What if Microsoft Gaming looked like this:
- Xbox
- Bethesda
- Activision
- Blizzard
- Electronic Arts
- SEGA
It would make sense. EA and SEGA are Xbox’s biggest partners. This is probably the best possible version of Microsoft Gaming.
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It would never get through European regulators.
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Why stop there?
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I think Microsoft will try to acquire another industry giant in the next 5 years. EA is the perfect candidate for Microsoft. It’s easy money and fast growth for Microsoft Gaming. There’s no guarantee that regulators will approve the acquisition, but this is probably the best time for it to happen. I don’t think Microsoft will miss this opportunity. EA makes a lot of sense for Microsoft’s new strategy.
I respectfully disagree. Microsoft is the sum of it’s parts and gaming is the worst of those parts in terms of revenue/profit - by a very large margin. They just spent an unbelievable sum that’s ROI is years, maybe decades, out - if ever. You can look at MS purchases over the years and ATVI might go down as their worst yet - or not. To go out and spend 20, 30, 40B on a company that will no doubt bring the furor of regulation down upon them (Soccer game) is not a sound strategy when you can round out your AI division, cloud or put more R/D into quantum or whatever.
And really, for what? To own everything? Are we really rooting for MS to own everything? Does it benefit us? What do we win? A: we win nothing. The ATVI purchase certainly didn’t net us, the consumer, anything. We got Call of Duty and Diablo on gamepass while the rest of the catalog is in the ether somewhere - all the while two price increases and a complete loss of exclusivity - diminishing the end product in the eyes of most gamers everywhere. Yay?
If I were Phil or Nadella - I’d manage the large portfolio of developers I currently own. I’d make them profitable I would integrate it into my more important divisions. I’d make this thing work before I hunted for more heads to put on my wall.
That is what I would do. What they will do is anyone’s guess. They could very well try to buy EA.
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Gaming is a significant part of Microsoft. Microsoft is the world’s highest-grossing publisher in 2024, according to an Ampere study.
They didn’t spend anything. They transferred monetary value into an asset of the same value. They don’t need to get that money back since it’s still present in the company in another form. ABK is already profitable and accounts for the majority of Microsoft Gaming’s revenue.
To make money, it’s a business you know.
I’m pretty sure Microsoft isn’t going to ask our opinion or do things to please us. They do things to increase the company’s value and satisfy shareholders.
By 2024, over 60% of Microsoft’s revenue came from PS gamers. Microsoft Gaming is making more money than ever. Multi-platform was inevitable. The hardware decline didn’t start with Activision and nothing could have fixed it. The people most upset are the console warriors. The upcoming games are amazing, GP is still the best deal on the market, and the move to PC makes sense and is the best move they’ve made since Xbox OG.
That’s what they’re doing. Have you seen the games coming in 2025/2026? Xbox has never done so well. The June showcase is going to be incredible. EA isn’t Ubisoft or even Activision. There’s no major work to be done after the acquisition. It’s easy money without the risk.
Of course. The car I bought for $40K didn’t cost me anything. It is simply an asset sitting in my driveway. This house didn’t cost me 1.2 I simply transferred monetary value into an asset of the same value. Nothing costs money except food, cigarettes and gasoline. Foolish me.
Microsoft didn’t ask - this is a forum for opinions on a video game site about Microsoft. Not a Microsoft corporate board question and answer session. Microsoft has a rap sheet a mile long on failed acquisitions - that is the debate here.
I agree GP can be a good deal. Also the move to PC seems like the way to go. However, I’d say goodwill and general sentiment are at it’s lowest point since the first couple of years after the XOne release. Just in general - not on specific fan sites who have spent the past year rationalizing MS’s decisions.
I have and it looks good so far. Since last Autumn they have certainly had a nice cadence - it is the only reason anyone is still here. If they had the cadence of January - September of '24 I think the platform would be largely done. I hope June is incredible. EA has a tremendous amount of risk. EA has had flop after flop in the single player market (see: Bioware Veilguard team being broken up almost immediately post-release). Flop after flop in multiplayer since Apex’s release (think Wild Hearts and Anthem [anthem was pre-Apex if memory serves]) and even Soccer has shown weakness (down yoy). Makes money - a good deal of it. Certainly not risk free especially with european regulators wanting nothing more than to put a huge US company down.
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…i thought my finacial lieteracy was bad. I dont know where to begin with the nonesense in here, its like fanfic.
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Oh yeah I forgot embracer was planning to split the company up into 3 divisions. In all honesty Middle Earth Interpraises and friends could be a good buy depending on price but I do think it comes down to thet price tag as if it is 3-4 billion they cost a comparable amount to someone like SEGA. I think it is probably a paradox level acquisition. Coffe Stain & friends could also be a decent buy as Matt Booty did mention they wanted smaller games to pad line ups which coffee stain and friends will focus around
Personally i think the bigger question is will Microsoft keep buying. While i am leading on yes as they were in talks with Ubislop (likely to be in place of tencent as their partner). After activison and becoming 3rd party i think it is a more than fair question at this point as plans/strategies have definitley changed, WB games might give us our answer but unlike Ubisoft I don’t think WB games is on the same level of an acquisition so if they ignore it, it probably doesn’t mean much IMO as outside of mortal kombat they lack valuable IP, assuming WB doesn’t sell the game rights to stuff like DC which I doubt they will. I do think if they do keep buyiny though EA and SEGA are both logical aquestions and are both Microsoft longest lasting and most consistent partners but it is uncertain if that will matter in even 5 years as Microsofts commitment to their consoles will likely be near non existent.
I disagree. People seem to be forgettinng but the EU were by far the most reasonable regulators. I think the biggest risk is probably still the CMA as even with their recent restructuring we haven’t seen the significant changes that will have to the regulators as a whole
IF microsoft isnt done buying, I don’t think they will stop there. I think they either have long term commitment still or they don’t (this being said even if they have long term commitment I am not sure if they are still all in). I still feel like a lot of people are sleeping on square
By which metric? If we are talking historically and culturally I 100% agree as EAs big games are primarily live service, they have been probably biggest partner though out the platforms history and were one of their eariest supporters…but if you mean strategy wise I disagree assuming EA doesn’t buy a major mobile publisher like playrix soon, I think mobile will probably be Microsofts biggest concern moving forward and considering take two bought Zynga, I think T2 outclasses EA there
I think the question isn’t just do they want to grow gaming though, i think it is also a question of are they scared of other big tech e.g. amazon moving in on gaming, do they still think gaming will be very important to cloud, do they want to grow their stake in mobile game to launch an app store and potentially the importance of gaming related to the metaverse
100% agreed. I am very burnt from thr ABK purchase. I can forgive the rest including going 3rd party but they promised old ABK stuff would land on GP. They lied simple as
Also because spending money is better than letting it sit in the bank as it helps them avoid corporate tax. The better question is would they buying a gaming company still over an AI or cloud company
To be fair, the only thing that matters to EAs finantions are their mobile games, their sports games, battlefield, APEX and if I am being generious their other licensed games. Stuff like dragon age and dead space are more so side projects. Their bigger stuff has remained pretty consistent in terms of success but their football games could start falling off after losing the fifa license. It is a wait and see kind of thing.
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I think Watchdogs has a better hook to set it apart from GTA than True Crime tbh. Also could be just as if not more topical story wise, considering the current state of the USA. Always felt it had a lot of untapped potential as an IP .
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Nah - they want the big payday same as activision - you need a diversified portfolio for that. Kotick hit the lottery - I doubt anyone in gaming will ever see that ridiculous number again.
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I mean presently no primarily gaming companies are as big as Activision outside of Nintendo which probably won’t happen any time soon if ever. Even if we apply an equal premium of 45% (which is pretty generious as Microsoft was already getting ABK at a discount due their stock drop while EA or T2 won’t have that justification) EA would cost about 54 billion. About 15 billion less than ABK meanwhile with a more realistic premium which is normally 20-30% (so lets average at 25%) your looking at about 46.8 billion. Dont get me wrong these aren’t cheap amounts but they are compable to activison. The only one that really is once again is Nintendo which if an opportunity did come up to buy them which i doubt will happen I think Microsoft would jump on it simple because it is a once in a life time opportunity (same with valve). Just for case of intrest with the same premium as ABK nintendo would cost about 122 billion and with the standard premium of 25% they would cost 105.5 billion so a lot bigger than Activision
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Well, you own a house worth $1.20 that you can sell for $1.20 (more or less depending on the market). Phil Spencer and Microsoft’s CFO did a great job explaining how acquisitions work during the FTC lawsuit.
EA has maintained stable value and profits for years. This year, Split Fiction (Solo) will be a GOTY contender. Last year, College Football (GAAS) was an incredible success. There are some adjustments to be made, but the foundation is very solid.
I think Middle-Earth & Friends will be valued between 1 and 2 billion. They mostly make AA or AA+ games. They can produce some interesting games for GP but they are not really big sellers. Microsoft will likely target profit.
They stated that they were still looking for acquisitions.
EA is one of the biggest publishers. It makes a lot of money. It owns many successful GAAS games. It performs well on PC, console, and mobile. It has a huge player community. It is one of Microsoft’s biggest partners and generally shares the same vision for the industry. EA was in discussions with Disney, which suggests it might be open to being sold. Acquiring EA would be a good strategy to offset declining hardware sales and continue the move to multiplatform.
Take Two would also be a great acquisition, but I think EA is more aligned with Microsoft’s strategy. Take Two is overvalued because of the release of GTA6 and I don’t think they’ll want to sell for a few years.
Exactly. Investing in AI has never stopped them from making acquisitions in video games. I think they will continue to invest in every part of the company. Wasn’t Microsoft recently in talks to acquire TikTok?
Yeah I agree. No matter what Microsoft said the FTC would of continue to try block back them. It issue was never the acquisition was anti competitive, the issue was Lina Khan was running the FTC who hates big business. Put simply, she was beyond bias.
I don’t know if i would call them stable. Their biggest issue is them losing the fifa license which its too early to definitively say if that hurts EA football or not. It it doesn’t then I agree.
For a billion they would definitely be a good pick up, it would value them on a similar level to Paradox which a comparably good buy. Middle earth would offer more diverity though as an acquisition while paradox would be more focused on the PC stratagy game front.
I agree there, but in terms of value they are more or less equal with take two. Their has been moments where EA has been more valuable and moments where take two has surpassed them. I think the biggest factor of that is definitely take twos acquisition of Zynga giving them a huge stake in mobile. I do think EA is more likely to be looking for a buyer but that isn’t necessarily a pro as it could just mean if Microsoft hesitates or doesn’t want to spend another massive chunk of change for a while someone else like disney, comcast or amazon could just snag them. Its a double edge sword.
I don’t think GTA 6 is overvaluing them personally, i think their merger witn Zynga a few years ago is much bigger thing for shareholders. Take two did comment on the idea of being acquired actually and what they said was while they aren’t actively looking they have an obligation to shareholders and if a good offer passes them they would have to engage. The fact they may not actively want to sell though could make them demand a larger premium than EA making them the more expensive buy
Yeah back in 2020 and their are rumours they might be again but their is nothing concret but the rumour is they will buy 50% turning it into a joint venture between an amaerica company (in this case Microsoft) and byte Dance. But the biggest question is would they spend about 45 billion on EA over buying like 50 AI start ups which could give microsoft a huge lead in that field…and in all honesty I’m not sure
EA has always been one of the most profitable publishers in the world. I don’t think it’s ever been in trouble. Losing the FIFA license hasn’t really hurt EA. EA Sports FC sells very well and is one of the best-selling games, especially in Europe. Additionally, EA Sports games would be perfect for the GP.
Take Two’s value is boosted by the release of GTA6. Take Two has fewer profitable GAAS than EA. It’s true that Take Two owns Zynga, but EA also owns many mobile studios. I understand Microsoft already wanted to acquire EA in 1999 and 2018, so it wouldn’t surprise me if Microsoft tried to acquire it after ABK. I think EA has a lot of potential to develop with its studios and IP. There would be some really fun things to do if Microsoft bought it.
Trump hasn’t confirmed that Microsoft is in talks with TikTok in early 2025?
Wouldn’t they run into trouble with regulators if they invested so much in AI? But I don’t think they’ll choose one or the other. Microsoft was already investing in AI when it bought ABK for $70 billion.
It hasn’t hurt them too much yet though the recent EA football did underperform. The thing I’m worried about is 2K got the license which could potentally steal away a large chunk of EA’s market share. It feels like one of those to early to tell things
While T2 does have fewer massive GaaS games they are definitely not slouches with their acquisition of Zynga, 2K, the rockstar online titles and most recently boardlands they are pretty strong there. I know EA owns mobile stuff too (most notably glu mobile) but I think Zynga is bigger than EA’s mobile presence alone, this isn’t even factoring in the fact T2 owns other mobile studios too namely dotts and social point.
Can I have a source for Microsoft trying to buy them in 2018. I didn’t know of that, but i agree. I would prefer microsoft buy EA over T2 in all honesty but I’m just thinking of what makes sense and I think both are very logical pick ups if Microsoft is still all in but also if it comes down to getting 1 or the other I think Zynga gives take two the edge.
I think he was just listing a possibility of what could happen
Yeah but what I’m saying is, would that $70 billion of been spent better somewhere else. Its too early to tell but its likely something a lot of major Microsoft shareholders are asking
FC25 was the best-selling game of 2024 in Europe and broke an all-time record in the UK. I read the press release and I believe the underperformance of FC25 is related to the general market decline in 2024 and not to the FIFA license. FC still has a huge player base.
It’s hard to predict how successful 2K Sports will be with the FIFA license. 2K has never developed a soccer game and has been heavily criticized for microtransactions. Top Spin 2K25 was very disappointing. I think the FIFA 2K game won’t be released for several years and it will have to be of high quality if 2K wants to compete with EA.
Zynga is undoubtedly bigger than EA Mobile, but EA Mobile would be an interesting addition to King. It all depends on what Microsoft is looking for with the acquisition.
This was reported by Polygon in 2018. A source at Microsoft told them that Microsoft was interested in acquiring EA, Valve, and Bluehole. Nothing official, obviously, but it seems credible to me and consistent with the information we received during the FTC lawsuit. According to a rumor, Microsoft was in discussions with another publisher when ABK happened. At the time, Take Two was thought, but it could be anyone or no one. But it’s clear that Microsoft wanted to develop Xbox and has considered many studios and publishers since 2018.
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I know that. I’m just pointing out their is an iherent risk of EA Fallball losing a lot of its market base. Obviously its to early to know for sure hence why I said its a wait and see kind of thing.
I mean, fair with 2K not having much experience when it comes to football games but both EA and 2K milk micro transations like no tommorow…but i guess we also don’t know how long it will take for the 1st 2K fifa to launch so their is a chance for the new branding to catch on.
True which is why we can only speculation but i personally feel like if Microsoft wants to grow in 1 area its mobile since they have talked about wanting to make their own mobile app store and if they can do that they probably want massive stuff pushing it to the defualt store front like King or Zynga or even TikTok.
I mean, its all speculation, but I think those rumours were relating to the EA Play deal which happened around the same time.
I don’t think they were to be honest. A lot got leaked from the FTC trial including almost all the companies they were looking at. Microsoft potentially talking to someone like EA at the same time probably would of leaked too since it would of been more important to the trail as the FTC could of argued that as proof of Microosft trying to form a monopoly
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