Analyzing the Strategic Alliance Between Tech Giant Microsoft & Game Industry Heavyweight Blizzard/Activision

The deal between Microsoft and Activision/Blizzard will have numerous consequences for the gaming industry. However, you may have noticed varying opinions on the deal, with some stating that it may destabilize the essential balance between console platforms.

However, the Activision/Blizzard deal with Microsoft has both good and bad implications, regardless of platform loyalty. So what are some of the implications of the Activision/Blizzard deal, and is it as bad as you may think? Let’s find out.

What Is the Deal Between Microsoft and Activision/Blizzard?

Before breaking down the consequences of the deal between Activision/Blizzard and Microsoft, you may need a quick refresher regarding what the deal entails.

Specifically, the deal between Microsoft and Activision/Blizzard refers to the acquisition of Activision/Blizzard by Microsoft for $68.7 billion, making it the biggest video game acquisition in history.

The deal allowed Microsoft to own properties such as Call of Duty, Diablo, and World of Warcraft and utilize them on Xbox platforms and services. As for reasons you should use Xbox Game Pass or other Xbox services, including franchises like Call of Duty on gaming services make Xbox services all the more enticing.

And with Xbox owning massive Activision/Blizzard franchises, there is also the worry that the deal will enable Xbox to turn multiplatform franchises into Xbox exclusives. And while platform exclusivity is a more nuanced effect of the deal, with specific clauses, there are undoubtedly consequences of such an industry-shaking deal.

The Potential Problems the Deal May Cause Gamers

While the deal is good for Xbox as a platform and Xbox gamers, there are many damaging implications for the industry and gamers alike, even if you’re a huge Xbox fan.

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1. Xbox Owns a Sizable Chunk of the Entire Gaming Industry

One of the main reasons the deal stands to cause issues for gamers is the prospect of Xbox holding a monopoly over the gaming industry. And with a monopoly, competitors are pushed aside, and you could find yourself forced to own an Xbox.

With Microsoft having already acquired Bethesda in 2021 for $7.5 billion, the scope for Xbox to push consumers to Xbox Series X|S for Bethesda titles already exists. If you want to play the AAA Bethesda title Starfield, you have to own an Xbox Series X|S.

Image Credit:Bethesda

Worryingly, the Bethesda acquisition was around nine times less than the Activision/Blizzard deal. And with Activision/Blizzard enjoying a massive presence in the gaming industry, titan franchises like Call of Duty and Overwatch could eventually become Xbox exclusives.

Xbox could use Activision/Blizzard exclusivity to monopolize some of gaming’s most popular franchises, forcing you to own an Xbox Series X|S as competitors may not be able to sell specific Activision/Blizzard titles.

2. Both Xbox and PlayStation Are Prioritizing Exclusivity

Aside from Xbox having a monopoly over Activision/Blizzard exclusivity and a sizable chunk of the industry, the deal further fuels the exclusivity race with rival platforms like PlayStation.

While there are many great Xbox Series X|S exclusives , acquiring Activision/Blizzard represents a drastic expansion of the exclusive games Xbox could offer. And typically, this is something that PlayStation is notoriously better at doing than Xbox.

Image Credit: PlayStation

The deal creates a precedent for PlayStation to match Xbox’s practices as its main rival. And with Xbox and PlayStation vying for further exclusivity, consumer choices narrow, forcing you to pick one platform over another to play certain games.

So, another unfortunate implication of the deal between Microsoft and Activision/Blizzard is the furthering of exclusivity competition between all platforms, restricting your choices as a consumer.

3. A Mismanaged Deal Will Result in Higher Priced Games and Services for Consumers

Aside from implications and problems linked to exclusivity, Microsoft’s acquisition of Activision/Blizzard has been flagged by independent experts as possibly increasing the costs of games and services.

The UK-based Competitions and Markets Authority investigated the deal between Microsoft and Activision/Blizzard. As reported by City A.M. , a CMA investigator stated that a mismanaged deal creates “higher prices, fewer choices, or less innovation.”

Image Credit: Xbox

While not guaranteed, the acquisition of Activision/Blizzard by Microsoft is connected by the CMA to a potential increase in the costs you may face for your games and gaming services.

And while there may be many reasons you will see the price of Xbox Game Pass increasing , the price tag of $68.7 billion for Activision/Blizzard will only inflate things further. So, even if you’re a fan of Xbox, you may still be affected by price increases associated with the deal.

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Why the Activision/Blizzard Deal May Not Be as Bad as You Think

While you certainly have good reasons to be dubious of the acquisition of Activision/Blizzard by Microsoft, there is evidence to suggest that the deal isn’t as problematic for gamers as previously thought.

1. Exclusive Games Have Always Been a Pivotal Part of Console Gaming

One of the main reasons you may be worried about Microsoft’s acquisition of Activision/Blizzard is how the deal stands to spur on platform exclusivity.

However, Xbox releases most of its exclusive games on both PC and Xbox, so the idea that the deal would make Activision/Blizzard titles solely available on Xbox Series X|S is unlikely. And even with an intent to make Activision/Blizzard titles exclusive, Xbox would be unable to do so until 2038, as reported by the BBC .

And if that wasn’t enough, Phil Spencer, the head of Xbox, confirmed via the Official Xbox Podcast that all future Call of Duty games will be available on all platforms.

While this doesn’t guarantee the exclusivity status of Activision/Blizzard titles forever, it does set a precedent that Xbox isn’t looking to restrict your options when it comes to gaming.

And even with new exclusive games, Xbox wouldn’t be doing anything that competitors haven’t done for years. PlayStation, for instance, acquired Bungie for $3.7 billion in 2022 and added PlayStation-exclusive content to Destiny 2.

So, while exclusivity may worry you, the deal is unable to affect platform exclusivity for at least 15 years, and even if it goes on to do so, it would only be following pre-established trends within the gaming industry.

2. Xbox Is Focused on Consumer-Orientated Gaming

While you may see the deal between Microsoft and Activision/Blizzard as stoking problematic issues for gamers, Xbox and its emphasis on consumer choice implies otherwise.

Despite Xbox holding exclusivity on franchises like Halo and owning massive games like Minecraft, Xbox prioritizes allowing you to choose how you play. Halo: The Master Chief Collection is on Steam, and Minecraft is available and cross-compatible on all platforms.

Along with multiple generations of backwards compatibility for Xbox consoles and Xbox All Access,Xbox is one of the most consumer-friendly platforms in gaming. Acquiring Activision/Blizzard spreads Xbox’s pro-consumer values to Activision/Blizzard titles.

Activision/Blizzard is also a company marred by controversy, as reported by Forbes . And with the completion of Microsoft’s acquisition,Forbes highlights that as a result of the deal’s completion, the Managing Director of Activision/Blizzard, Bobby Kotick, exited the company.

So, if you take the pro-consumer practices Xbox engages in with the changing of the guard at Activision/Blizzard, the deal injects hope into a troubled company, highlighting a positive change for Activision/Blizzard and consumers.

3. Xbox Is the Underdog of the Industry

There are also reasons for you to see the Microsoft and Activision/Blizzard deal as being unable to provide Xbox with a monopoly over the industry, even with Activision/Blizzard titles prioritizing Xbox services.

Throughout the acquisition of Activision/Blizzard by Microsoft, you may have noticed numerous stories and pushback from platforms like PlayStation speaking out against the deal.

But if you follow the discussions on Xbox and its place in the industry against competitors, Microsoft president Brad Smith said via Bloomberg UK that “if you look at the global market, Sony has 70% of that market, and we have 30%”.

Brad Smith also cited how PlayStation, at the time of the discussions, had 286 exclusive games and Xbox only had 59 to back up his statements. So, while you may be justifiably worried about the deal’s implications, you could see the acquisition as simply allowing Xbox to catch up to PlayStation.

Even with the acquisition of Activision/Blizzard, it may be more likely that competition between Xbox and PlayStation would increase instead of the industry being monopolized.

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The Acquisition of Activision/Blizzard by Xbox Improves Competition

Despite the deal between Microsoft and Activision/Blizzard having negative implications, there are plenty of reasons it isn’t as damaging as previously thought.

On the contrary, the deal elevates Xbox to a closer level to PlayStation, allowing for closer competition between gaming’s biggest rivals. And better competition means a better industry for consumers.

And with Xbox and PlayStation producing two rival powerhouse consoles in the Xbox Series X and PlayStation 5, you could even see the deal as pushing console generations to be the very best platforms possible.