Analysts: Microsoft Will Acquire Other Studios If Activision Blizzard Deal Fails - News
by William D'Angelo , posted on 01 May 2023 / 8,094 Views
The UK regulator, Competition and Markets Authority (CMA), yesterday announced it decided to block Microsoft’s $67.8 billion acquisition of Activision Blizzard over concerns with cloud gaming. Microsoft and Activision Blizzard plan on appealing the decision.
Multiple analysts speaking with GamesIndustry says that if the deal ultimately fails they expect Microsoft to go after acquiring multiple other studios.
Midia Research's Karol Severin says that neither Microsoft and Xbox will "live or die by this acquisition."
"Activision is of course the desired target, but there are other places Microsoft can take its multi-billion war chest to," said Severin. "If this doesn’t go through, I’d expect for Microsoft to continue on its acquisition journey with other targets."
Kantan Games' Dr. Serkan Toto agrees thinking Microsoft could take a similar approach to Tencent.
"Microsoft will absolutely need to start looking at other possible acquisitions now," said Toto. "They are clearly behind Sony in terms of first-party games. If the deal doesn't happen, Microsoft will probably need to gobble up multiple studios to strengthen their software portfolio – and they still won't get something as big as Call Of Duty."
Parker Consulting's Nick Parker adds, "If the deal doesn't go through, and I'm not sure it can now, Microsoft will have lost out more than ABK in terms of market presence opportunities and will have to go searching for another target to fill its gaps in cross platform exploitation and user base proliferation."
Ampere Analysis' Piers Harding-Rolls says if the deal falls through it is unlikely it would mean a "wholesale review of Microsoft's games strategy."
Niko Partners' president and CEO Lisa Cosmos Hanson stated, "Microsoft has a challenge in keeping [its subscription] appealing and valuable to current and future users, as the service requires continuous release of new content in order to retain and attract users."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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That's a safe bet, they were planning on more acquisitions regardless of if ABK was approved or not. If ABK fails, I think we will see them go for a smaller publisher like Sega possibly. More individual studio acquisitions are possible as well, lots of new and older independent AAA devs these days.
i hope they do sega and capcom combined.
@Trunkswd can you pay us as analysts for the high quality analysis we perfom on the forum ?
Dunno why you got downvoted for such a level headed comment. We do a lot better analysis than this so we should received better than them.
I imagine Microsoft is going to acquire other studios regardless of the Activision-Blizzard failing or not.
Someone needs to give these analysts a raise!
Fr though, it shouldn't surprise anyone. Sony bought several studios ever since MS announced this acquisition, and have already said they're not done. As long as MS is done buying publishers, I don't think many will care that much. There's still a handful of support studios MS should've bought years ago lol.
No kidding sherlock :) Those analysts are good.
Unless they're named Michael Pachter.
It's par the course, but I feel like none of the big 3 should really be going for publishers, and instead go for separate studios or studio bundles instead.
Even if they go onto buying other studios, they really need to shape up and have at least a 5yr tenure plan for what is to come out of said studios they purchase, none of this "we've bought them, now what do we do?" nonsense.
But they go for publishers because it already have a big structure working for a high number of employees and IPs while independent studios may not have any big IP so they would be basically hiring 100+ people at once and "buying buildings".
Yeah, some studios within publishers can and do retain their own IP's, which can make buying a publisher and expecting all the IP's to not be a final deal, since the studio can just leave with their own IP.
Unless that publisher retains all IP's of each studio, like you said, you really would just be hiring more ppl you didn't need and obtain more buildings.
Though I still see publishers as a form of competition for the big 3, so I imagine buying out a bigger publisher means they are automatically allied with you, and thus stop becoming your competition (This was one of MS's strategies when they used their infamous "EEE" strat, back in the day).
Totally agree with you and reason why I'm not aligned with buying publishers or even big devs that make multiplatform games but very ok with small devs and/or devs that basically only have developed for you and even accepted some of the MS buying of mid to large studios that were said to be struggling as certainly is better to have MS buy them than to see the studio close.
They were probably planning on buying more studios regardless of if the Activision/Blizzard deal went through. No one can predict the future, with America attacking ticktok again, maybe Microsoft gets back into the mix and spends all that money on tiktok.
Please Microsoft, you can buy what you want but stay away from Capcom and Fromsoftware
FromSoftware isn't even possible no matter the cost as its part owned already by Kadokowa, Tencent and Sony. Capcom is also japanese so also impossible.
I'd like them to keep their grubby mitts off of Japan, period.
Always funny hearing "Sega" "Sega", the Japanese government/authorities would never allow it.
Within 5 years, Sega would be shut down because Japanese gamers don't buy Xbox and American Xbox gamers don't buy Japanese games. I actually don't care about Sony's stake in this. I just would rather that Microsoft not buy a bunch of studios with great legacies that end up getting dragged into Xbox's grave. I've already seen EA kill far too many once-great studios. With Sega that would mean that Sonic, SMT, and Persona would be as good as dead.
Not that I think they are going to buy Sega but between Xbox, PC and potentially Switch those games would do fine.
Between PC and Switch perhaps, but we haven't seem xbox selling much games did we, or by Xbox you mean Gamepass?
Hopefully they acquire studios instead of publishers.
Hopefully that's the case but as soon as the news broke yesterday quite a few Xbox gamers online started begging for Sega.
You mean the people that ask that MS stop playing nice and get rough (because 70B on a publisher is playing nice kkkkk).
It's two sides of the same coin. PlayStation gamers have been begging Sony to buy Square or Capcom this entire time lol. I've even read a lot of Take-Two recently xD I doubt anything like that is feasible though. If this was the early 2000's where Sega was all about Xbox exclusives, maybe, but even then, I doubt the Japanese government would approve such a transaction.
Then you enter the nation thread and most are actually against they consolidating those companies, myself included.
There never was a time such like this in the early 2000s.
Sega mostly evenly distributed their games over all 3 major platforms by target audiences or when they got payed for them.
Not to mention he's full of it because Sony fans only asked for acquisitions of Capcom or anyone after MS purchased Bethesda and canceled PS versions of their games. MS started this BS in 2020 with this nonsense. There's no 2 sided coin at all. There's just MS trying to buy the industry and I am glad the deal got blocked.
They have invested in all of them.
Double Fine is bigger and can now work on multiple projects simultaneously.
inXile grew massively and now has dedicated teams for things like audio and other stuff they used to have to contract out for.
Obsidian grew from around 160 or so to over 200 employees and still going.
Undead Labs got a new studio and an entirely new team.
Compulsion got an entirely new studio and have been growing since being acquired. Their Wiki says 80 people as of 2021, that's already double what they were when acquired and they've been hiring all through 2022 and 2023 so that number is surely higher.
Playground immediately went on a hiring spree with hundreds of job postings on LinkedIn and other sites like it. They now have two huge teams working on different projects.
Ninja Theory hired more people and a brand new studio. Are now a AAA developer and working on multiple projects.
I don't know much about the Bethesda studios but lets be honest, they didn't really need much in terms of growth, just investment of guaranteed money. And maybe I forgot one or two of the other studios they bought but please correct my memory.
People seem obsessed with this idea that money put towards ABK is money off the table for other studios or games, that's not how it works.
See, that's what I want to happen!
Now support and nurture startups and if they do good work incorporate them into Microsoft Game Studios.
There is no need to buy out big publishers from the free market and take the games they would already get away from others like they did with Zenimax/Bethesda.
yes, I see this list and I agree in theory...but in practice how is it they have this many studios and Obsidian seems to be the only company actually releasing games?
A drought is fine, but it's been a pretty steady trickle since 2017. Only a handful of games per year. No wonder they're struggling to keep up. Even hardcore Xbox guys I watch on Youtube are getting fed up with the lack of games.
They bought a bunch of smaller studios, virtually all of them already balls deep in existing projects, and they have been ramping all of these teams up since they bought them. It’s telling that you say only Obsidian has been releasing games, of that first wave of studios published, they were the biggest and really the only one with multiple teams already working on things.
So the goalposts are moved now from “invest in studios!” to “where are the games??”. My point is proven.
Its not enough to compete with Apple and Google.
Buy studios and small dev teams and fcken nurture them make your own games not fcken buying massive publishers and making it Xbox console exclusive.
TAKE TWO is a real game changer for system sales!
Yes sure if ABK doesn't pass Take Two would be a very easy purchase kkkkkk
If buying CoD wasn’t allowed then I wonder if buying GTA would be. GTA V sales rival those of all last gen CoD games combined.
It is possible that even being a single game studio if MS tried to purchase Mohjang today they would face a heavy scrutinny.
I'd rather they acquired studios that could revitalize dormant Rare IPs for Xbox.
Reboot Banjo Kazooie!
And do it right this time!!
That is most likely that they will go after multiple small studios that wouldn't get regulators scrutiny.
That was going to happen regardless of their ABK merger. If anything, letting it go through unchallenged would have signaled to Microsoft that it's open season for them.
Certainly agree that any easy pass would make they target another big publisher but with this many pushbacks even if the deal fails I don't think they will target a big publisher so soon.
Just do what sony is doign and do 68.7 billion dollars worth of permanent exclusives that last generations.
If the ABK deal fails, as is likely this will be bad for MS on multiple levels. They will lose access to an amazing slate of games, they will have spent years of effort and attention on a deal perhaps to the detriment of their own 1st party games, they will lise $3 billion dollars, and they have essentia humiliated themselves by admitting that despite their money and resources they are far behind Sony.
I love how these fanboy journos that cried yesterday arr starting to just beg for aquisitions. Gaming journalists are a joke.
What happens if approved in the US or European Union or both?
Unlikely - if Microsoft lose this they will re-evaluate their gaming division and exit the market. I said the same in March.....I've 1/2 way through my full prediction.
https://www.vgchartz.com/article/456450/eu-regulators-extend-deadline-to-decide-on-microsofts-activision-blizzard-deal/
That would be interesting. I wonder who would buy the Xbox business.
My guess is Tencent.
I would suggest someone like Samsung (console business) which would sit nicely with their home technology fitting. Gaming business - it's big enough to stand on its own.
It's a shame Microsoft as a corporation, when they get it right, are almost too good at what they do and It comes back to haunt them. Take the office products - they are unstoppable in that field. In Cloud computing (Azure) they are right up there with AWS and Google......but marry office&azure together which is what they are driving with 365 and I can see them getting into trouble further down the road.
I don't use Office or Outlook, but MS does dominate in business, They haven't gotten the message that they aren't really needed to make products for home consumers. They already had to back out of the mobile market as a platform holder. Maybe they should consider going third party in video games.
Gaming (at least high end) needs an xbox, gaming also needs a Microsoft Game Studios. What they don't need are a $2.2t company using its immense wealth to leverage its market dominance in current/future technologies to limit competition and corner segments. I can't see a way round it tbh other than either divest or have the entire games division run as a separate business.
In some ways it's like the premier league. It was great when all the clubs could compete and the ownership didn't really play a massive part - it was talent, then some were bought by super rich and they cornered the market, then some got bought by countries and they own it now. Microsoft in football terms would be the Public Investment Fund who own Newcastle.
No they won't.
No one is going to buisness that loses billions to develope hardware. Xbox will most likeky pull out of hardware but will remain as an Eco system under MS
Many Xbot’s embarrassed themselves yesterday by saying Microsoft should give up on this deal, when the EU is only a month away from deciding. Lucky none of these people make any important decisions.
I wonder which is the bigger market, the EU or the UK. Not hard to work that out.
Microsoft will wait to see what the EU does, and if successful, will then try to get around, negotiate or pressure a way to accommodate with the UK.
PS I personally don’t care about almost all of Activision blizzard games, so this really means nothing for me personally. But at least on Xbox there’s a much better chance of getting better Games from ABK.
