Happy Sunday War & Peaceniks! Shall we play a game?
The gaming universe is the largest sector in the media economy. It’s also dominated by just four players: Nintendo, Sony, Tencent and Microsoft. Here are the biggest games on the planet. Note how many are controlled by 3 companies.
Granted, I’ve taken the liberty of including Activision games in Microsoft’s titles, as the the former is desperately awaiting being acquired by the latter as I type - a deal currently being scrutinized by regulators in the EU and US. (NOTE: I’ve also included Epic in Tencent’s titles, as the former is 40% owned by the latter, and they get super pissed when I say that).
So, as you can see, should Microsoft’s consumption of Activision be approved, their position in the gaming oligarchy strengthens. This potential threat to competition is one point that the European Commission is focussing on in their investigation of the deal. The other main issue centers around the idea that Microsoft might block access to Activision’s most popular games from consoles and devices not controlled by Microsoft. Interestingly, this point has been pushed most aggressively by Sony, maker of the historically successful PlayStation consoles.
For context, here are the top selling consoles of all time…
Note that 9 of the top 10 selling game consoles of all time come from just two companies: Sony and Nintendo. Sony’s latest console PlayStation 4 already comes in at #4; and Nintendo’s Switch (the best selling console of 2022) has already teaches #5 of all time. Meanwhile, Microsoft’s OG Xbox 360 comes in at #9, having never reached 100 million units; and you have go all the way down to #13 to find their current console, Xbox Series X.
So, it is conceivable that once Microsoft owns Activision, they could restrict access of Activision’s billion dollar franchise Call of Duty and their Blizzard title Overwatch to help bolster Xbox sales, forcing players to switch loyalties from PlayStation to Xbox. But, when you truly dig into the numbers, this thesis begins to fall apart.
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