Reflex analysis of Microsoft’s US$69bn acquisition of Activision Blizzard is that its all about content and the so-called console war.
Picking up leading AAA game franchises like Activision’s Call of Duty and World of Warcraft could significantly be seen as a move to position Xbox to come out on top in its rivalry with Sony.
Sony’s Playstation has for many years had the upper hand over Xbox, driven by a strong catalogue of games developed or funded by Sony and available exclusively on Playstation.
Top game franchises like Spiderman, Unchartered, The Last of Us, Gran Turismo and God of War are simply not available to Xbox owners.
At Xbox, the strategy in recent years was to compete on value through its Gamepass pay-monthly subscription service which allows gamers to access a broad number of games for ‘free’ as long as they retain the Microsoft subscription.
Put simply, it’s a lot like Netflix but for games.
Early iterations of the Gamepass catalogue mostly comprised older, smaller or less popular game titles.
But, as its gained commercial traction the subscription service has become a strategic focal point for Xbox which has invested heavily to secure access to more significant games for subscribers.
It struck deals with third-party publishers and last year stepped up investment further with the acquisition of Bethesda Games (bought in early 2021 US$7.5bn) it has much more control over the game titles it can make available for Gamepass.
Owning game developers like Activision and Bethesda allows Microsoft to create in-demand games as exclusives to Xbox or alternatively preferentially market games that are released on both platforms.
‘Day One’ Gamepass releases like 2021’s ‘Back 4 Blood’ are, for example, made immediately available to Xbox subscribers ‘for free’ on the day that they are released, whilst on Playstation the same game would have to be purchased outright.
Upcoming new games from Bethesda will reportedly follow this model.
Details of how Xbox might leverage Activision’s AAA games catalogue, especially industry leader Call of Duty, have yet to emerge, but, it is hard to imagine that after spending US$69bn Microsoft won’t want all the bang for those bucks.
Sony has its own subscription services but are widely deemed as sub-standard in comparison to the Xbox offering.
In the days prior to the big Activision move, industry leaks suggested Sony is working on a new subscription service to rival Gamepass.
In the wake of the Activision news Playstation owners will likely watch keenly for a reaction from the Japanese company.