The YouTube channel Upper Echelon Gamers posted a video reporting on a wave of mergers and acquisitions in the video game industry. Major game publishers and console makers have bought other major publishers in high-priced deals. The wave started in September 2020, when Microsoft bought Bethesda and its parent company ZeniMax. The acquisition wave become more noticeable in recent weeks when Microsoft bought Activision-Blizzard, and Sony bought Bungie.
The channel’s host lists the big purchases of the last year and a half. It starts with the above-mentioned purchase of Bethesda by Microsoft. Bethesda develops popular franchises including Doom, Elder Scrolls, and Fallout. In January of 2022, TakeTwo, the publisher of Grand Theft Auto and Red Dead Redemption, acquired Zynga, which develops many mobile game titles.
After plugging for the video’s sponsor, the video continues with Electronic Arts buying Glu Mobile, another mobile game developer in April 2021. Next comes Microsoft buying Activision-Blizzard, in the most expensive deal in gaming history.
Many game channels and news sites have covered Activision-Blizzard’s controversies over the last 3 or 4 years. These include banning a champion player from their tournaments for supporting Hong Kong protests; greedy monetization schemes that use games of chance similar to gambling; abandoning their PC gaming fans in favor of mobile players; and most recently, investigations of sexual harassment and abusive work culture in its offices. These troubles brought the company’s stock price down, and Microsoft swooped in to take charge.
Sony, Microsoft’s console competitor, saw its own stock price drop at this news. Then it bought Bungie, most famous as the original developers of Halo, which was an X-Box exclusive property. The video then mentions a purchase by the Saudi Arabian government, through the state-owned company Savvy Gaming Group, of the ESL. The ESL is a prominent league in esports.
That’s the end of the list, and the channel host moves on to analyze these developments. This is likely just the beginning of the acquisitions of big AAA game companies. They will be subject to U.S. antitrust laws; indeed, the Federal Trade Commission is investigating the Microsoft/Activision-Blizzard deal (“Microsoft’s Activision Blizzard takeover will be reviewed by the FTC”). As an analogy, when Disney bought 20th Century Fox, the government required Disney to divest certain Fox IPs and divisions. Microsoft might need to forego particular Activision-Blizzard properties and sell them to someone else.
In the last console generation, the Sony Playstation 4 enjoyed numerous exclusive titles by 3rd parties. 3rd parties simply favored the PS4 as a platform. Microsoft responded by buying up small, yet creative development studios, and that’s probably the spark that lit the acquisition wars.
The console makers Microsoft and Sony still have enough capital to absorb major 3rd party publishers. Activision-Blizzard was one of the biggest, which means any AAA company is a possibility. During the pandemic lockdowns, we’ve seen several big corporations grow excessively, while smaller businesses struggled. Gaming acquisitions are part of a bigger story of corporate/Wall Street bloat.
Nintendo isn’t mentioned in the video, but it’s worth noting that the Switch has been a haven for quality indie games. Indies need our support more than ever.
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