TechScape: With a $67bn takeover in the works, is it finally game on for Microsoft?

Just a few months before the Within acquisition, however, Microsoft had successfully pulled off a much bigger coup: spending $7.5bn to acquire ZeniMax, the video game publisher that owns properties including Skyrim, Doom and Fallout. The deal went off without a hitch, giving Microsoft a flagship set of first-party developers and hundreds of titles to offer for free to subscribers of its Xbox Game Pass service.

It clearly expected the acquisition to go through as smoothly as the ZeniMax purchase had. Despite the clear strategic benefits, the purchase felt like an impulse buy, taking advantage of a sinking stock price at the company following months of legal wrangling over a sexual harassment scandal, as well as weak financial results from Activision Blizzard itself.

Call of Duty, by contrast, is a machine that Activision has rebuilt itself to power. Three development studios rotate producing one new entry every year, with a host of smaller units providing support in roles like asset creation and play testing, and a new massively successful free-to-play Fortnite competitor, Warzone, bolted on top of the whole thing. The cinematic single-player campaigns are renowned for being interactive blockbusters, but the multiplayer mode are where the series dominates.

They worry that, the centre of gravity of online gaming would gradually shift to Xbox: first taking the Call of Duty players, then taking the people who play other games with them, and then taking anyone who plays games online at all.

It might be hard to feel too sorry for Sony, a company that indisputably is the market leader in home consoles and has used its heft to win battles before, but regulators are paying attention. After half a decade of being the gentle giant everyone loves to forget, might 2023 be the year Microsoft remembers why its competitors all live in fear of antitrust enforcement?

If you want to read the complete version of the newsletter please subscribe to receive TechScape in your inbox every Tuesday.