Monopoly Money: The Rapid Consolidation of the Games Industry

2022 is already the biggest year for the games industry since 2014. Not since GamerGate has the industry been forced to witness such a seismic shift. Although this time the shift is both cultural and financial. In January of this year Microsoft bought Activision-Blizzard, owner of some of the most popular game franchises of all time and a publisher and studio collective deeply mired in workplace harassment and misconduct controversies. Later the same month Sony bought Bungie, a company that had once held sway over the first person shooter market with the Halo series and later the live service Destiny games. They have also been stuck with labor misconduct and crunch issues since their very inception. So yes Microsoft and Sony have bought two of the most successful gaming companies in history but they have also bought their problems. More so what does this mean for the future of the games industry? One that is already dominated by three enormous conglomerates.

It was a fair assessment that Microsoft would clear house when the Activision-Blizzard deal was finalized but it was never going to be the righteous delivery of justice it should be. Activision-Blizzard’s CEO Bobby Kotick – the head of the snake so to speak – is due to leave the company on a golden parachute of $390 million once the acquisition is complete. Many others named in the lawsuit will likely follow him while their mostly female victims will have no such safety net and be left with a comparatively paltry sum should the lawsuit succeed as well as years of trauma to contend with.

Microsoft paid $68.7 billion for Activision-Blizzard. An enormous amount of money certainly but it’s also an enormous consolidation within the industry and that’s without taking the Sony-Bungie deal into account. Microsoft now own three of the biggest game franchises – Call of Duty, World of Warcraft and Overwatch – in the world. With the acquisition of Call of Duty publisher Activision and all of the game’s development companies Microsoft has the AAA budget shooter locked down. The biggest challenger to Call of Duty was Halo or Gears of War. Now they’re all under the one umbrella. But with this figurative gold mine comes unresolved law suits and a host of irate, fed-up staff who are more than willing to unionize. What was once a six month long headache for Activision-Blizzard is now a years long headache for Microsoft.

But Microsoft and Sony aren’t finished yet. In fact they’ve barely started. Just last year Microsoft completed the acquisition of Bethesda, owners of Fallout, developers of The Elder Scrolls and publishers of Doom and Wolfenstein, all for a cool $7.5 billion. This all amounts to monopolization. In an industry lorded over by three companies richer than God it’s easy to see how smaller studios get snapped up and single person developers are hired to work on larger projects. This will ultimately amount to studios working on “indie games” financed by companies that are our more boring equivalent of cyberpunk zaibatsus. In 2018 alone Microsoft announced the acquisition of four new studios including Ninja Theory while Sony snapped up their third party golden child Insomniac Games in 2019 further solidifying their hold in the endless tug-of-war over Spider-Man.

Advertisement

But here’s the kicker: none of these latest big acquisitions are set in stone yet. Contrary to popular belief the Federal Trade Commission (FTC) still has the power to investigate and, if necessary, negate acquisitions such as these. Antitrust laws exist in their neutered versions for a reason. It happened to movie studios in 1948 when the Supreme Court ruled that movie studios could not own movie theatres and therefore only play their own films or films starring the actors contracted by the studios. A similar, if not exactly the same, thing could happen with the recent acquisitions by Microsoft.

Further Reading: Is the Activision-Blizzard Lawsuit the Beginning of the End for the Games Industry?

Of course these things take time both to organise and to finalize. Both Microsoft and Sony’s most recent deals were likely months or even years in the planning and Microsoft’s larger acquisition of Activision-Blizzard won’t be finalized until at least June 2023. It’s also important to remember that game studios aren’t movie studios so the antitrust laws that have done such a poor job of keeping Disney, Netflix and Time Warner ATC in line won’t work the same way for Microsoft or Sony’s game divisions. Realistically the FTC’s investigation into the merger of Activision-Blizzard into Microsoft is likely a courtesy rather than a stringent antitrust sting. A move like this generally means more money for everyone and the foundation of fair competition that antitrust laws were built on is dust in the wind at this stage.

Very few unions exist within the video game industry. You can probably count them on one hand. Of course the amount of games studios attempting to unionize is growing year by year. One of these is the Quality Assurance (QA) department at Raven Software, a studio owned by Activision-Blizzard. Within days of announcing their desire to unionize Raven announced that it would be embedding the QA employees throughout the company in different departments. The company line is that this gives the QA department close access to the developers so they can more easily point out problems to them. The workers say that its to break up the group trying to unionize in response to poor treatment and their consistent strikes in response to their parent company’s gross mistreatment of it’s employees.

Unionization is a dirty word in an industry that forces workers to slave over tight deadlines. It’s also the only thing that may save the industry from total collapse due to employee burn out. At big companies like Microsoft and Sony there is little oversight when it comes to game development and the time spent by employees at work. Reports of crushing overtime (known as crunch) rocked Sony’s in-house studio Naughty Dog in 2020 after the release of The Last of Us Part II but the parent company left Naughty Dog to figure out its own solution. Similar reports came out of Destiny developer Bungie, Sony’s most recent purchase. The question remains: are Microsoft and Sony forcing their recent buys to clean house and shape up before they enter the fold or are they hoping the situation will sort itself out? Only time will tell…

Featured Image Credit.

Leave A Reply

Your email address will not be published.