to fruition, it seems there are many unseen benefits for Microsoft and Xbox regarding the Bungie acquisition by Sony, and I thought I’d share.
- Incorrect “monopoly” chatter should cease
Even after the acquisition of Activision-Blizzard, Microsoft is still #3 in the gaming sphere behind Tencent and Sony (for now?). Sony, ahead of Microsoft, now becomes even bigger. Yet, even still, Sony will not have a monopoly on the gaming industry. Although most of us are aware of the correct definition of monopoly, the term has been [incorrectly] associated and linked to Microsoft for the past two weeks amongst social media. Now, that argument is rather deflated. It also puts to rest other facetious arguments about Microsoft being the only one to grow “in-organically” (which was an incorrectly used term, as well) that is a heavily used argument by dissenters.
Additionally, Sony (again, #2 in gaming) has announced they are not done with acquisitions, signaling to investors and shareholders they plan to keep absorbing players in the market. This further drives home this point but leads into my next:
- Less regulator pressure for Microsoft acquistions
If your main competition in the gaming sphere that happens to be bigger than yourself is not only actively making multi-billion dollar acquisitions, but publically announcing they’re not done, it puts less pressure on you from government regulators. This goes for ActiBlizz and future acquisitions.
Additionally, the argument that Call of Duty is intrinsically associated with PlayStation (and therefore this deal is anti-competitive) falls out the window when Bungie is intrinsically associated with Halo, Xbox’s biggest franchise. Halo is even mentioned in the official press release and the subsequent press releases by Jim and Herman. I understand that anti-competion law is specifically things like horizontal conduct, i.e., agreeing with your competitor to price fix or acting together to limit competition, or the aforementioned monopolization. Regardless, I thought I’d put to rest another common misconception being thrown around. Besides, Microsoft is doing none of the above, anyway!
- Destiny will undoubtedly be added to Spartacus; competition is great for us consumers!
If gaming history is anything to go by, you cannot rest on your laurels just because you’re successful. While Game Pass already has unmatched value even before Zenimax, Activision and Blizzard games are added, Microsoft has a vested interest to continue to make it best-in-class. And we benefit!
The only missing pieces to Microsoft’s wonderful and broad first-party portfolio, and ultimately Game Pass, are… you guessed it: Japanese games. Microsoft wanted to address their lack of E-rated content and family games, and boy did they! With Phil constantly mentioning a vested interested in Japan and the competitions strong Japanese roots, many are optimistic that we will see something soon. However, it’s always great to have healthy competition to nudge you along, especially when they just might have loads of Japanese content on their version of Game Pass. Anyone up for an Xbox 360-esque level of JRPG renessiance? Flashback intensifies
- Bungie remains a multiplatform studio; independent subsidiary
If you’re an Xbox fan, you’re obviously happy that Destiny and future IPs will not be PlayStation exclusive. Jim Ryan even specifically stated their future games will be published for “rival consoles” and being multiplatform is something they’re moving toward (albiet this mostly has to do with putting first party games on PC, but at least Bungie games will be on Xbox). But you might be missing the bigger picture. This is not the Sony of old; the Activision acquisition has turned the tables on leverage and power in the gaming industry. Many have surmised that if Sony was the one to acquire Activision, they would lock down exclusivity. Knowing Sony, this is not a farfetched conclusion in the slightest. However, the opposite happened here. Why?
In my opinion, Microsoft has all the leverage in the world here. The ActiBlizz deal flipped the industry on its head even besides the fact that Xbox has had significant momentum this generation beforehand. Not only is Call of Duty the biggest IP out there and biggest revenue generator for PlayStation, but we know that Microsoft is not done with their vision. Sony is signaling that, now, multiplatform games are the way to go. How will Microsoft be seen if they lock massive IPs to their ecosystem? A few years ago, would you have imagined Microsoft having the most leverage in the gaming world?
Edit: A day later, it seems that Jeff Grubb says something similar to a few of my points:
Edit #2: I want to add a caveat to my #4 point because now it seems likely that Bungie had a requirement to remain independent, autonomous and own the Destiny IP in light of being acquired. According to trusted insiders back in September 2020 (in response to the old rumor that Microsoft were in talks with Bungie last year), Bungie wanted to remain independent and around $2bn. When you count inflation and the premium markup that every company recieved after the Activision-Blizzard news plus the uncanny fact that Bungie remains independent and a multiplatform studio, this falls in line with these old rumors.
So, it might be more on Bungie’s wishes to remain multiplatform rather than Sony playing nice due to leverage. Still, Sony agreed, so that still means at least part of my original ideology is true. Old Sony would never agree to something like this especially for a marked up price, when they’re known for wanting to own every IP they put money into. Just wanted to share a contrarian point of view!
Ultimately, I think this is fantastic for Sony because, as Jim Ryan said , Bungie’s GaaS expertise are invaluable and Sony is currently working on multiple “live service games.” GaaS is something they have definetely been behind on for a while. I do think they overpaid quite a bit but technically there isn’t much options out there and they needed to take what they could get. Still, I’m happy for them!
There’s actually a lot more I want to write, but I’m on mobile and this is already reaching dangerous levels of TL;DR. I’m curious on everyone’s thoughts on the subject! Do you agree/disagree?
