It’s Not Financially Sound for Microsoft to Make Activision Games Exclusives; A Big Response to the Deal from Sony Would Slow Down the Effects


Following the groundbreaking announcement of Microsoft’s intent to purchase Activision Blizzard for nearly $70 billion, we reached out to Karol Severin, Senior Analyst and Product Manager at MIDiA Research (a market intelligence and consulting firm focused on entertainment and digital media), to get his perspective on this huge deal.

When we asked whether he expects Microsoft to make Activision Blizzard Games exclusives to its own platforms (PC, Xbox, and cloud), Severin replied by stating that wouldn’t make a lot of financial sense, while a softer approach might be in order.

Microsoft Has Dropped New Windows 11 Build 22538 with a Super Long List of Fixes

Given Xbox’s cross-platform and gamer-friendly narrative, the impact is less likely to be about ‘draconian exclusivities’ and more about ‘enhanced experiences’ on Microsoft-owned assets. The big hits, in particular, produce a significant (and often majority) revenue from the Sony side. It wouldn’t be financially sound to turn that revenue off, particularly because given Microsoft’s mega-portfolio (if the acquisition closes), it doesn’t need to. Engaging in hard exclusivity could risk alienating users on the other side, which still remain very valuable. Instead of exclusivity on whole titles, Microsoft can push more softly, e.g. through windowing access (e.g. first month of new CoD only on Xbox, not Sony), discounts, exclusive in-game content, experiences, etc.

This does seem to resonate with what we’ve heard so far from rumors and official sources, which is that at least some of the games won’t become exclusives.

Even so, this is certainly going to be a hit for Microsoft’s primary competitors in the current gaming space, Sony and Nintendo. How will they react? According to Severin, Sony would do well to respond in kind, even if that might prove exceedingly difficult to pull off.

A big response would be great for Sony – very important in slowing down the effects of Microsoft’s acquisition (IF it goes through, which Sony will be monitoring closely, I’d imagine). If it does go through, the sheer difference in company size will make it very difficult for Sony ($124 billion market cap) to come up with an acquisition answer comparable to what Microsoft ($2.3 trillion market cap) just announced. A similar dynamic applies to Nintendo at $54bn market cap. Having said that, more acquisitions are likely. M&A reportedly reached $85billion in 2021, three times that of 2020. 2022 almost beat that mark already (we’re at $81.4bn considering Zynga’s deal with Take-Two) and it’s not even the end of January!

Sony has indeed been trying to acquire more studios, but its acquisitions have been of a far smaller scale than Microsoft’s. While the latter has gobbled up the entirety of Bethesda’s parent company Zenimax for $8.1 billion, securing eight development studios and countless big IPs in the process, Sony’s biggest acquisition to date is Insomniac Games for around $230 million. More recently, Sony announced deals for smaller developers like Housemarque, Firesprite, Bluepoint Games, Nixxes Software, and Valkyrie Entertainment.



Read original article here

Denial of responsibility! TechnoCodex is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment