After a long process of hearings, the US$68.7 billion deal for Microsoft to acquire game development company Activision Blizzard recently progressed after a US court ruled against the Federal Trade Commission’s (FTC) injunction.
With this news came concerns among console gamers about a potential monopoly that could control which device people can play their popular titles. To smooth over opposition to the deal, particularly from the PlayStation camp, Microsoft inked a 10-year deal with Sony to ensure Call of Duty continues releasing on PlayStation platforms.
For those unfamiliar with Activision Blizzard, you will have likely played, or at least heard of their popular franchises. Call of Duty stands out alongside the likes of Diablo, World of Warcraft, and Candy Crush, after the company acquired mobile game company, King.
Record $1 billion quarter
Despite the tough current economic environment, Activision Blizzard’s recent quarterly report revealed that it’s making significant money. For the first time ever, the Blizzard arm of the company recorded US$1 billion of net bookings in just a quarter, off the back of Diablo IV‘s hugely successful launch. Additionally, Activision Blizzard’s net revenue grew 50% year-on-year to US$2.2 billion, firmly placing it among the top earners in the games industry
It’s staggering figures like this that have anti-competitive watchdogs like the FTC and PlayStation fans worried. If one or a small number of companies control the majority of the biggest games, it stokes fears over a potential monopoly on the market, reducing the number of options consumers have.
It’s not uncommon for companies to publish games exclusively on select platforms, although the concerns surround the potential exclusivity of franchises previously available on multiple platforms. For example, Starfield, the upcoming sci-fi RPG from the Microsoft-owned Bethesda, will be an Xbox exclusive. Prior to Microsoft’s acquisition of Zenimax, Bethesda’s parent company, its games like The Elder Scrolls V: Skyrim and Dishonored released on both Xbox and PlayStation consoles.
Call of Duty 20-year milestone
This October, Call of Duty reaches a big milestone, celebrating its 20-year anniversary, and currently has around 90 million active monthly players. You can imagine why, prior to the Microsoft-Sony agreement being inked, series fans were worried about platform exclusivity. With the agreement in place, however, Call of Duty will remain a multi-platform game for the foreseeable future, even after the Microsoft and Activision Blizzard deal goes through. Whether Microsoft is just kicking the can further down the road until it eventually does claim exclusivity remains to be seen.
We’ve seen this in the film and TV industry too, with major companies like Disney acquiring brands and intellectual property like collector cards. In the video game industry, acquisitions are only growing in scale. It shouldn’t come as a surprise that Sony too has joined the acquisition trail purchasing Bungie, the developer of Destiny 2, for US$3.6 billion in 2022.
Microsoft + Activision deal: It’s all about mobile
Prior to the proposed Microsoft buyout of Activision Blizzard, we’ve seen Chinese mobile giant Tencent purchase a majority share of Supercell for US$8.6 billion in 2016, and Take-Two Interactive acquire Zynga for US$12.7 billion, showing there’s huge money in mobile gaming.
In Australia alone, spending on mobile games accounted for $1.56 billion, more than any other platform. It’s no wonder why companies are investing heavily in mobile divisions and buying established players in the market. Manufacturers also understand the appeal, with devices like the ROG Phone 7 aimed at providing the best mobile gaming experience possible.
It’s also why you don’t have to look far to understand why Microsoft has pushed so hard for the Activision Blizzard deal to succeed. Mobile versions of popular franchises like Diablo Immortal and Call of Duty Mobile account for significant revenue. In fact, according to Activision Blizzard’s quarterly report, “over half of all (Call of Duty) engagement” is on mobile, and the platform accounts for 40% of the company’s net bookings.
As for what the future holds, that’s anyone’s guess. For now, it’s important that companies are held accountable by consumers and watchdogs alike to ensure everyone gets a fair go.
