When Microsoft bought Activision Blizzard last February, we were surprised at the huge sums involved. Then we moved on. I think the situation is much more worrying than we think.
I must say that I have been very busy over the past few months and now that I’m back more often for RDS Video Games, this situation has not changed. I think it’s still worth talking regarding.
Some are worried, “What happens if Call Of Duty becomes exclusive to XBox?” “, but it’s not tant an issue directly. At least not yet.
The problem is that Microsoft can use Activision to pull the rug out from under the entire industry and build a monopoly.
The horrors of a monopoly
Did you know that monopoly game demonstrates very well the harmful effects of a monopoly? All the players are eliminated and those who remain try to survive while the one who will win controls almost all the squares.
Right now, it’s not for nothing that big games sell for $70, $80 or even more. Development costs run into the hundreds of millions of dollars because they take many years to build.
But Microsoft disrupted that business model by introducing Game Pass, what some are calling the Netflix of gaming. With this service, you have access to hundreds of titles for a handful of dollars per month.
Without embarrassment, Microsoft buys in front of everyone a bunch of companies in order to be able to place their acquisitions on their servers.
Little by little, and sometimes in big costly maneuvers, Microsoft has gotten its hands on an impressive number of intellectual properties. Here is one short list, try to read them in one breath to see: Doom, Wolfenstein, Call Of Duty, The Elder Scrolls, Tony Hawk, Quake, Halo, Hearstone, World Of Warcraft, Warcraft, Fallout, Overwatch, Diablo, Starcraft, Guitar Hero , Gears Of Wars and even Caesar which I discussed with Stéphanie Vandelac.
And say there’s still some left a lot that I did not name!
Unfair competition
People might say, “Yeah, but Microsoft isn’t blocking PlayStation owners from playing Call Of Duty,” which is technically true.
However, if a game comes out at $70 on a console and it is offered for a dozen dollars with a library including hundreds of games, we are not comparing the same offer at all. The latter is too good to be refused by consumers.
And there, some will answer “Yes, but Nintendo and Sony just have to make their own Game Pass first! “. They wouldn’t be able to do that. Here’s why: I think Microsoft is having an impressive loss of money with Game Pass.
The genius of their operation: they can afford it. Microsoft is more than ten times bigger than Nintendo and Sony combined. Nintendo makes games. Sony makes games and tech devices. Microsoft makes games and the operating system that the vast majority computers in the world utilise.
All this allows Microsoft to support Game Pass losses as long as they feel the need.
Too good to be true
Microsoft employs the same strategy of Amazon. She’s willing to take losses on every video game as long as it helps wipe out the competition.
What Microsoft wants right now is not money, it’s market share. Microsoft wants all gamers to switch to the XBox.
In fact, I think Nintendo has its own universe with Mario and Zelda. They are a little on their desert island with their own products and target markets.
For its part, Sony does not have the means to release the next God Of War or Horizon for $12. These games must stay at $70 to be profitable.
For its part, XBox is able to sell its consoles et Game Pass Ultimate for $30 per month. Do we agree that they are almost giving them away?
An offer you will regret
I absolutely don’t blame anyone for joining Game Pass. In this economy with inflation kicking our ass, I understand wanting to save wherever we can.
But what will happen if Microsoft gets a monopoly (or near-monopoly) on the video game industry? We will have entrusted the entire industry – its finances and its morality – to an unscrupulous multinational.
Microsoft does not want your good. They want to make a profit. Neither is Sony and Nintendo, I know, but neither aim to control the market so much.
What’s left?
Once its hands on the wheel, Microsoft may decide to increase its prices while lowering the quality of its games. Historically, this kind of powermove leads to waves of layoffs as well as poor conditions for workers (as if things were already going well with crunches that don’t make sense).
Through all of this, there will remain independent developers who will try to be on their service, which will have become the only place to discover them. Once there, they will be at the mercy of the conditions imposed by Microsoft in order to see their icon available alongside the others.
An inattentive eye might believe that Microsoft is trying to become the Netflix of video games with their Game Pass, but they are instead aiming to become the Amazon, with all the dystopia that entails.
When we have news of employees who have to urinate in bottles, something Amazon initially denied, we will be disappointed. But not surprised.
section written by Mario J. Ramos
The questions raised by my colleague Pierre-Luc above are relevant and valid. On the other hand, I found it important to qualify with a different point of view. I will summarize my opinion on the subject in a few points:
Xbox Game Pass democratizes video games
It is certain that by acquiring Activision-Blizzard, Microsoft brings back a lot of marbles in its basket. In fact, Microsoft does not have as many marbles as its competitor Sony and other industry giants such as Tencent, when it comes to video games. However, it’s important to note that 1) Microsoft has no intention of making franchises that are already cross-platform exclusive to Xbox; they also want to bring Call of Duty back to Nintendo consoles, among other things! And 2) it is now possible to play “Xbox” without having an Xbox, thanks to cloud gaming. You can access the Xbox Game Pass library of games on virtually any screen you want.
This is in stark contrast to Nintendo and Sony, which, like Apple, tend to develop closed platforms.
This without also mentioning the real and concrete efforts that Microsoft is making to make video games accessible to people with physical, visual, etc. disabilities; whether with adapted peripherals or options in their first-party games.
Xbox Game Pass allows some indie games to exist
A monopoly is not a good thing and it is indeed problematic if indie developers find themselves with few options to bring their games to life. That being said, from the perspective of indie developers finding themselves on Xbox Game Pass, the experience seems mostly positive. If an indie game is found on the day of its release on Game Pass, it is very likely that Microsoft has partially or entirely financed the development of the game, even without exclusivity or just temporary exclusivity. This takes the performance pressure off the shoulders of the developers, of being able to cut their teeth with a first game and perhaps experience a commercial failure without having to close the studio for lack of funds to start the next game.
Microsoft has also greatly contributed to popularizing indie games on consoles during the Xbox 360 era and seems to continue to be a profitable environment for independent developers.
There’s also the reality that some games that are more experimental are very difficult to sell. As an Xbox Game Pass subscriber, you’re more likely to decide to try a game genre you wouldn’t have if you had to spend $20 to buy it. We can also take as an example the similar service of Apple Arcade, where the creator of Final Fantasy, Hironobu Sakaguchireleased his game Fantasian, composed of scale-model dioramas, explaining that he might not have released this game elsewhere than in this kind of service.
To answer the title question: is Microsoft jeopardizing the video game industry with the Xbox Game Pass? Perhaps the traditional business model is in jeopardy, but another will simply emerge. With PlayStation which has just greatly improved its offer PlayStation Plusand Nintendo which continues to improve Nintendo Switch Online, it is clear that there is a demand for this type of “buffet” style subscription. It’s a model that is also really more advantageous for the average person who wants to play games without worrying regarding what to buy.
What is the real impact on developers? This is what is still difficult to measure. To be continued…
