My initial thinking is that this is sort of an attempt to do to gaming what vertical integration did to Hollywood.
https://twitter.com/matthewstoller/status/1483455407859372039
Some initial thoughts. The Microsoft-Activision acquisition is clear evidence of consolidation in gaming. It's not just that Microsoft already owns 30 studios, it's that Activision itself is a roll-up of 25+ gaming studios. A merger of mergers.
There are reasons to think Microsoft will run Activision better than its existing leadership, which is terrible. But the clear goal here is to build out its streaming service Game Pass, and more broadly to achieve market power in the ecosystem of gaming.
The problem here is the combination of distribution and production, or what is called vertical integration.
We've seen that vertical integration in Hollywood into streaming giants who own distribution and production has been very bad for creators, and for independent producers. wga.org/the-guild/advo…
It's trickier with gaming, because Nintendo has always integrated its games and hardware in a way that film/TV never have. Still, much of the gaming industry is in open systems and cross-platform play matters.
The parallels here between Microsoft's relatively low cost Game Pass streaming fee and Netflix's below cost pricing, followed by price hikes, are interesting. mattstoller.substack.com/p/the-slow-dea…
Microsoft famously gave away IE to destroy Netscape, and organized to block distribution of its rival. It hasn't stopped. It priced its Teams product at a very low cost, and bundled it, to destroy Slack. Same with cybersecurity tools. mattstoller.substack.com/p/an-economy-o…
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