Acquisition Wars – Sony and Microsoft and the gathering of studios.

Acquisition Wars – Sony and Microsoft and the gathering of studios.

If you check most gaming sites these days, you are going to see a lot of chatter about Acquisition Wars – Sony and Microsoft buying studios and so on. Most are rumours, some turn out to be true and everyone is an armchair investor. X company should buy Y studio or publisher for Z reasons. Here at Any Button Gaming, we’re not immune to it. Our Editors chat is often punctuated with rumours and thoughts about the next breaking news.

It is often framed as a straight out game of one upmanship. Sony buys this studio so what is Microsoft going to buy? Obviously, the big turning point was the news last year that Microsoft had acquired Zenimax, a move which gave them a gaggle of world leading developments studios and IP via the Bethesda brand. It was shocking news – Bethesda had a large library and history of being multi-platform.

Ever since, the focus has been on the next splurge – a new front on the traditional console war. Or is it? If you can get past fanboyism and petty rivalry, the current spate of acquisitions hints at the stark contrast between the long term strategy of Microsoft and Sony (and possibly the entire console space).

OMG we bought a studio

The buying (and disbanding) of studios is nothing new. Many major publishers have a long history of buying studios and adding them to the portfolio. Sometimes, this goes well and they become a major asset (I mean, the 2006 acquisition of Dice worked out pretty well for EA). Sometimes, the studios are mismanaged and then stripped down and sold (I mean, the 2006 acquisition of Lionhead Studios didn’t work out well for Microsoft).

Such is the is rather turbulent life of a games studio. Still, we have seen a string of acquisitions over the last few years. As well as the Zenimax acquistion, Microsoft have bought Double Fine, Obsidian Entertainment, Ninja Theory, Compulsion Games, Undead Labs and Playground Games. It rounds out a now impressive 23 subsidiaries of Xbox Game Studios.

Hellblade 2 is incoming to Gameass

Hot off the press this week is the revelation that Sony had acquired Housemarque, the maker of recent PS5 hit Returnal. In addition, they acquired PC port specialist Nixxes Software, not to mention the recent acquisitions of Insomniac Games and Team Asobi. It is heavily rumoured (due to a marketing blip) that remake specialists BluePoint will also join the list of Sony Interactive Entertainment Worldwide Studios – SIE for short).

Everyone loves a good rumour

Who’s next? We’ve seen rumours that Microsoft, with their very deep pockets, are going to buy Sega. Or Konami. Or, well, anyone. EA maybe? Possibly everyone? As a rebuttal, fans have speculated that Sony should buy Square Enix. Or Konami. Or Sega. Just anyone really.

The console wars are well and truly alive right? Maybe. Behind the headlines, a picture is forming that gives a good hint at the direction of travel with the two platform holders. Let’s look at Microsoft first. A common complaint during the Xbox One era was that it didn’t have enough exclusive enticement in the form of games to capture gamers imaginations. First party games were few and far between the quality of those released was varied.

Many have seen the spending spree of the last few years of a way of combating that complaint. That, though, suggests that Microsoft are committed to the traditional console loop. New console, exclusive games to make players want said console, money thus made. That clearly isn’t what Microsoft want though. Their strategy in the last few years is clearly based around its subscription service with Gamepass. They want games playable on console, PC or even the cloud that entice players to subscribe to a monthly cost. In this case, it is a numbers game. They want a big library of games, with regular content added to keep people in a monthly loop.

A clear strategy in the acquisition wars for Sony and Microsoft

Viewed through this prism, the acquisitions are clearly there to bolster that offering. Buying Zenimax brought a huge library of games that are dear to many hearts. Further instalments will only increase that. Varied content, regularly available. Like Netflix, it doesn’t necessarily need flagship titles to rally around but a volume of games that make the subscription more enticing.

On the flip side, Sony are doubling down on their strategy of exclusive flagship titles that generate hype. In the tail end of the PS3 and through the PS4 era, Sony had got their first party output to a consistent level of high quality. The likes of The Last Of Us, Horizon Zero Dawn, God Of War, Ratchet and Clank, Marvel’s Spiderman were all pure first party output that garnered great user reviews (provided you like third person narrative games that is).

GOD we love this game.

Their studio acquisitions are more about building that brand further. Insomniac were a developer that had a great relationship with Sony that went back many years. Buying them out brought an experienced relationship officially into the fold. Housemarque are the same – another studio that had worked well with Sony and with recent success. The purchase makes sense. Sony are also investing in those studios. Guerilla has expanded, as has Insomniac with Sony investment. The intention is to increase output of studios with a good track record.

Whose world view will win?

We aren’t here to try and predict how successful each strategy will be. Gamepass is a great deal for gamers, but no evidence has been provided that it is capable of turning a profit. Microsoft has deep pockets but when will it need to start proving results? Sony’s strategy has worked well across the last two generations but it is based on a very traditional model. With the best will in the world, if it releases some duds, it has little to fall back on.

Microsoft is pushing for a very clear Software as a Service model that will utilize its cloud power. This could be a gamechanger if it can convince gamers that this is a good deal. Sony are going the other route – a PlayStation is a gateway to curated exclusive content that you buy to own. Both have their merits, both have their flaws.

Yet when it comes to flying around rumours of acquisitions and what each platform holder will do next, those rumours need to be put into context of the overall strategy. Would it make sense for Sony to buy Square Enix? We’d venture not – it would get access to a lot of IP’s but also a set of developers that produce very different content. Square would take a lot of work to get curated and consistent content. Would it make sense for Microsoft to buy Konami? Again, some interesting IP’s but a low yield output with an organisation that has shied away from the mainstream gaming space in recent years.

Acquisition Wars – Sony and Microsoft

What we think you can expect to see is Microsoft spending a lot to get as many titles launching on Gamepass. That could be through acquisitions or exclusivity deals. Sony, on the other hand, are going to be pumping money into getting their current studios in line and expanding their output. For evidence, look at Insomniac who have turned out 3 major titles in as many years (as well as a full remaster). Guerrilla are also expected to move to producing multiple titles concurrently. Any future acquisitions will be to support that strategy – known quantities in other words.

So when you see talk of the Acquisition Wars between Sony and Microsoft, think less of a spending splurge and more of the carefully laid strategy each are striving for. What’s your thoughts though? Do you agree that these are clear strategies? Have a preference?

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