The Next Decade Will Be Defined By Games, Not Consoles

Game acquisitions are nothing new, but we have never seen a company make a purchase on the scale of Microsoft buying Activision Blizzard for $68.7 billion. Nearly ten times the cost of the Bethesda purchase, this acquisition makes Microsoft the third largest game company by revenue, putting them just behind Sony and Tencent. This falls in line with the philosophy of Microsoft Gaming CEO Phil Spencer, who wants Microsoft to be at the forefront of gaming. This purchase won't finalize until 2023, but it gives Microsoft even more ammo to pack their console with exclusives. By releasing first-party games day and date on Xbox Game Pass, a service that recently hit 25 million subscribers, and leaning heavily into the "play anywhere" model with cloud gaming, this purchase makes one thing very clear: The debate over which console is more powerful is over, and it's this generation's games that will define the decade.

The Xbox Series S and Series X have been in high demand ever since launch, with Microsoft dealing with the same microchip shortage that has plagued companies around the world. With two decades of console development experience, Microsoft puts a lot into their hardware, but it's not part of their make-it-or-break-it strategy for long-term growth. They'll have no problem selling new Xbox consoles, but adopting more and more players into the Microsoft ecosystem is what their endgame ultimately is. That means manufacturing as many exclusives as they can for Game Pass, streamlining their cloud gaming offers, and removing as many roadblocks as possible for someone to enjoy a Microsoft first-party game. Exclusives don't help gamers, only companies, but there is something to be said about competition driving innovation. A free market is what capitalism was built on, but the purchase of Activision Blizzard makes the juggernaut of Microsoft even more of a foreboding force. The ripple effect of this deal is going to be felt for years to come. 

Hopefully, the Microsoft Activision Blizzard deal will bring some much-needed culture changes to Activision Blizzard, as the treatment their employees have received is indicative of an industry desperately in need of reform. 

What Does This Mean for the State of Console Exclusives?

Back in the summer of 2020, we looked at the race for new exclusives for Sony and Microsoft. After their game reveal events that year, it was clear the focus was less on hardware (despite Microsoft toting the Xbox Series X as "the most powerful console ever") and more so on first-party exclusives. The more "content" a system could gobble up, the more competitive it would be in this new age of gaming. Where Sony has been doubling down on making PlayStation 5 the only place for their exclusives, at least for a few years until they come to PC, Microsoft has been building out their Xbox/PC cross-play games. Microsoft is more interested in long-term sustainability and will sacrifice short gains now for customer loyalty that could last years.

With the Activision Blizzard deal, Microsoft obtains the rights to games that have traditionally been available across multiple platforms, like Call of Duty and Overwatch. So the big question many have been asking is will these games continue to be available on PlayStation, or will they become Xbox/PC exclusive? In a carefully worded tweet sent out on January 20, Spencer said that he had a good call with leaders at Sony and that he "confirmed our intent to honor all existing agreements upon acquisition of Activision Blizzard and our desire to keep Call of Duty on PlayStation. Sony is an important part of our industry, and we value our relationship."

The key term in this tweet is "existing agreements." This reflects what a Sony spokesperson said after the announcement, stating, "We expect that Microsoft will abide by contractual agreements and continue to ensure Activision games are multiplatform."

It's likely the next round of Activision Blizzard games will be available across platforms, but after that, it's a bit of a wild west. Even if we don't see a game like Call of Duty become an Xbox/PC exclusive, it will absolutely affect other IPs. It's also more likely that Call of Duty will no longer be an annual release, but something that gets routine updates over a number of gaming seasons. This fits better into the Microsoft ecosystem they've built than designing and shipping individual games in a franchise on a yearly basis. We could see a revival of other games like StarCraft, or potentially an IP like World of Warcraft added to Game Pass. Other games like Spyro and Crash Bandicoot, which originally found life as PlayStation franchises, will now live under the Microsoft umbrella as well. So the question is, what is Sony's next move in this colossal game of chess?

What Is Sony's Reaction to the Microsoft Activision Blizzard Acquisition?

After Microsoft acquired Activision Blizzard, Sony's stock market value reportedly dropped by $20 billion in a single day, according to a report from Bloomberg. However, this doesn't spell doom for Sony. The stock market always dips when news of acquisitions drops, but it recovers in due course. As mentioned above, Sony and Microsoft have both released statements that they intend to honor current agreements, but it's unclear what the state of play will look like in five or 10 years.

So what could Sony's next move be? They've already acquired several studios over the past couple years, including Spider-Man and Ratchet & Clank developer Insomniac Games, as well as Returnal developer Housemarque. In just under a month they'll be releasing Horizon Forbidden West, and expected later this year is the much-anticipated God of War Ragnarok, not to mention the 2018 God of War just dropped on PC earlier this month. As far as games go, there's a lot going on for the Sony side of things. Do they need to also acquire a large studio in order to remain competitive?

What major developers could Sony potentially strike a deal with? Geoff Keighley of The Game Awards asked this same question and tweeted out the market caps for some of the industry's largest players.

• EA: $38 billion
• Take Two: $18 billion
• Nexon: $15 billion
• Bandai Namco: $15 billion
• Embracer: $10.8 billion
• Netmarble: $7 billion
• Ubisoft: $7 billion
• Konami: $6 billion
• Square Enix: $5.6 billion
• Capcom: $4.9 billion
• Sega: $3.6 billion

If Sony were able to acquire Capcom, they'd have first-party access to Resident Evil, Devil May Cry, Ace Attorney, and maybe they'd finally greenlight a new Viewtiful Joe game. If Sony acquired Sega, they'd be able to add Sonic to the list of PlayStation mascots, and if Sony buys Square Enix they'll add a host of role-playing games to their libraries, including Kingdom Hearts, Final Fantasy, and Dragon Quest. Will Sony merge with any of these companies in the near future, though? Not likely, especially if they're able to dominate the conversation in 2022 with their upcoming exclusives like Horizon Forbidden West and God of War Ragnarok.

Sony also has another ace up its sleeve that we'll see in 2023: Marvel's Spider-Man 2, as well as an unknown release date for Wolverine. Though given the way things are going, especially with the huge success of Spider-Man No Way Home, it's not outside the realm of possibility that Disney may try to buy Sony to fully acquire the rights of Spider-Man and build on the empire of IPs that the company has already developed. This may not seem likely now, but if there's one trend I expect to continue into the 2020s, it's that this is the decade where anything is possible.

What Comes Next After Microsoft Acquires All These Game Studios?

In announcing the news of the Activision Blizzard purchase, Microsoft stated it is their goal to bring as many of their games to Xbox and Game Pass as they can. This will change the landscape of how players approach games like Call of Duty and Overwatch, as well as widening the player base when millions of gamers can play these games on day and date of launch on the subscription service. Game Pass used to be a niche subscription for gamers, but there's a reason it has frequently been touted as the best value in gaming. If Sony hopes to compete, they'll need to come out strong with something that shakes up the industry, and if the rumors of Project Spartacus are true, their next moves could do just that.

If rumors are to be believed, Spartacus is going to be Sony's answer to Game Pass, bringing together generations of PlayStation titles under one subscription service. Few believe that new first-party games will be available at no additional cost on this service, though, so only time will tell to see what kind of value it truly offers. Still, with a huge library of games that have been widely inaccessible in the digital landscape from PS1, PS2 and PS3, Sony's service could offer a lot for longtime PlayStation fans.

Where PlayStation Now currently offers mostly cloud gaming options that require a fast internet connection and has no way to bundle with a PS Plus subscription, Spartacus has the opportunity to bundle everything into one simple monthly price, and give players the option to download games directly to their console. Once this service has rolled out, any other acquisitions or deals they strike with developers moving forward can help shore up their subscription service, maintaining the focus to be less on the consoles themselves but on the content they provide.

This is what the future battle could look like between these two titans. I just hope the competition leads to greater innovation and benefits for gamers, regardless of which platform they choose to play on.

What are your thoughts on the Microsoft acquisition of Activision Blizzard? Are you excited to see what Activision games will come to Game Pass, or are you looking forward to see how Sony will respond to the Microsoft Activision Blizzard purchase? Let us know in the comments!

Microsoft Acquires Activision Blizzard FAQs

When did Activision acquire Blizzard?

In 2008, Blizzard Entertainment's then-owner Vivendi Games merged with Activision, officially forming Activision Blizzard.

How much was Activision Blizzard bought for?

The Microsoft Activision Blizzard deal was finalized for $68.7 billion.

What is the difference between Activision and Activision Blizzard?

Activision Publishing handles the development, production and distribution of games from its subsidiary studios. Blizzard Entertainment is responsible for the development, production and distribution of Blizzard games, such as Overwatch and Warcraft, among others.

Who is the owner of Activision?

Currently, Activision Blizzard CEO Bobby Kotick remains in control, but it is unclear what staffing changes may occur when the Microsoft deal becomes official in 2023.