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The Microsoft Offensive

So it is clear that Microsoft will buy Activision Blizzard less than a year after the Bethesda deal was completed. What will be the consequences for the gaming industry?

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It was in September last year that we reported on the rumour that something really big was in the works. Several analysts and insiders gossiped that there was a gigantic takeover happening, without wanting to be more specific. Since there were already rumours of takeovers about Sega and Take-Two, among others, these two were close at hand, with Microsoft being the most conceivable as buyer since they have the cash required for these deals, something we have seen in the past with Bethesda/ZeniMax.

But memory is short and relatively few people remembered this when the bomb broke this afternoon; Microsoft intends to buy out Activision Blizzard. The Bethesda buyout may have been big, but this is eight times bigger in pure financial terms. Where Bethesda has a game that has sold over 30 million, Activision releases a game on that scale every year with its Call of Duty series.

The Microsoft Offensive
Microsoft updated this image by adding Bethesda characters after the acquisition. Soon it will also need to be equipped with Crash Bandicoot, Warcraft orcs and Captain John Price.

Then there are series like Crash Bandicoot, Guitar Hero, Spyro, Sekiro, Tony Hawk and a whole lot more. These games are in turn developed by studios like Beenox, Demonware, Digital Legends, High Moon Studios, Infinity Ward, Major League Gaming, Radical Entertainment, Raven Software, Sledgehammer Games, Toys for Bob and Treyarch, among others, which now strengthens Microsoft's development capabilities.

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And that's not even mentioning the one that most of you are probably most interested in, Blizzard. The former giant hasn't been itself for a long time, and suffers from problems with both a toxic working environment and announcements that nobody asked for and then fails to deliver on promised quality. But regardless of this, they are sitting on a treasure trove of beloved franchises such as Diablo, Overwatch, Starcraft and Warcraft.

The Microsoft Offensive
The acquisition of Activision Blizzard is by far the largest in gaming history and is paid for in cash by Microsoft.

Spontaneously, this feels like perhaps the single most promising part of this giant buyout, as it means that Blizzard will now hopefully be free of direct control from Activision, which in turn is under Microsoft instead. It should give Blizzard the peace and quiet it needs to make its distinctive and much-loved titles, rather than trying to churn out an annual mega-hit on the same premise as Call of Duty, something journalist Jason Schreier also agrees with.

Before I go any further with what this means, I feel like we need to mention King as well. This once Swedish smartphone game maker was the subject of the world's largest buyout when Activision Blizzard bought them in 2015 for $5.9 billion. They're best known for the Candy Crush suite, but have other blockbusters that constantly bring in an outrageous amount of money.

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The Microsoft Offensive
There is very little talk about King in connection with the acquisition, but this is a giant money machine that now has access to Microsoft's strong brands (and vice versa).

Just like when Bethesda was bought out, discussions around exclusives seem to dominate social media. Unlike the Bethesda buyout, when many believed (or perhaps rather wished) that their big games would continue to be released primarily for PlayStation as usual, more people now seem to be accepting to the idea that Microsoft's games are exclusive to the formats Microsoft is betting on, but there are still some hoping that games will continue to be released for PlayStation even in the future.

In the end, it's as simple as Activision Blizzard costing $68.7 billion. For this money, you could get eight Bethesda's and a Mojang as a cherry on top. As with Bethesda, there is no logic in buying up the company for these sums if you want things to continue as before. After all, the Call of Duty games already come to Xbox. Had they wanted them for Game Pass, they could have just paid for this every year and got all the upcoming games in the series for a fraction of the cost. Nor is it old classics or titles like Crash Bandicoot and Guitar Hero that make Microsoft want to splurge these ridiculous amounts of cash, it's rather the opportunity to create its own attractive ecosystem.

The Microsoft Offensive
For many, Blizzard is probably the biggest acquisition. Hopefully, they can now return more to the corporate culture they had before the merger with Activision.

As with any acquisition of this size, however, it will take time before it really starts to be felt in a major way (that is, beyond the addition of old games to Xbox Game Pass). Compare this to Bethesda, which Microsoft announced it would buy back in 2020 until the deal finished almost a year ago. Since then, no exclusive game has been released for Xbox - but one has been launched for PlayStation 5 (Deathloop) and another (Ghostwire Tokyo) is on its way for Sony's console. The first Microsoft exclusive game from Bethesda, Starfield, is not due to be released until November.

In short, expect games from Activision Blizzard to be exclusives in the future, except for titles that are already available for other formats. Thus, Overwatch will continue to be updated for PlayStation, Call of Duty: Warzone will be playable on Sony consoles, and Diablo collections may well launch for Switch just as Quake did. That being said, there is one exception however, and that is that Microsoft chose to honour contracts made when they bought out Bethesda (which is why the two aforementioned PlayStation 5 games remain timed-exclusives).

The Microsoft Offensive
It is obvious that a game like Call of Duty: Warzone will continue to exist and be developed for Sony consoles. New, upcoming games, however, are not likely to do so, just as with Bethesda.

Sony has held the marketing rights to the Call of Duty series for a long time. How long this extends and how it is structured is not public information, but if Microsoft follows the same principle of agreements made, Call of Duty could continue to be released for PlayStation consoles for a few more years, and possibly also with some kind of exclusivity. After that, however, potentially as early as 2023 (depends on the agreements as said, breaking them would cost money and be considered unfair) Call of Duty is probably going to be a PC and Xbox-exclusive series.

Another big change I think will come from this is a major structural shake-up of Battle.net. Microsoft sells its games through the Microsoft Store (PC and Xbox) and Steam, and will of course want to continue to do so with Activision's and Blizzard's titles, I see keeping these only on Battle.net as completely out of the question. And the step from there to Steam is very small as well, some will probably be back on Valve's service. Battle.net may well remain in some capacity, but it's unlikely to be for other purposes than accessing Activision Blizzard titles in the future.

The Microsoft Offensive
The Xbox division has grown enormously under Phil Spencer, and his Xbox Game Pass venture now has 25 million users.

With that being said, it's time to focus on something we know a lot of you have been wondering about. After all, Microsoft is buying a shaky giant. This year's Call of Duty felt stale, Blizzard has all sorts of problems, and the whole company suffers from a seemingly toxic work climate and has a top executive (Bobby Kotick) who is probably the industry's least popular amongst gamers. In a post on Xbox Wire, the Xbox boss Phil Spencer writes this about the matter:

"As a company, Microsoft is committed to our journey for inclusion in every aspect of gaming, among both employees and players. We deeply value individual studio cultures. We also believe that creative success and autonomy go hand-in-hand with treating every person with dignity and respect. We hold all teams, and all leaders, to this commitment. We're looking forward to extending our culture of proactive inclusion to the great teams across Activision Blizzard."

He also adds that until the deal is done, Activision Blizzard is a separate company that technically doesn't even have anything to do with Microsoft:

"Until this transaction closes, Activision Blizzard and Microsoft Gaming will continue to operate independently. Once the deal is complete, the Activision Blizzard business will report to me as CEO, Microsoft Gaming."

I can't interpret this as anything but bad news for Activision's top management, where there will be a major shake-up, and hopefully less top-down management in the future. Another consequence is that I suspect annual Call of Duty may be a thing of the past. The teams will be given more time to deliver better games and be able to try new ideas. One can also imagine the teams wanting to do something else, like, what would a Halo look like if it was developed by Infinity Ward? And maybe Joanna Dark could be a guest character in Overwatch? And why not have Toys for Bob (Crash Bandicoot 4: It's About Time) make the Banjo Kazooie game that fans have been asking for since forever?

The Microsoft Offensive
This is what Microsoft's host of major developers looks like after the acquisition of Activision Blizzard. Image from Xbox News.

A reasonable guess is that the deal will be finalised sometime this fall, and that we'll then get a streamed event of the kind we got after the Bethesda purchase. Until then, Microsoft won't try to control Activision Blizzard in any way, and the really big consequences, as I said, will be noticed years from now. Making a blockbuster takes at least three or four years, and if Microsoft's ownership becomes official in October, the first blockbuster fully developed under Phil Spencer's direction won't be released until 2026 at the earliest, assuming the studio developing starts its new project on day one of Microsoft's ownership.

The fact that this will have a huge impact is probably beyond doubt. But the extent of it and exactly how, is something we won't be able to answer until the end of this generation.



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