Ok so this is a weird one. I have a friend who is a parent, a 40 year old, and absolutely a Microsoft apologist, if not outright 1996-style console wars fanboy. I don’t know why, I can’t diagnose it beyond man-baby-ism, but it’s spawned an interesting WhatsApp discussion recently.
It stems from a rather consistent trend that Sony is the bad guy in the Microsoft attempt to acquire Activision/Blizzard, which is so far off-track from the Microsoft perspective. For those not following, regulators are responding to complaints, notably from Sony, because the Call of Duty franchise is so important to the PlayStation ecosystem. Up-to the interesting economics behind the franchise, which shows more ongoing (DLC, in-game packs, etc.) revenue coming from the Sony platform than Microsoft’s. Sony doesn’t want to lose that cut of the pie, but also argues (alongside others) that such a whopper acquisition constitutes a monopoly.
And there is a point to be made. Prior to 2017, Microsoft’s studio portfolio was 6 studios, including Turn10 (responsible for Horizon racing games), 343 (responsible for Halo), Mojang, Rare & others. Skip to today, and their acquisition total, should the Activison Blizzard acquisition be approved, jumps to around 35 studios. This really reminds me, an aging tech native, of the 90s when Bill Gates was hauled in front of courts for monopolising the computer industry. It really feels like Phil Spencer, even if unconsciously, is doing the same thing. If I was Jim Ryan, I would also be spooked.
Sony isn’t afraid of an acquisition either, though. They currently have in their portfolio, 19 studios. Many of which are long-standing legacy studios, or rebranded internal studios from days past. But they are often acquisitions. The most recent (and big) being that of Bungie, the Marathon, Halo and Destiny creators. Some of those, like XDev are also studios that tend to be a technical liaise between internal and external resources rather than fully fledged studios. But that is also likely with the Microsoft Game Studios brand.
Anyway, that’s a lengthy primer to what follows in my console warring friend, who admittedly does not have a blog or social media presence to fight me on!
To make a point, he linked me to this article, citing it as good journalism from windowscentral. I did point out that this is likely not to be the most indepdent of views, likely not an insider and probably very Xbox-friendly. And lo-and-behold, I was right. Not that this is a beacon of journalistic integrity. But I do, at least, manage to boast almost 20 years of tech industry experience.
The first error here is citing a complaint from the UK regulators that there’s a concerning pattern from Microsoft acquisitions that stop publishing titles on non-Xbox consoles. The article jostles with this, noting that isn’t true of MineCraft or a slew of AAA titles from Bethesda. But it obfuscates that most titles released were already in development. We already know that StarField, the first truly under-the-Microsoft-roof title from Bethesda will be a console exclusive. Of course it will be, that’s just good business. But that’s also likely when there’s some not-currently-in-dev Call of Duty, StarCraft or even new IP from within the ActiBlizz halls. It’s not necessarily inevitable, but it makes little to no sense for Microsoft not to hold new titles as exclusives, hold onto the IP, tech and use it as a sales asset for the Xbox brand.
That swings both ways. Sony holds Horizon (Guerilla Games), Spider-man (Insomniac), Dreams (Media Molecule), The Last of Us (Naughty Dog) & more as exclusives to sell hardware. The notable difference here is that none of those titles were previously cross-platform. One caveat is that Sony’s current top games roster have been ported to PC, which largely benefits Microsoft’s Windows ecosystem, albeit indirectly via Steam. The one risk to the Microsoft business is Bungie, who own Destiny. Which, somehow (I don’t get it!), yields a massive fanbase who plunge money into it regularly.
Similarly Nintendo doesn’t put Mario, Splatoon, Animal Crossing, Xenoblade Chronicles and others on PlayStation or Xbox consoles.
The article also gently nudges that the regulators are fine with COD not being on Nintendo’s hardware, and Nintendo are doing just fine. But again, that obfuscates the point that no one buys Nintendo hardware for their third party support. You buy Nintendo hardware for Nintendo first-party software, back catalogue and more recently on Switch, indies tailor-made for handheld.
For years, Microsoft has behaved like a company that wanted to co-exist with PlayStation for the good of the industry at large. Microsoft continues to support Minecraft, Fallout 76, The Elder Scrolls Online, and other games that predate acquisitions. Meanwhile, Sony has garnered a reputation for carving out exclusive chunks of games like Destiny and Call of Duty to the detriment of Xbox and PC players.Jez Corden on behald of windowscentral
The above quote is another soft approach at being critical towards Sony, while making Microsoft seem like less of an aggressor. Remember, my point is that Microsoft is historically an aggressor, and not altruistic towards “the ecosystem”. The business might have moved on since the Gates and Balmer era, but the fundamentals are still there. They want to be a monopoly, and they have the resources to do so.
The titles listed in the quote are all, as noted, prior to acquisition. The next era of titles from those same developers are unlikely to get cross-platform support (even if the hardware effectively supports it as we run the gauntlet of a race to the bottom with less innovative consoles; but that’s another argument altogether). And similarly, the quote obfuscates the Sony exclusivity deals as pre-acquistion deals with Bungie and Activision. Some of those deals are almost a decade old!
An example from another industry would be AT&T being denied the acquisition to Time Warner to avoid a slew of monopolistic behaviours. AT&T fought hard, spent big money and won. But eventually had to spin Time Warner off a few years later. Very similar arguments were heard, a spotlight was put on the eventual victory, and in the end it didn’t work out for them. I feel like this is analoguous to the Microsoft deal. I don’t think it’ll wind up being as brilliant as folks think it will. If it’s that wonderful, fair and egalitarian, then the acquisition is effectively pointless. It’s not like ActiBlizz is a shining star on the stock market (source: I am a shareholder… I don’t know why I did that).
Ultimately this deal falls on whether Microsoft is willing to legally codify the acquisition’s fairness across the industry; make it a legal term that franchises won’t get locked into GamePass or Xbox’s ecosystem indefinitely. Take the indemnity on to own the egalitarian nature of what my fanboy friend claims they’re attempting. They allegedly offered a 5 year deal to Jim Ryan, who refused based on terms no one has seen. Which probably means the deal wasn’t as brilliant as you might imagine. Jim Ryan, like Phil Spencer, is no spring chicken here.
To wrap this up; in the specific instance of an acquisition, I think Microsoft wins huge. Sony loses. And Microsoft is in the business of winning through monopolies. Don’t get me wrong, I think Phil Spencer is a fantastic asset to the industry and a great Xbox lead. I also think Satya Nadella is one of the finest tech CEOs around right now & heartily recommend his book, Hit Refresh. But that doesn’t forego the penchent culturally for Microsoft to be a monopoly wherever it is.
Swinging back to my friend, the idea that you would defend Microsoft so wholeheartedly stinks of me as an 11 year old me defending Sega against an army of Nintendo fans on my street. Quoting articles written by bloggers pretending to use soft language to sound neutral is the same as me quoting articles from the Official Sega Dreamcast Magazine to neuter schoolyard squabbles.
The deal sucks, and being a console wars head as a geriatric millennial sucks.