Home Technology News Analysis | Microsoft’s regulator-appeasing claims about Game Pass ring hollow

Analysis | Microsoft’s regulator-appeasing claims about Game Pass ring hollow

Analysis | Microsoft’s regulator-appeasing claims about Game Pass ring hollow


Microsoft’s unprecedented $68.7 billion purchase of embattled video game giant Activision Blizzard has antitrust regulators sniffing the scene with eyebrows raised, prompting a response this week from the tech giant. Activision Blizzard’s Call of Duty series, it said, will continue to launch on Sony’s PlayStation consoles as well as on Xbox, while Microsoft’s Game Pass subscription service will bring franchises like Overwatch and Diablo to other devices, including phones, via streaming.

That latter point — repeatedly emphasized by Microsoft — glosses over an inconvenient fact: Game Pass is itself a platform, one that allows users to access a rotating selection of hundreds of games to download and play for a low monthly price. In spreading it far and wide, Microsoft is not performing some act of selfless magnanimity. Instead, it’s setting itself up to come out on top in the next video game console war, one in which apps and services win the day, not specific devices. (A U.K. regulator argued as much in a decision published Thursday, which amounted to the first real public challenge to Microsoft’s planned acquisition).

In short: Microsoft is building the Netflix of games. Being everywhere is to its advantage.

In a post published Thursday, Xbox boss Phil Spencer wrote about the “principled path” the company is following in its acquisition of Activision Blizzard. Despite concerns that “this deal might take franchises like Call of Duty away from the places where people currently play them,” Spencer said Microsoft intends to do the opposite. While looming behemoths like “Starfield” and other games from Microsoft’s expanding stable of studios will be Xbox exclusives, he positioned Game Pass as an equalizing force.

“Game Pass empowers developers to bring more games to more players, not fewer,” Spencer wrote. “We intend to make Activision Blizzard’s much-loved library of games — including Overwatch, Diablo and Call of Duty — available in Game Pass and to grow those gaming communities. By delivering even more value to players, we hope to continue growing Game Pass, extending its appeal to mobile phones and any connected device.”

U.K. warns Activision merger gives Microsoft ‘unparalleled advantage’

Taken at face value, this seems like a respectable anti-competitive measure. If you can play games on a plethora of devices, then how is Microsoft restricting access? But this is spin, and should be viewed as such. Microsoft is positioning a highly competitive move — getting what is functionally a Trojan horse for its platform and ecosystem onto as many devices as possible — as something that will level the playing field.

It’s an audacious claim, bordering on disingenuous. If the console wars were fought along the same lines as they were in previous generations, Microsoft’s reasoning would make sense: The industry’s definition of a platform used to revolve almost entirely around proprietary devices and hardware. But this generation has seen companies — especially Microsoft — expand their borders to encompass services and live service games that span mobile, PC and even smart TVs. The game has changed, and everybody knows it, including Sony, which launched its own competing PlayStation Plus subscription service earlier this year and purchased “Destiny 2” creator Bungie to expand its live service offerings.

Microsoft’s path forward is clear: Continue to widen its lead in building what is functionally the Netflix of games by filling out Game Pass with original content, bolstered by the video game studio purchasing spree the company has been on for the past few years. This will not transform the video game landscape into a purely digital one overnight, but there is a possible not-too-distant future in which Microsoft takes more pages from Netflix’s playbook — establishing (temporary) dominance in the service space and repeatedly raising subscription prices in ways that inconvenience, annoy and turn off users. Furthermore, Game Pass ensures that certain games will only be playable on Microsoft’s terms and could thus fall prey to the pratfalls of similar services: boom periods for creators followed by sobering busts and rights expirations leading to content suddenly vanishing.

The Competition and Markets Authority (or CMA), a United Kingdom regulatory body investigating Microsoft’s acquisition of Activision Blizzard, has pointed to the potential of Game Pass to tip the scales in a subscription market that’s still in its “infancy” as a primary concern, making Microsoft’s response here even more baffling. Microsoft, however, insists this is what’s best for the industry.

“For all the players and game developers out there,” wrote Spencer, “you remain at the center of everything we do, and we will continue to listen to your feedback and do everything we can to nurture this industry we all love.”

But no matter which way you slice it, Microsoft is doing what’s best for Microsoft. Players, developers and the industry as a whole are, at best, secondary concerns.


Go to Publisher: Technology
Author: Nathan Grayson