Nintendo and SEGA were once locked in a highly competitive hardware battle
Nintendo and SEGA were once locked in a highly competitive hardware boxing (Prototype: SEGA / Nintendo)

Dorsum in September 2020 when Microsoft announced its acquisition of Bethesda for around $7.v billion, it was a big move — one that some fans would accept been excited by, and others less then. Information technology was a huge bargain at the time, with that buy giving Microsoft Gaming / Xbox a number of new studios and creative teams, not to mention an influx of seminal gaming properties such as DOOM, The Elder Scrolls, and Fallout. The contempo Activision Blizzard understanding — which is a long fashion from existence finalised due to regulatory processes — felt like something different, nonetheless. The sheer sum of money involved ($68.seven billion), and the size of the company being acquired arguably represents a shift in policy. Microsoft isn't aiming to merely boost its Xbox offering, information technology seems intent to dominate with information technology while likewise notionally growing into 'metaverse', which is a conversation for another day.

Now we've had Sony acquire Bungie, the creator of the Halo series (though it departed the franchise years ago) and well known for its Destiny games and expansions. It's another big sum, at $3.half dozen billion a little nether half of what Microsoft paid for Bethesda. PlayStation CEO Jim Ryan has also fabricated clear that the acquisitions aren't finished yet.

Over the past yr or more, and amplified since the Xbox / Activision Blizzard deal in January, at that place's been a slightly strange discourse online among some gaming fans. Plenty have been looking up market values of the world's biggest publishers then talking nearly "I wish Sony / Microsoft / Nintendo would purchase them!", every bit if they're hotels on a Monopoly board. While it's fun to play 'What if...?' sometimes, the general attitude of hoping Company X is acquired by Corporation Y is non a specially healthy one, and increasing corporate consolidation is unlikely to exist good for the video game industry.

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Image: Microsoft / Xbox

It tin can become both ways. The 'video game crash' of the early '80s happened in part considering there were too many competing products without sufficient quality. Since the late '80s nosotros've had a largely established design, with ii or iii major competitors in the hardware market place — SEGA vs Nintendo, and so PlayStation joined in, then equally SEGA departed we moved into this current era of Nintendo / Sony / Microsoft. That's just the 'big players' with dedicated gaming hardware, of course, and in the past decade or more we've seen transformations in the manufacture with the rise of mobile gaming, steady growth of VR and likewise streaming.

Some consumers seem to think it's all a chip of a laugh, every bit if Sony and Microsoft in particular should build mega alliances of gaming IPs through acquisitions and then fight to the expiry

This is arguably a peculiarly disruptive menses, with technology shifting and enormous companies like Alphabet (Google) and Apple tree continually linked with entries into the defended hardware market, while Valve (Steam) is testing the handheld waters with the Deck portable. All companies are doing what they're designed to do — assess the market, brand the right moves and maximise profits and opportunities. All the same some consumers seem to remember it'due south all a bit of a laugh, as if Sony and Microsoft in particular should build mega alliances of gaming IPs through acquisitions and then fight to the death.

The problem with that is the potential dangers of giving one or two companies too much power and ascendancy in the industry. It's always a balance, but while the current PR talk after acquisitions is effectually maintaining relations and support across platforms for the 'good of gaming', it'south all simply soundbites. No company volition spend billions of dollars on an acquisition but to gather its rivals around for a sing-song and a sharing of the spoils. To call up that would be naïve.

Imagine a world where on one side you accept Microsoft with Bethesda, Activision Blizzard and, say, Ubisoft; on the other side Sony has EA, Take Two and Capcom. Cantankerous-platform porting becomes the exception rather than the norm, so many gamers 'pick a side', enjoying i set of mega franchises while missing out on others. Or mayhap they buy one platform and utilise streaming apps for the other side — which is arguably the play Microsoft is eyeing with Game Pass — calculation more subscriptions that may benefit the platform holders and participators, merely strip all sense of value from gaming for other, smaller publishers and developers on the exterior that still need to sell their game and hope to break even.

The talk around corporate takeovers may be getting to Mario
The talk effectually corporate takeovers may be getting to Mario (Paradigm: Nintendo Life)

Nosotros're many years and numerous scenarios away from that happening, but in that earth gaming isn't a uniting force, it's yet some other source of division. Where, also, would that leave Nintendo? It may come as a surprise to some considering information technology too is a successful platform holder, but Nintendo is way off the scale of business concern of Microsoft and Sony, corporations that have numerous hugely assisting interests beyond gaming. Nintendo isn't even the biggest pure amusement company in gaming. Nintendo runs a very streamlined, efficient business with around 6500 global employees; Activision Blizzard, every bit a comparison, consistently has over 9500 employees.

Nintendo isn't of the size and scope where it owns and acquires large companies, only it operates very effectively through partnerships (and in some cases minority shareholdings). For case, Nintendo works closely with companies like HAL Laboratory, the makers of the Kirby serial. It owns effectually a third of The Pokémon Company. We had the recent conquering of Next Level Games — which is frankly small fry compared to the other deals nosotros've been discussing — simply for the near part Nintendo and a number of its exclusive games be through partnerships and collaborations with the likes of Bandai Namco, Koei Tecmo, PlatinumGames and more. As a business concern, information technology doesn't demand the risk and headaches associated with owning and managing those companies in order to have profitable partnerships that produce excellent results for players and shareholders alike.

This strange frenzy among some onlookers for an acquisition 'arms race' runs counter to how Nintendo operates, and indeed how information technology tin can operate. If in a decade nosotros have one or ii fifty-fifty bigger gaming superpowers like Microsoft or Sony, following spending sprees, that could put Nintendo in a potentially dangerous position.

If dominant 'Indie' publishers like Devolver Digital eventually get acquired by platform holders, even the Indie scene would be directly impacted by the acquisition arms race
If dominant 'Indie' publishers similar Devolver Digital eventually get caused by platform holders, even the Indie scene would be directly impacted by the acquisition artillery race (Epitome: Devolver Digital)

Fifty-fifty beyond that, though, a forcefulness of the video game industry right at present is that it gives opportunities for small titles to flourish, or we see mid-big publishers putting their games on most or all platforms, reaching more gamers. Information technology's tough out there for pocket-size developers, of course, only in that location are opportunities for breakout hits like Among The states, Valheim and the like. That happens through independence, from bigger corporations like EA down to the smallest Indies. The potential issues of corporate consolidation isn't but near large franchises, either. Look at Indie powerhouse publishers like Devolver Digital, or even the likes of Thunderful, and imagine a scenario where they're besides scooped up in acquisitions. What we cease upwards with are gaming communities that are fifty-fifty more gated than they already are. Surely nobody wants that.

We shouldn't be encouraging massive platform holders to buy-out major publishers and developers, nosotros should exist concerned by the potential endgame.