Tendo City

So, last year Microsoft announced it was going to buy Activision-Blizzard-King for $65 billion.  This set off a long process of getting the merger approved by regulators all over the world.  Most ended up approving it, but two, the UK's CMA and the US's FTC, tried to stop it.  The legal process in the US is for a court case to decide the result, and today the judge came back with her ruling: the FTC's request for an injunction to stop the merger is denied.  The FTC's case was pretty poorly presented at the trial, which was mostly livestreamed and had some interesting stuff come up because of it, so this result is not surprising at all.  The FTC focused its case on Call of Duty and how much Microsoft could get from getting ahold of that series, but Microsoft insisted that CoD would stay multiplatform for at least a decade, which I believe; they'll probably treat CoD like Minecraft.  Other Activision and Blizzard stuff will probably go PC/Xbox-only, but not CoD for a long time.

(Meanwhile, MS also said that King's mobile games were actually probably the number one reason why they want to buy the company.)

Meanwhile, as for the UK regulator, the CMA, it seems that they are going back into negotiations with Microsoft, so maybe now that they know they're the only regulator trying to stop the deal and that their case was incredibly bad -- basically the CMA focused their rejection entirely on how it'd give Microsoft too much power in cloud gaming, even though there is no proof that cloud gaming is going anywhere -- maybe they'll back down now.  I hope so, that's an absurd reason to block the deal over.


What do I think about the merger, though?  As I have said before, Activision and Blizzard have a very poor track record of how they have treated their employees over the past two decades or so.  Microsoft is certainly also flawed in that respect, but they're no Activision, so it should be good for Activision's workers if the merger goes through.  Additionally this should get Bobby "I love Republicans and don't care about harassment at my workplace" Kotick out of the industry, which would be great.  Kotick, who remember is the longest-termed CEO in the tech industry, did some good things back in the '90s when he saved Activision and led them to make a series of fantastic games, most notably MechWarrior II among others, but for several decades now every story about him has been bad.  It's either about his support for Republican causes, giving jobs to awful people, not doing much about the bad work environment at his company for women and such, how he makes insanely huge salaries (like what was it $150 million a year?), etc, etc... if this gets him out, even with a golden parachute, I'm in favor.

On the other hand, having the very first third party videogame developer, and a company that is one of the largest third parties, get bought up by a first party really says a lot about how this industry is going.  AAA development has gotten absurdly expensive, beyond the means of all but the largest companies.  And so mergers continue as studios get larger and larger and fewer and fewer companies buy up as many of the major studios as they can.  This is a bad trend, and Microsoft and Sony are both guilty of encouraging it, but considering how expensive development is now I understand why it's happening, unfortunately.  There's probably not much that can be done so long as development costs stay high, and I can't see them going down unless there's a crash or something!

The result of mergers like this will be even longer dev times and even more expensive development for the increasingly small number of titles in the AAA(AA) space.  But what can you do?  People want the best graphics, the largest worlds, and such, and that costs a lot in money and time.  I hope that it also results in more smaller games as well though, which it could -- ActiVision has basically done nothing with any of its back catalog in recent years, they only make CoD.  I hope MS uses some of their many good older IPs for either new games or classic collections.  An Atari 50-like collection of Activision classics would be a fantastic start, for instance...

ABF, you're repeating common and flawed talking points of MS fanboys in defense of this.  Consolidation of giant corporations is bad for literally everyone, including ultimately MS themselves.  This is not a good thing.  You are lying to yourself if you think that MS is going to "fix" A-B's corporate culture.  This only further monopolizes the gaming industry, and there is no way this ends well.

The talking points against the merger often are just Sony fan talking points, though.  You do know that, right?  Even the FTC basically came across as repeating Sony talking points over and over, because they didn't have much of a case otherwise.

Also, given how strongly anticompetitive Sony also is with their constant moneyhatting of third parties, they had less than no leg to stand on to push back against this merger with.  "What MS is doing is awful! ... but what we're doing, which is basically the same but for a lower dollar total because we aren't as rich as Microsoft, is totally fine..." and the FTC said "yeah, we agree"? What?


Consolidation certainly can lead to bad outcomes, as stagnation takes hold and too few huge companies control a market in a way that stifles competition and innovation and hurts consumers, but this merger doesn't get gaming to that point.  Could gaming get there with the consolidation that is ongoing, yes in the AAA space, but this does not get there.  I don't think that you can stop a merger because future mergers might result in something which does not exist now and won't after this merger...

Still, yes, it is unfortunate that Microsoft is buying up so many top developers.  However, the reason isn't just about Microsoft wanting to beat Sony (and Microsoft), it's also about how ludicrously expensive game development is now. Seriously, I think the best takeaway from this whole thing is that game development cost ludicrous amounts of money and time now and that is unlikely to change.  Blocking mergers won't fix how insanely expensive and time consuming AAA game development is now, or how even one failed project can doom a studio.  AAA(A) games take many years to complete and huge sums of money to develop.  You need to be a large company to afford that.  It's not the '90s anymore when a midsized company can be a major player in the big budget for the time game space.  I don't see a solution to this, unfortunately, that doesn't result in consolidation... it's not a great trend but it's where the constant progress of improving tech has brought us thanks to how long it takes to make a major title now.

But, again, looking at this merger in a vacuum, I'm kind of sad for the industry that even large publishers can't make it anymore and are merging into first parties, but look at Activision now, their entire massive third of ABK is entirely focused on Call of Duty.  I do not like Call of Duty, at all.  Maybe Microsoft will have the resources to make things OTHER than CoD out of the many good IPs in Activision's back catalog, that would be great!  There's so much more than just CoD they could do...  there is both good and bad that could come from this.  The good is potentially significant too.