GamesIndustry.biz: Buying Activision Blizzard is the industry's biggest gamble

[the-pi-guy]

Moreover, neither of these companies are beginning this acquisition from an ideal starting point. Microsoft is still in the process of really trying to get its first-party game studios off the ground, so it's not like there's a well-established studio system and product pipeline that Activision Blizzard's various studios can be integrated with. And Microsoft is still in a process of integrating its last major gaming acquisition, Bethesda, which remains in the "hugely promising" pile regarding its contribution to the Xbox platform and is unlikely to actually start delivering major first-party titles for quite some time.

All of which is to say that while this is absolutely the most aggressive commercial move any company has ever made in the gaming space, it's far from being a slam-dunk certainty. It's possible, even likely, that in ten years' time we'll see this as having been a grand turning point in the battle for console and streaming supremacy -- but it's certainly not impossible that things go a very different direction and we instead find "remember when Microsoft paid all that money for Activision Blizzard..?" being both setup and punchline for a gag about big-spending hubris.

Sony will be perturbed by this deal, but also keenly aware of the complexity of what Microsoft is undertaking and the risks involved, and thus wary of making any rushed or panicked moves in response. Moreover, Sony's own strategy has, in recent years, leaned more and more heavily on first-party exclusives from its own very impressive set of internal studios, making the PlayStation business more "Nintendo-like" than it's ever been before.

It's still reasonable to imagine that some defensive acquisitions might be being explored by Sony -- it seems far more likely that the Activision Blizzard deal is the end of a Microsoft spending spree, rather than the beginning of one, but Sony will still be mulling over whether there are any third-party publishers it really doesn't want to see taken off the board by its rival. There's some low hanging fruit there -- Sony could probably put together a deal to acquire a company like Capcom or Square Enix relatively easily, perhaps even Ubisoft -- but we shouldn't expect to see Sony rush to make any big deals or change its overall competitive approach significantly just in order to respond to the Activision Blizzard buyout.

The way Sony has built up its studios so far has been slow, cautious and careful, and while there have been some misses, generally it's done a great job of maximising cultural fit and keeping its studios doing great work post-acquisition. That issue of cultural fit is a huge question mark over Microsoft's acquisition, but Microsoft is a multi-trillion dollar company which can survive even a deal this big going south.

Sony is a smaller company by orders of magnitude, and if it makes billion-dollar deals they absolutely need to succeed; it simply cannot afford to take the kinds of risks that Microsoft can happily gamble on. This isn't to say that a major deal like buying Square Enix is impossible, but if it does happen, it'll reflect a huge degree of confidence on Sony's part over its ability to fit that company into the firm's existing line-up of studios and products.

Buying Activision Blizzard is the industry's biggest gamble | Opinion | GamesIndustry.biz