Microsoft insiders grumble that until a few years ago the Activision deal would have sailed through. Lately, though, trustbusters have turned on big tech companies, alarmed at their rapacious growth
, took $1bn in its first month. The biggest game, “Call of Duty: Modern Warfare II”, took the same amount in just ten days. Spurred on by the pandemic, which saw video-game spending increase by nearly a quarter in 2020, the games industry will be worth more than $170bnGaming’s ballooning value is attracting the attention of regulators. In January Microsoft, which makes the Xbox console,, the publisher of titles including the “Call of Duty” franchise, for $69bn.
The second complication is a change in the games market. Microsoft plays up the weakness of its current position: “Last place in console, seventh place in. Yet it has taken a lead in the emerging market for game subscriptions and is well placed in the still-newer business of cloud-based gaming, in which the action is streamed to the screen, Netflix-style.
Adding “Call of Duty” to Microsoft’s library would make Game Pass still more appealing, regardless of the title’s continued availability to buy on PlayStation. Indeed, as Mr Jijiashvili puts it, “It will make Game Pass even more valuable when you have this game available elsewhere for $60 a pop.”CMA , which fears the Activision merger could “tip…the market in Microsoft’s favour before future rivals have a chance to develop”. Yet it is unclear whether or when such a shift will happen. Subscription gaming is growing fast, but even in five years will represent less than 10% of game spending, estimates Ampere. Streaming from the cloud is still less popular. Google will shut down Stadia, its unloved cloud-gaming service, in January. Amazon’s Luna service has yet to take off.
In defending its Activision acquisition, “Microsoft’s argument is positioned in the present,” says Piers Harding-Rolls of Ampere, whereas “theis more focused on the potential and the longer-term implications.” Most observers expect the acquisition to go ahead eventually, with a few conditions; blocking the deal on the basis of what the games market might look like in the distant future would be hard to defend.
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