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So, Microsoft now owns Activision Blizzard. How will this affect the rest of the industry?
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this post was submitted on 17 Oct 2023
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Usually consolidation is done by expensive buy outs (which this one was). And if the company is public, the CEO's next goal (since it now has valuable IP and has eliminated a competitor), is to make that money back and do so fast (see Disney with Marvel, Star Wars, etc.). This means exploiting its newest IP, farting out something that a known audience / fanbase will show up for (again - unfortunately - see Disney).
This doesn't necessarily guarantee shitty outcomes (see Andor in the case of Star Wars being bought by Disney, see Overwatch after Activision bought Blizzard), but usually it comes with the territory of new bosses eventually trying to squeeze more value out of the IPs and team resources they purchased (see "Secret Invasion" by Marvel under Disney, and see "Overwatch 2" by Blizzard under Activision).
Depending on the company, they'll also do MASS layoffs to "eliminate redundancies" - which in theory means firing people whose jobs encompass the exact same practice, but in reality means a bunch of people are about to have their work load doubled.
The people at the very top of the bought out company will get HUGE piles of cash, plus some requirements they stay on board usually for some amount of time... and then most of them will probably bail the moment their stock "vests" - allowing them to start up new companies and begin the cycle of "make stuff, then get bought out by big company" all over again.
Rarely a key person stays on board for some time (see Carmack with Facebook / Oculus for example), but eventually even the most passionate dev sees that their new bosses will never fully get behind them in the way they were able to do when they were not owned by said parent company.
From a broader "industry-wide" perspective, it's probably not great either, because the mass layoffs at a gigantic well-regarded company means more workers competing across a mostly non-unionized industry for less jobs (and if you're just starting, now you've got to compete with someone who has "Blizzard" on their resume).
Worse still - because the video game industry is already pretty exploitative of its workers, since it (like VFX) mostly came into being after the Reagan era completely destroyed the public perception of unions, the jobs everyone will be competing for will just have even worse conditions since soooooo many (younger folks especially) dream of working on video games (until they get their first industry job, get a few years under their belt, and been there for more than one studio closure and decide that - if they ever want to enjoy having time with their family, owning a home, and living somewhere for more than 5 years, they probably should change jobs to some relevant field in software dev that pays better, has less hours, and is overall more stable).
TL;DR - Probably bad.
Layoffs have already hit this and other industries, including Microsoft, regardless of buyouts, and since this deal is fresh, it will likely happen again in the near future. But there's no need for them to squeeze value out of what they bought. They can revive dormant IPs just by making sure they run on modern platforms and putting them on Game Pass. That alone is a tremendous amount of value that Activision couldn't get regardless of how much they squeezed.
And a lot of people who leave or are let go in these situations go on to form new studios. If you think about it too, it doesn't make much sense that the jobs would disappear. The industry will support a certain number of games being produced, and someone's got to make them still.
A worse outcome to me still seems to me to be a world where Sony is uncontested in its console space.
All of what you said is true, but usually consolidation results in a net negative overall. It's why we (at least used to) have anti-trust laws. Companies - regardless of industry - tend to be monopolistic when they can get away with it.
However, I will say that your point about "reviving dormant IPs" is just another way of framing (albeit much more charitably) what I described previously. Capitalizing on well-known or well-regarded IPs with built-in large fan bases who will likely buy based on name recognition rather than what its Metascore is or how well it runs according to technical tests run by Digital Foundry.
Also, I agree with you that as long as Sony and Nintendo exist in the console space, the industry can probably endure. That sort of consolidation would probably result in some really bad shit. Price gouging, no more owning games - just licensing with shaky terms that they can change at any time, required subscriptions, upgrades, more egregious micro-transactions... ugh... as long as there are major competitors, they will do things like this every time one of the other one makes a greed-driven decision that pisses off the consumers.
I just wish we had the number of big game companies we had in the 90s and 2000s. There used to be dozens of pretty big name independently owned game dev studios in the city where I am, and now - among those still even open - I can't think of a single one still independently owned. The only 2 big ones I know of now in the area are subsidiaries of 2 major giant companies.
Trusts would be a very extreme case of consolidation, and if Microsoft were to qualify (they're close), it's certainly not because of its presence in video games.
I don't think I'm being charitable at all when I say these old games are dormant IPs. Star Wars Episode 3 was only a handful of years old when Disney bought Lucasfilm, and they were still making all sorts of merch and other products. Actually dormant IPs would be things like Metal Arms and Tenchu. They're not powerhouse franchises, but they're fodder for porting to modern platforms and bolstering Game Pass. Activision is reluctant to revive any of this stuff because it's money that could be spent on Call of Duty.
As to your last paragraph, it was inevitable, but we've been slowly trending toward getting that diversity back in the industry. It may not hit your town specifically, but the Devolvers, Paradoxes, TinyBuilds, Embracers, and Anna Purnas of the world are finding success catering to the customers the mammoth AAA companies abandoned.