The ninth generation of gaming has brought plenty of advancements and new trends. The phasing out of HDDs in favor of zippy SSDs has all but eliminated loading times, while the rising popularity of VR gaming expands the horizons of what video games can aspire to be. Cloud gaming is also becoming increasingly mainstream, threatening to make physical media and home consoles less necessary in the near future. While gamers navigate all these rapid changes, they also have to make sense of the recent wave of studio acquisitions by Microsoft and Sony.
In but a few months, both Microsoft and Sony have expanded their stable of first-party studios. While some gamers are glad to see the two companies make big moves and breathe new life into studios, others are concerned that the consolidation of power will harm the gaming industry. Regardless of how gamers feel, it seems that neither Microsoft nor Sony are interested in slowing down any time soon.
Microsoft’s Massive Acquisitions
Since the launch of the Xbox Series X/S, Microsoft has not been shy about acquiring new studios. ZeniMax Media was acquired by Microsoft in March 2021. The acquisition puts Bethesda Softworks under Microsoft’s umbrella, and with that plenty of popular franchises have now become the property of Microsoft, including Fallout and The Elder Scrolls. ZeniMax is also the parent company of Arkane Studios, Tango Gameworks, id Software, and MachineGames, which brings hit franchises such as Wolfenstein, Doom, The Evil Within, and Prey to the Xbox Game Studios family. The acquisition cost Microsoft a whopping $7.5 billion, and it was a significant event in the gaming industry not just because of the attached price tag, but also because of speculation that future games from certain franchises will be Xbox and PC exclusives.
The ZeniMax Media acquisition was not enough for Microsoft, however. In January 2022, Microsoft announced that it would be acquiring Activision Blizzard for the staggering price of close to $69 billion. The astronomic acquisition, if it passes, will make Microsoft the third-biggest gaming company by revenue, with only Tencent and Sony sitting ahead. With the acquisition, a plethora of franchises will fall under Microsoft’s ownership. This includes the ever-popular FPS series Call of Duty, as well as Overwatch, World of Warcraft, Diablo, and Crash Bandicoot to name a few. The acquisition has been a point of concern particularly in the world of eSports, and it remains to be seen whether Microsoft’s deep pockets will improve the Call of Duty League and the Overwatch League, or whether exclusivity deals will end up crippling the growing eSports industry.
Sony Seizes Some Studios
Sony has also been on a heated buying spree. In 2021 alone, the company acquired five studios. Most of the studios will be familiar to PlayStation fans, and the acquisitions make sense in terms of Sony’s long-term goals in the gaming industry. Bluepoint and Housemarque are studios that both have a long working history with Sony, so it is not unexpected that the studios would be acquired. Returnal, recently released by Housemarque, is an eccentric but successful PS5 exclusive, while Bluepoint’s remake of Demon’s Souls wonderfully shows off the power of the console.
Firesprite has plenty of knowledge of VR gaming, and it will be an asset to Sony with the upcoming launch of PS VR2, while Nixxes Software, which specializes in making PC ports, will help with Sony’s continued drive to penetrate the PC gaming market. Lastly, Valkyrie Entertainment is a studio that has had experience helping other Sony first-party studios, and will likely serve a supporting role.
Sony decided to start 2022 off with a bang by announcing its plans to acquire Bungie for $3.6 billion. Bungie is the creator of the Halo series, which has since become one of Xbox’s flagship franchises. However, in recent times, Bungie is better known for the online FPS series Destiny. Sony’s acquisition of Bungie may bode well for the company which many have noted has a weak spot when it comes to FPS and online multiplayer experiences. Although Bungie is part of the PlayStation family, Jim Ryan, who is president and CEO of Sony Interactive Entertainment, has stated that the Destiny creator will remain an “independent and multi-platform studio and publisher,” which may be good news for gamers worried about potential exclusivity deals.
The Arms Race Between Sony and Microsoft Will Only Continue
Although both Sony and Microsoft have been spending staggering amounts of money on studio acquisitions, it is unlikely to stop soon. As the gaming industry grows, both companies wish to keep up with its expanding demands and remain one of the top players. In a recent interview, Jim Ryan stated that Sony is “by no means done” when it comes to studio acquisitions, and gamers “should absolutely expect more.” Microsoft has a similar strategy going on, and Phil Spencer, Microsoft Gaming’s CEO, has stated that Microsoft is “definitely not done” when it comes to acquiring studios. There is reason to believe both Spencer and Ryan, as journalist Geoff Keighley has reported that he has received word from multiple people that there are “a few other big video game deals in final stages of negotiations.”
Some do fear the consolidation of power that is occurring, and there are many good reasons for this. It may lead to further exclusivity, which is a matter that has divided gaming communities. Furthermore, having fewer independent studios may potentially lead to less innovation. Jim Ryan claims that there is no power consolidation happening. Instead, he argues that “this had nothing to do with industry consolidation. This had everything to do with a shared vision and how we could do things better together.”
Regardless of where gamers stand on the matter, they can expect to see more studios getting bought up very soon as Sony and Microsoft find themselves in a studio acquisition arms race. Whether this ends up being a positive development for the gaming industry and gamers, or whether it serves to benefit capitalistic needs primarily, has yet to be seen. However, it is clear that whatever happens, the gaming industry will not be the same.
