The future of some of the world's biggest entertainment franchises is
in the balance. Stop me if you've heard of one of these. Overwatch.
Stop. Yep, heard of that one.
I've got a whole list here, so if you don't mind just waiting.
Sorry.
Starcraft. Spyro. Guitar Hero. Candy Crush.
[pauses for a moment]
World of Warcraft. Hearthstone. Crash Bandicoot. Tony Hawk's Pro Skater.
[pauses for a moment]
Call of Duty.
Can I say stop now?
Yes! These are just some of the games that are published by Activision Blizzard,
which Microsoft is trying to buy for 104 billion dollars. It's the biggest tech deal
in history and could have major implications for the gaming industry and gamers around the world.
What, even me?
Yes, even you! Do you mind? Do you want to go get lunch or something?
But the deal has hit a big roadblock in a little something called the Competition and
Markets Authority, or CMA. That's a regulator in the UK. And it says that the merger would
make Microsoft even stronger and substantially reduce competition in the market. We're in an
age of huge acquisitions. This is a world where Disney owns Marvel and Star Wars and
21st Century Fox. Where Facebook bought WhatsApp and Elon Musk bought Twitter.
When I grew up, there were let's say 1000 websites and each one did one thing. Now
there's say 50 websites and they're all doing 20 things. Now that we spend more time on fewer and
fewer platforms, the value of owning those platforms and being able to get content to
users through those platforms is getting bigger and bigger with each passing year.
It's the job of regulators like the CMA to ensure that markets
stay competitive and that one company doesn't gain a monopoly. You might have
heard of something called anti-trust laws. They're designed to prevent big companies
from getting together and fixing market prices and buying up smaller companies.
For the consumer, I think the biggest issue is this lack of competition,
this lack of variety. The ability for one actor, or one set of actors being
able to so strongly push their vision and their idea within this field.
Apple, as the world's richest tech company, is constantly being scrutinised by regulators,
like a recent investigation into whether they have a monopoly in the mobile games market.
Now the specific reason that the CMA have decided to block Microsoft's acquisition
of Activision Blizzard, is that they think Microsoft will monopolise the cloud gaming
market. We know what cloud gaming is, yeah? It's like, rather than putting in a disk
or [Thomas attempts to put a CD into computer] oh. Like, rather than downloading a game,
you just stream it from a server like Netflix but for games. Yeah, you know it. Cloud gaming
is still a relatively small market, but the CMA note that it's growing fast,
and even a relatively small change in Microsoft's favour might “substantially reduce competition
in this developing market to the detriment of current and future cloud gaming users.”
What we are seeing in terms of this cloud gaming focus here is what these CEOs and
their teams think is coming next. And so I think we need to view this in terms of like, how do
companies imagine their futures, and what kinds of futures are they trying to push on to users?
See although Microsoft thinks this deal will make games more accessible,
and give more support to game developers, the CMA are sceptical. They think that Microsoft
will sooner or later restrict these games to their own streaming platforms.
It's taking ownership even further away from the user and to these core centralised systems,
which these huge companies run. So although cloud gaming isn't big right now, it's part
of the kind of imaginary of where gaming will go according to these multibillion-dollar companies.
So they are going to appeal the CMA’s decision.
I don't think Microsoft will take it lying down, as it were. They will want to move
forward with it as much as they can. I think this is also an attempt to refocus
to ensure that some of the most popular and well-played franchises do still come to Xbox.
Which brings us to the company that Microsoft wants to acquire. It's usually referred to as
Activision Blizzard, but really we should say Activision Blizzard King, because those are
the three entities that make up the company. Activision is best known for Call of Duty,
that's their behemoth money-making machine. Blizzard is behind much loved long-running
franchises like Warcraft, Diablo, and Overwatch. And then there's King, which is a part of the
company that isn't talked about much, but it makes the most money by far. They’re behind
mobile games like Candy Crush, which keeps making just ridiculous amounts of money.
Hey! I'm playing it right now. I got my lunch.
King is one of the main reasons that Microsoft is excited about this deal.
We need to get relevant on mobile and Activision Blizzard King is the
largest mobile publisher outside of China [Reporter off camera: They did, yep.] so.
They've been making deals left and right to try and seriously pinky promise that the acquisition
would benefit the whole gaming industry and that they won't monopolise the market,
like their deal with Nintendo to put Call of Duty games on the Switch,
and with Nvidia to put games on the GeForce Now streaming platform.
Any arguments that they make, implying that this will bring people closer to the games which they
enjoy playing, I think has to be seen as just a kind of veneer over this game being played by
immense multibillion corporate actors, which is so far apart from the average lives of normal people,
and which is solely about these massive industrial juggernauts duking it out for economic supremacy.
Microsoft's acquisition has recently been approved by the European Commission and
China's State Administration, joining 35 other countries whose regulators
have approved the deal. But for the deal to go through, they still need to get approval
from the Federal Trade Commission in the US and somehow get the CMA to change its mind.
Overall, it seems like a good thing, right?
I think this is almost always bad for the end user.
I'm looking forward to seeing this deal go through.
Yeah I'm tentatively positive.
More consolidation in the gaming industry is a poo sandwich. I think this is terrible for gamers.
Oh yeah, it’s not good.
I'm not necessarily like woohoo because they did it. but I'm hoping maybe now
Activision Blizzard stuff will get better.
Gaming is now a bigger entertainment industry than film and music by far. And if everything ends up
being owned by one single company, then the unique creative spark and the competitive playing field
that got these entertainment franchises started in the first place could be extinguished.
And we might have to end up paying Microsoft more money.
And that too, yeah.