Although Elon Musk’s purchase of Twitter has overshadowed it, the acquisition attempt that should really be considered the most important in 2022 is an attempt Purchase of Microsoft Activision Blizzard worth over $68,700 million. If it comes to an end.
Now the purchase is paralyzed by the US Federal Trade Commission (FTC) antitrust lawsuit. And in Europe it will pass its filters.
Microsoft with Xbox will be a bigger ocean liner than it is nowand with the turn to the world of video games in the cloud with Xbox Game Pass, it will hit the table against its main competitor: Sony.
Microsoft’s strategy is a response to what has been a perpetual war in the video game world for years, rooted in the original Atari, the pioneer of game consoles. This strategy can be summarized in something that may be simple, but certainly not easy: be something that others don’t have, but that can be used by contest users.
The origin of Activision and how it changed the history of video games
Atari 2600 released in 1977., it was the first commercially successful video game console in cartridge format – previously done by the Fairchild Channel F. Prior to this, the machine and the video game were linked, but at this point the door was open for other developers to create video games. And also that the company can create new products (video games) that will expand the relationship with the buyer beyond the point of purchase of the console.
This console worked very well. Atari made $100 million selling cartridges, but 60% of that came from four or five blockbusters… that were made by the same four people: David Crane, Larry Kaplan, Alan Miller, and Bob Whitehead.
Seeing that Atari depended on them for such a percentage, they asked for a commensurate commission. They were refused, so they left to form their own studio. Guess which one? Yes Activation.
Crane, Kaplan, Miller, and Whitehead believed that the video game industry should function more like a book, music, or film industry, where the creative talent behind a project gets a greater share of the profits based on its success.
Thus was born the first studio and then a video game company, separate from the companies that had the software.
From Nintendo Model to Sony Model
In the early 1980s, investment in video game companies skyrocketed., causing a bubble that caused many to go bankrupt. The disaster was such that Nintendo did not want to call their console a console Nintendo Entertainment System, the well-known NES. Activision survived this purge by specializing in early personal computer video games.
The Nintendo model is well known and it cemented it in those years, creating their own games that had to be played on their own consoles, and allowed games only to third-party studios that passed various tests and paid them 30% of the profits from each license (Reminds no one of Apple ?).
A vision that, over the years, proved to be valid only for a Japanese company and for no one else. Today Sony or Xbox and of course studios are playing more and more to be liquid for any platform.
Yes indeed while Nintendo was growing with almost no competitors in the console world who didn’t want to be called consolesvideo game studios were tired of all these obstacles … And in 1989 a new competitor appeared: SEGA.
Basically, SEGA was born with the same standards as Nintendo in terms of restrictions, but Electronic Arts threatened to keep it out of their games, and it ended up giving up.
SEGA had good years, but they are over and the company that actually took the opposite approach to Nintendo was Sony.. After Nintendo’s initial collaboration proposal, another Japanese giant decided to create their own console to replace the cartridge CD-ROM. The problem was that Sony was not a game developer, so it became completely dependent on third parties.
New model change.
PlayStation hegemony, the advent of Xbox and the failure of the Nintendo GameCube
Since Sony had never developed video games, he approached Namco, which at the time was the benchmark for arcade games, to collaborate. Sony will have its games for the PlayStation, and Namco will have the technological support for its arcade machines. It worked, making Tekken and its console version a success.
Years have passed again, and with them generations of PlayStation. Sony has not only opened up to developers, but also provided opportunities that Nintendo did not provide.. Thus, at the turn of the millennium, the launches of PS2, Microsoft’s first Xbox, and Nintendo’s new bet coincided: game cube. Today we all know who lost.
Sony’s discovery of video games, from Xbox to software (since it was basically a PC to play in) in the face of Nintendo’s closure, this made the GameCube a disaster that the house of Super Mario could not overcome until the concept changes that the Wii brought and cemented the Switch. But when these consoles arrived many years later, they no longer competed for the same audience or most of the same games as the PS and Xbox.
In times of triple competition, studios began to develop their games, trying to make them compatible with all consoles. For example, the first call of Dutyfrom Activision, available in all of them.
And from a commitment to exclusivity to the cloud
However, changes took place in the following years. Among them, Merger of Activision with Blizzard in 2008 to create a huge studio that Microsoft intends to buy along with franchises such as Warcraft or Diablo.
At the time, Sony changed its exclusivity policy for certain video games, coinciding with the release of the PS3. The time has come when consoles have become almost distributors, brands, like the role of Paramount or Warner in the movies.
That, along with the technological failure that was Kinect on Xbox One, gave PS hegemony in this generation. It’s time for a change, and everyone, including a few big tech companies that have come into the sector with the intention of getting their piece of the pie, have bet on the cloud, the era we’re in now that has already left some dead bodies like Stadia.
That’s why Microsoft’s Activision Blizzard purchase is being watched so closely: it represents a new model change.. While Nintendo has always protected its product from the vertical, Sony is now still working on protecting the exclusive. However, the purchase could give Microsoft two options:
- Create Activision Blizzard games now exclusive to Xbox
- Develop an ecosystem that is horizontally open to all consoles, and therefore become something new. Being both a supplier and competition from others.
Going back to the beginning: to be something that others don’t have, but that can be used by contest users.
Source: Hiper Textual
