Xbox is monopolizing not releasing games!
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Schrödinger’s xbox
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The salt (more like confusion) is real!
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I’m seeing a lot of talk about how Sony has to / will respond with an acquisition. I’m also seeing a lot of talk that Microsoft “can’t” make anymore acquisitions or it will trigger anti-trust action.
Here are a few facts to keep in mind:
- The global video game market had about $176 billion in revenue in 2021.
- Playstation had about $25 billion in revenue for a market share of about 14.2%.
- Xbox had about $15.4 billion in revenue for a market share of about 8.75%.
- The Activision acquisition will close the gap substantially on market share, but still leave Xbox in third place behind Playstation and Tencent.
- The videogame industry is quite fragmented by any reasonable definition. It is not approaching a monopoly by any definition, and if it was then it would not be Microsoft’s monopoly.
- Xbox is currently a distant third in the console market, trailing Playstation by a 2:1 margin in the last generation.
- The barriers to entry in the video game industry are quite low, with new firms being founded all the time, and small firms growing rapidly due to hit games.
- There is a ton of investment money flowing into the sector, allowing more new firms to be founded than ever before.
Generally speaking, regulators will not try to forecast trends in the competitive landscape, they will focus on current data in the market. Microsoft’s attorney’s will be able to produce boatloads of documentation showing how fragmented the industry is. They will be able to produce long lists of games that do not appear on Xbox at all. They will be able to produce long lists of games that appear on Playstation or Switch or PC exclusively.
Is it possible that CoD ends up on Playstation going forward? Of course. There are a variety of reasons Microsoft might want that to happen. Are regulators going to force CoD on Playstation? Given the info above, I highly doubt it. in fact, it would be a stunning outcome.
Is it possible that Microsoft could run into anti-trust issues in the future? Of course. I doubt regulators would be very happy if Microsoft tried to buy Sony or Nintendo, for example.
However, holding to an apples-to-apples comparison, there is no anti-trust system anywhere that would continue to allow Tencent and Sony to make acquisitions while denying Microsoft that ability. For example, if a bidding war broke out over Take-Two, regulators would not allow Playstation to buy it, while simultaneously telling Microsoft, “No, you just got Activision.”
Why would regulators allow the #1 or #2 companies in a fragmented market to continue to acquire, while denying that ability to the #3 firm? Short answer - they wouldn’t.
If Microsoft stops acquiring it will more likely be due to concerns about PR and partner relationships, not regulators.
That’s what I think anyway.
BTW, the dollar amounts and market shares I provided above are not precise because they come from slightly different points in time due to differences in fiscal years, etc.
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More like Frankenstein monster: Playstation fans created a monster they cannot contain lol.
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If you just look at the deal at face value there is no resonable basis to deny the acquisition. As you say, Microsoft would nowhere near holding a monopolistic position, or even threaten one with the deal, plus the videogame industry is still far less consolidated than other forms of media and is still rapidly growing.
The only way the deal is denied is due to regulators being fearful of big-tech and really broadening the criteria they are looking at, although I think this would leave the decision on far more shaky legal ground. It would also signal that regulators might as well just break up the big tech companies because clearly they think they are already too big. Microsoft buying Activision is hardly the crossing of the Rubicon as to when you decide they are too big.
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I changed the OT name.
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We heard rumors of an Avalanche…… instead we got a Blizzard….
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Hammer meet nail, the rest of the “noise” online by the emotional gamers and “journalists” is just hilarious when you consider the actual facts here. And any additional acquisition moves by Tencent or Sony prior to this deal with Activision Blizzard closing only strengthens all of this of course.
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Zedox…
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Always a joy to read your take on things. Thanks for sharing.
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Xbox has been very quiet. Wonder when they’ll buy something. 
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Ha, love the title. It’s perfect.
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Anyone else hoping take two is outbid by Facebook for Zynga? Would help tank their share price😂
Satya would swoop in like a hawk.
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Thank GOD
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