Desperate Measures

Key insights

7 takeaways

01
Sony and Microsoft have submitted final responses to the UK's Competition and Markets Authority regarding the Activision Blizzard acquisition, with Sony arguing that Microsoft could intentionally introduce bugs or performance degradation into PlayStation versions of Call of Duty.
02
Microsoft is utilizing full-page newspaper advertisements to promote its claim that bringing Call of Duty to Nintendo and Nvidia platforms will reach 150 million new players, a figure derived from the 125 million existing Switch units and 25 million GeForce Now subscribers.
03
Warner Bros. is delaying the release of Rocksteady’s Suicide Squad game from May to later this year following negative fan reception to its gameplay reveal.
04
Square Enix outgoing president Yosuke Matsuda characterized Forspoken sales as lackluster and admitted that several small and mid-sized titles released in the past year underperformed expectations.
05
Meta is exploring the development of a subscription service for its Quest VR headsets to increase user engagement and address the high cost-to-value ratio of current VR software.
06
Take-Two Interactive has implemented staff layoffs at its Private Division indie publishing label, and the developer Lince Works, known for the Aragami series, is closing its doors due to unfavorable economic conditions.
07
The Playdate handheld console is increasing its price by $20 to offset manufacturing costs, coinciding with the launch of an on-device digital storefront called Catalog.

Summary

The gaming industry is currently witnessing a period of extreme, performative posturing as the proposed acquisition of Activision Blizzard by Microsoft nears its regulatory conclusion. The primary thesis suggests that both Microsoft and Sony have exhausted substantive legal arguments, leading to a reliance on increasingly desperate and illogical public relations tactics. This shift is characterized by a "spray-and-pray" approach to corporate communications, where both parties are prioritizing aggressive, often nonsensical, messaging to sway public and regulatory opinion.

Key findings highlight the escalating tension between the two tech giants. Microsoft has attempted to justify the acquisition by claiming it will bring Call of Duty to 150 million new players via Nintendo and Nvidia platforms, a figure criticized for ignoring significant overlap in existing hardware ownership and demographic limitations. Conversely, Sony has submitted arguments to the UK’s Competition and Markets Authority suggesting that Microsoft might intentionally sabotage the quality of Call of Duty on PlayStation consoles to damage Sony’s reputation. These filings are characterized as a departure from professional legal discourse, reflecting a "bottom of the barrel" strategy as the regulatory process reaches its final stages.

The scope of this analysis covers the global video game industry, specifically focusing on the high-stakes antitrust scrutiny surrounding the Microsoft-Activision Blizzard deal as of March 2023. Beyond the acquisition, the industry is experiencing broader volatility, evidenced by studio closures such as Lince Works, layoffs at Take-Two’s Private Division, and disappointing sales performance for titles like Forspoken. The analysis concludes that the current climate is defined by corporate desperation, with firms resorting to increasingly transparent and cringeworthy tactics to secure their market positions.