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Winners & Losers: Microsoft buys Activision for $69 billion – will own Call of Duty, Candy Crush and World of Warcraft

Xbox Game Pass Ultimate subscribers are the winners – GameStop is the biggest loser

Matt Swider

Jan 19, 2022

I’m still tracking PS5 restock, Xbox Series X restock and PSVR 2 pre-orders daily, but I’m expanding my tech news, buying advice and deals output.

📰 Now the big news

Microsoft just leveled up its Xbox portfolio in a major way, announcing that it’s buying Activision Blizzard for nearly $69 billion (nice!).

📜 Early history in 30 seconds
Activision, better known today for Call of Duty, Candy Crush and World of Warcraft, was founded 43 years ago in 1979 as Computer Arts, Inc., and operated out of the garage of co-founder David Crane. Crane and three other programmers left Atari to form the first third-party video game company and get proper credit for their work. Hits like Pitfall! made Activision a household name among early 1980s gamers.

Through several studio acquisitions and one merger, Activision’s portfolio grew tremendously, especially between 2000 and 2010.

📝 10 Activision Blizzard franchises Microsoft will own

Call of Duty
Candy Crush
World of Warcraft
StarCraft
Overwatch
Diablo
Spyro/Skylanders
Crash Bandicoot
Guitar Hero
Tony Hawk’s Pro Skater

Microsoft already owns these franchises:

Halo
Minecraft
Gears of War
Forza Motorsport, Forza Horizon
Microsoft Flight Simulator
Fallout (Bethesda)
The Elder Scrolls (Bethesda)
Doom, Quake (Bethesda/id Software)
Wolfenstein (Bethesda/MachineGames)
Starfield (next Bethesda game exclusive to Xbox/PC later this year)

📈 Winners & Losers

What does this surprise acquisition mean for Xbox gamers in 2022? How about PlayStation 5 owners who are on Microsoft’s rival platform?

⬆️ Biggest winner: Xbox Game Pass subscribers

Xbox Game Pass was already a great deal before today, and Microsoft plans “to launch Activision Blizzard games into Game Pass” upon closing the deal in months.

Business is booming: 25 million subscribers are paying at least $9.99 a month for Microsoft’s on-demand service, likened to ‘the Netflix of video games.’ It gets better: 'Game Pass Ultimate’ costs $14.99 a month, combining Xbox Game Pass and PC Game Pass, and throwing in Xbox Live multiplayer, EA Play games and cloud gaming.

25 million subscribers are paying at least $9.99 a month for Microsoft’s service dubbed ‘the Netflix of video games’ for 840 games now … Can you imagine Call of Duty and every Microsoft/Bethesda/Activision/Blizzard game for one low price?

I added it up: there are 840 games on Game Pass, including Microsoft’s games (Halo, Forza) and Besthesda’s game (Fallout, Elder Scrolls, Doom). This includes day-one releases, so I didn’t have to wait to get Halo Infinite or Forza Horizon 5 at launch. They were on Game Pass hours before physical stores opened.

Can you imagine Call of Duty and every Microsoft/Bethesda/Activision/Blizzard game on one day for one low price (hopefully staying at $9.99/month)?

It’s such a good deal PlayStation is poised to copy the idea by merging PlayStation Plus and PlayStation Now in a few months.

Image credit: MediaNews Group/Long Beach Press-Telegram via Getty Images

⬇️ Biggest loser: GameStop – ouch

Activision games coming to Xbox Game Pass is good news for everyone – except GameStop. GME stock fell 6.6% today on the Microsoft news.

It makes sense. The more Microsoft and Sony sell games directly to consumers, the less GameStop, the middleman, has the ability to take a cut from new game sales and, importantly, its far-more-lucrative pre-owned game sales.

The GME stock price fell 6.6% today on the Microsoft news.

Why would you pay GameStop $10 for a used game when it’s available digitally for $9.99 a month with over a thousand (by the time Activision joins Game Pass) other new and old games straight from Microsoft?

Image Credit: Getty Images/Christian Petersen

⬆️ Winner: Sony gamers – yes, even you!

Sony has its work cut out for it. Microsoft has the ultimate say on the future of Call of Duty, Overwatch, and maybe most ironically, Crash Bandicoot. But this is where PS5 gamers may benefit from Microsoft ratcheting up its competition with Sony.

The PlayStation brand has had a deeper well of IP (intellectual property): God of War, Uncharted, Ratchet & Clank, Gran Turismo, Spider-Man, Horizon, Ghost of Tsushima and The Last of Us. It could easily resurrect other IP, like MotorStorm, Jak & Daxter, inFamous, Twisted Metal and Sly Cooper. At times, Final Fantasy games (like FFVII Remake) have remained exclusive to PlayStation consoles in a major win.

But Microsoft, admit it, offers better value when it comes to playing its back catalog. PlayStation Now doesn’t compare. With 25 million subscribing to Xbox Game Pass, there’s suddenly an impetus for Sony to match that awesome on-demand access by merging PlayStation Plus and PlayStation Now. That’s a win for even PS5 consumers.

⬇️ Loser: Redundant employees

I’ve been around long enough to know that major video game acquisitions lead to employees being made redundant, even in the face of hopeful language.

“Today’s agreement to acquire Activision Blizzard is incredibly exciting,” wrote Microsoft Gaming CEO Phil Spencer in an email to Xbox employees. But it’s unlikely to be so rosy for everyone.

Media consolidation usually sees support roles go first. “Why do we need twice the HR headcount?” and “Which teams are underperforming?” Activision, through its many studio acquisitions, has gone through this before, but now it’ll be on the receiving end of these questions.

⬆️ Winner: Reorganizing Activision Blizzard

Activision garnered the worst press of any video game company in the last six months due to alleged sexual harassment scandals and coverups that reportedly ensnared even CEO Bobby Kotik, all the way at the top of the company.

Numerous complaints in July 2021 resulted in employee walkouts, a lawsuit from the state of California and the ‘exiting’ of over 30 employees. So Microsoft’s acquisition happened at the right moment: it has the power to reorganize the publisher in a way Activision couldn’t do on its own.

⬇️ Loser: Media consolidation

It’s fun to get distracted by IP crossovers, but there are ramifications to media consolidation. When Disney bought Marvel in 2009, Star Wars in 2012 and 20th Century Fox in 2017, it put an unprecedented amount of power in the hands of one media company, eliminating competition.

Microsoft buying Activision is on that level for games. Activision was already a juggernaut in the gaming industry, and now instead of competing with Microsoft, it’s going to work with the company, something that could drive up prices and narrow thinking, as we’ve seen again and again with monopolies.