Big Buyouts

Big things are happening in the video game industry these days. Big, possibly problematic things, but interesting nonetheless.

Before we start though, let's break down how console games are made and who makes them.

Traditionally, there are three kinds of development studios that make your favorite home console video games. The First-Party studios are the ones that work directly within the company making the video game system they are developing for.

Nintendo is the most obvious example of this. They make video game systems and they make games that can be played on their systems. In fact, most people probably don't even realize that the studio that makes Nintendo's highest profile games is called Nintendo Research & Development 1, and is just one of several internally owned studios owned by Nintendo.

First-Party studios are largely responsible for making the exclusive titles to any particular system. It's why you'll never see Mario jumping around on a PlayStation or an Xbox.

On the opposite end of the spectrum you have the Third-Party developers. These are the freelancers of the gaming industry. They make games with the intent of putting them in as many places as possible. So whereas Nintendo's Mario is exclusively limited purely to Nintendo consoles, you can buy Capcom's Mega Man games on basically anything.

In the middle of these are the Second-Party developers. The ones that aren't technically owned by a console manufacturer, but have contracted with them to make exclusive games for that system anyway. In essence, these studios serve the same function as First-Party studios and, occasionally, they even end up getting bought out and brought into the fold.

And by "occasionally" I actually mean "with seemingly increasing frequency."

In particular, both Microsoft and Sony have been buying up studios, bringing them in as first party developers exclusive to their respective consoles. In just the last few years Sony has purchased more than a half-dozen game developers, ensuring that the studios making the most popular games for the PlayStation will continue to make games exclusively for the PlayStation.

These recent acquisitions include "God of War" developer Valkyrie Entertainment and "Marvel's Spider-Man" developer Insomniac, the latter of which was surprising if only because most people kind of assumed Sony already owned them.

However, Sony's acquisitions pale in comparison to the moves that Microsoft has been making.

Once upon a time, Microsoft's acquisition of Rare was industry shaking news. The UK based studio, creator of many of the N64's biggest hits including "GoldenEye 007" and "Banjo-Kazooie," getting bought out was a big deal.

But then in 2014 Microsoft went and dropped $2.5 billion to acquire Mojang and with it, ownership of the Minecraft franchise.

That deal was dwarfed just a couple years ago when Microsoft purchased ZeniMax Media for $7.5 billion. This was an unprecedented move as ZeniMax wasn't just a game studio, but a publisher better known as Bethesda.

It's one thing to buy a small game development studio. It's another thing completely to buy the studio and their publisher along with it. Bethesda isn't some one-hit wonder with a single popular game to their name. This is a company that has their own showcase presentation at E3.

But even that deal pales in comparison to Microsoft's most recent purchase. Just a few weeks ago the company announced plans to purchase Activision-Blizzard for $68.7 billion.

Both Activision and Blizzard Entertainment were already massive companies when they merged in 2008. Together, the company owns "World of Warcraft," the Call of Duty franchise, and even "Candy Crush." Where Bethesda would go to E3 to announce their upcoming games, Blizzard held their own conventions.

And, assuming this purchase goes through, Microsoft will own them.

The $68.7 billion purchase really puts into perspective the disparity between seemingly rival video game console developers.

Back in the day, the video game industry was dominated by relatively small companies purely dedicated to video games. Nintendo, Sega, even Atari did video games and little else.

Of those three, only Nintendo is still in the console game, their competition replaced by corporate giants Sony and Microsoft. And while Sony is a massive company that makes electronics, movies, music, and a slew of other entertainment related media and technology… Microsoft is Microsoft. It sits in the company of Apple, Google, and Amazon.

The idea that Microsoft has spent the last twenty years competing in earnest in the videogame market suddenly seems oddly quaint. In reality, the industry continues to exist in its current state only so long as Microsoft decides to allow it.

In the long term, who knows what that means. Probably nothing good.

In the short term, it means a lot of games are going to be exclusive to either the Xbox or PlayStation.

Fortunately, I have a PC and all games (save Nintendo ones) seem to make it to PC eventually.

Travis Fischer is a news writer for Mid-America Publishing and wonders who will buy Sony first, Microsoft or Disney.