Video Game Industry Turning into Oligopoly

The Tech Industry has seen radical shifts in the past few years, including this one. Facebook’s huge Meta announcement has caused rifts throughout the industry and competing companies have been quick and aggressive to respond. Microsoft has thrown its deep wallets into the ring with the surprising news of buying the video game developer Activision Blizzard.

This all-cash acquisition totaling $70 billion was a response to Meta, hoping Activision can help with its mobile and virtual-reality technology. This deal will make Microsoft one of the largest video game companies if it survives reviews from the U.S. and European corporate regulators. If it does pass, which it’s most likely to, it will also be the largest tech acquisition in history. But Microsoft has been buying video game companies for a while now.

 The most recent news from Microsoft, before buying Activision Blizzard, was their acquisition of ZeniMax Media, the parent company of Bethesda Softworks, id Software, and Arkane Studios, massive and famous video game developers throughout the industry. This happened in 2020 and the deal cost Microsoft 7.5 billion dollars, to put the amount and size of the buyout of Activision to scale.

But Microsoft is not the only video game company with deep pockets. This year Sony Interactive Entertainment announced it will buy Bungie for 3.6 billion dollars. Bungie, like the companies Microsoft bought, are also famous developers. They have also released huge titles like Destiny and Halo and fully showing this new age of grabbing developers left and right.

There is little reason to think this will decrease in the coming years as well; according to the Entertainment Software Association, 67% of video game executives believe that the number of mergers and acquisitions will increase over the years. With such high buyouts happening so quickly, it might not be a crazy idea to imagine the video game industry being controlled only by a handful of companies. 

This will contrast with the ever-increasing need for unionization in the industry. According to the Game Developers Conference, almost 50% of developers believe that the entire industry should unionize. With the cost of video games rising and the competition shrinking, the likelihood of a better work environment, for an industry projected to be worth $256 billion by 2025, seems to become less and less likely.