Microsoft Could Push for “Windowed Access”, “Enhanced Experiences” With Activision Titles on Xbox – Analyst

MIDia Research's Karol Severin says it wouldn't be "financially sound" for Microsoft to turn off revenue from Activision titles on PlayStation.

Posted By | On 20th, Jan. 2022

Xbox Activision Blizzard

The gaming world has been buzzing following the acquisition of Activision-Blizzard by Microsoft for nearly $70 billion. Though the deal will complete in Microsoft’s 2023 fiscal year, there are already reports of CEO Bobby Kotick leaving and some Activision content being exclusive to Xbox. MIDiA Research senior analyst and product manager Karol Severin spoke about the latter to WCCFTech and said it wouldn’t make much financial sense to simply have Activision-Blizzard titles exclusive to Xbox.

“Given Xbox’s cross-platform and gamer-friendly narrative, the impact is less likely to be about ‘draconian exclusivities’ and more about ‘enhanced experiences’ on Microsoft-owned assets. The big hits, in particular, produce a significant (and often majority) revenue from the Sony side. It wouldn’t be financially sound to turn that revenue off, particularly because given Microsoft’s mega-portfolio (if the acquisition closes), it doesn’t need to.

“Engaging in hard exclusivity could risk alienating users on the other side, which still remain very valuable. Instead of exclusivity on whole titles, Microsoft can push more softly, e.g. through windowing access (e.g. first month of new CoD only on Xbox, not Sony), discounts, exclusive in-game content, experiences, etc.”

So it’s more likely that Microsoft will have certain features like Xbox Series X/S optimizations, Smart Delivery and Game Pass availability exclusive to Xbox instead. Given Sony that Sony expects the publisher to “abide by contractual agreements” and have Activision games remain multiplatform, it does put a bit of spanner into some exclusives (at least for the time being). But the impact of this acquisition is still a big deal for Sony and even Nintendo to some extent.

“A big response would be great for Sony – very important in slowing down the effects of Microsoft’s acquisition (IF it goes through, which Sony will be monitoring closely, I’d imagine). If it does go through, the sheer difference in company size will make it very difficult for Sony ($124 billion market cap) to come up with an acquisition answer comparable to what Microsoft ($2.3 trillion market cap) just announced.

“A similar dynamic applies to Nintendo at $54 billion market cap. Having said that, more acquisitions are likely. M&A reportedly reached $85 billion in 2021, three times that of 2020. 2022 almost beat that mark already (we’re at $81.4 billion considering Zynga’s deal with Take-Two) and it’s not even the end of January!”

With that in mind, it wouldn’t be surprising if a company like Electronic Arts or Take Two Interactive is next in line for acquisitions. Stay tuned for more details and updates in the coming months.


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