Activision
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News Mash-Up - Week #26
The weekly roundup focuses on recent regulatory, corporate, and product developments within the gaming sector.
- The Federal Trade Commission has temporarily blocked Microsoft’s acquisition of Activision Blizzard due to concerns regarding reduced competition in the console market.
- Microsoft disclosed plans to launch its tenth-generation console in 2028 and highlighted the acquisition as a strategic move to gain a foothold in the mobile gaming sector.
- Activision Blizzard currently operates under a negotiated 80/20 commission split for game sales.
PlayStation's Top First-Party Games Now Cost >$200 Million to Make
Internal documents from the legal proceedings between the Federal Trade Commission and Microsoft have revealed significant financial data regarding Sony Interactive Entertainment’s first-party development costs and the commercial impact of the Call of Duty franchise on the PlayStation platform.
- Sony’s top-tier first-party titles now frequently exceed $200 million in development costs, with 'Horizon Forbidden West' costing $212 million and 'The Last of Us Part II' costing $220 million.
- The 'Call of Duty' franchise is a critical revenue pillar for PlayStation, generating $1.5 billion in worldwide consumer spending on the platform in 2021 alone.
- Over 43 million unique U.S. PlayStation users have played 'Call of Duty' since 2019, accounting for two-thirds of the platform's domestic user base.
What Are the Most Important Games on PlayStation
Analysis of a January 2023 YouGov survey commissioned by Microsoft provides insight into player behavior and brand loyalty within the European console market.
- Sony maintains a significant competitive advantage in brand loyalty, with 74% of PlayStation owners intending to stay with the brand for their next purchase compared to only 44% of Xbox owners.
- FIFA is the most influential title for console retention in Europe, with 6.4% of players stating they would switch platforms if the game were unavailable.
- Call of Duty and Fortnite are secondary drivers of platform loyalty, each influencing 3.1% of players to switch consoles if the titles were removed.
Nadella's Endgame: Spending $1.3 Million to Obtain a $69 Billion Asset
The Federal Trade Commission’s legal challenge against Microsoft’s $69 billion acquisition of Activision Blizzard faces significant hurdles due to a failure to account for the modern gaming landscape.
- The FTC’s challenge to Microsoft’s $69 billion acquisition of Activision Blizzard is hindered by a narrow market definition that overlooks the mobile sector, where the acquisition of King Digital would increase Microsoft’s market share from 0.3 percent to 3.8 percent.
- Regulatory arguments regarding the exclusivity of franchises like Call of Duty are challenged by evidence from Nintendo and Steam, which demonstrate that hardware and software ecosystems can remain competitive without such titles.
- Modern gaming’s shift toward free-to-play, live-service models creates long-term social environments that render traditional antitrust frameworks, designed for one-time consumption media like film, largely inapplicable.
Tencent Becomes Top Mobile Publisher by Consumer Spend Globally
The mobile market analytics firm data.ai has released its annual Top Publisher Awards, identifying the leading global mobile publishers based on consumer spending throughout 2022.
- Tencent maintained its position as the top global mobile publisher by consumer spend for the sixth consecutive year in 2022, driven by titles like Honor of Kings and mobile versions of PUBG and Call of Duty.
- ByteDance rose to the second position in global mobile publisher rankings, reflecting significant growth in consumer spending.
- Industry consolidation is actively reshaping the market, highlighted by Take-Two Interactive’s debut at number 15 following its acquisition of Zynga.
Sony’s Confidential PlayStation Secrets Just Spilled Because of a Sharpie
The inadvertent public disclosure of sensitive Sony Interactive Entertainment business data during the Federal Trade Commission’s legal challenge against Microsoft’s acquisition of Activision Blizzard has provided unprecedented insight into the financial mechanics of the modern gaming industry.
- Sony's confidential documents, unredacted due to a scanning error, revealed that "The Last of Us: Part II" and "Horizon Forbidden West" each cost over $200 million to develop.
- In 2021, approximately 1 million PlayStation users exclusively played "Call of Duty," while over 6 million spent more than 70% of their gaming time on the franchise.
- "Call of Duty" players spent an average of 116 hours per year on the game in 2021, with those dedicating over 70% of their time to it averaging 296 hours.
Who's Top of Steam Next Fest for June 2023?
Analysis of the June 2023 Steam Next Fest reveals a highly competitive landscape featuring approximately 1,000 PC game demos, representing over 6% of all unreleased titles tracked on the platform.
- The June 2023 Steam Next Fest featured approximately 1,000 demos, representing over 6% of all unreleased PC titles tracked on the platform.
- Core PC genres including colony sims, survival games, and roguelikes dominated the top-performing titles, with games like Viewfinder, Sea of Stars, Lies of P, and House Flipper 2 showing the strongest engagement.
- Diablo Immortal reached $500 million in cumulative mobile revenue, becoming the 15th fastest mobile title to achieve that milestone.
The Biggest Moment in Video Games
This analysis covers the mid-2023 landscape of the video game industry, centered on the high-stakes antitrust litigation regarding Microsoft’s proposed $70 billion acquisition of Activision Blizzard.
- Microsoft’s proposed $70 billion acquisition of Activision Blizzard became the central focus of mid-2023, triggering high-stakes antitrust litigation with the Federal Trade Commission in San Francisco.
- The gaming industry is undergoing a structural shift as traditional trade shows like E3 are phased out in favor of newer event formats such as the Summer Game Fest.
- Creative leaders, including Remedy Entertainment’s Sam Lake, are navigating the complexities of long-term project management and evolving storytelling standards for major titles like Alan Wake 2.
Saudi Arabia: Investments in Global Game Companies
Saudi Arabia is aggressively pursuing a strategy to diversify its oil-dependent economy by establishing a dominant presence in the global video game and esports sectors.
- Saudi Arabia’s Public Investment Fund has allocated $37.8 billion to the gaming sector, with $13 billion designated for M&A and $18 billion for minority stake acquisitions.
- The Savvy Games Group aims to establish a domestic gaming hub by 2030, targeting the creation of 250 companies, 39,000 jobs, and a 1% contribution to national GDP.
- Saudi Arabia invested nearly $8 billion over 18 months into major global publishers, including Nintendo, Capcom, Take-Two, Electronic Arts, Activision Blizzard, NCSoft, and Embracer Group.
FTC Files for TRO, Preliminary Injunction Against Microsoft-Activision Blizzard Deal
The Federal Trade Commission (FTC) initiated legal action in June 2023 to block Microsoft’s proposed $69 billion acquisition of Activision Blizzard.
- The Federal Trade Commission (FTC) has filed for a temporary restraining order and a preliminary injunction to block Microsoft’s proposed $69 billion acquisition of Activision Blizzard.
- The FTC’s legal action is intended to pause the merger while the agency conducts an administrative proceeding to determine if the deal violates U.S. antitrust law.
- The FTC’s internal administrative case regarding the acquisition is scheduled to continue on August 2.
Genshin Impact Developer miHoYo Generated More Profit in 2022 Than Activision Blizzard, EA, and Embracer
The financial performance of miHoYo, the developer behind the global hit Genshin Impact, highlights a significant shift in the gaming industry's profitability landscape.
- In 2022, miHoYo generated 16.145 billion yuan ($2.26 billion) in net income, surpassing the annual profits of major Western publishers including Activision Blizzard, Electronic Arts, and Embracer Group.
- miHoYo achieved 27.34 billion yuan ($3.83 billion) in total revenue during 2022, driven primarily by the sustained success of Genshin Impact and the launch of Honkai: Star Rail.
- Genshin Impact has reached over $4 billion in lifetime mobile revenue, serving as the primary financial engine for the company's high-margin operational model.
Overwatch League Forgives Delinquent Franchise Fees of All Teams
Activision Blizzard has eliminated all outstanding entry fees for the 20 franchises participating in the Overwatch League.
- Activision Blizzard has eliminated all outstanding franchise entry fees for all 20 Overwatch League teams across Europe, Asia, and North America.
- The decision to forgive these debts, which were estimated last year to total between $390 million and $420 million across the Overwatch League and Call of Duty League, is viewed as a move to clean up the company's balance sheet ahead of its acquisition by Microsoft.
- Publicly-traded esports company OverActive Media was the first to confirm an agreement to eliminate its outstanding fees, which also included a new sponsorship deal with the league.
Its games in the library
Halo: Combat EvolvedBungie · 200115
Call of DutyInfinity Ward · 2003563- Overwatch156
Call of Duty: Modern Warfare 3Sledgehammer Games · 20117
Halo 3Bungie · 20074- Call of Duty: Black Ops 625
- Call of Duty: Black Ops 715
- Halo: Campaign Evolved4
Grand Theft Auto VIRockstar North · 2026197
Call of Duty: Modern Warfare 2Infinity Ward · 20099