#218: Get the Papers

This industry update provides a comprehensive overview of major developments in the gaming sector as of July 2023. The primary focus is on the evolving regulatory landscape surrounding the Microsoft-Activision merger, alongside significant shifts in platform services, studio operations, and corporate financial performance. The coverage is global in scope, with particular emphasis on the United States and the United Kingdom.

Key regulatory developments include the Federal Trade Commission’s decision to drop its administrative challenge against the Microsoft-Activision acquisition, following pressure from U.S. lawmakers. Microsoft and Activision subsequently extended their merger deadline to October 18, 2023. In parallel, Sony finalized a ten-year agreement to maintain the Call of Duty franchise on PlayStation platforms. Meanwhile, Microsoft announced the retirement of Xbox Live Gold, replacing it with the Game Pass Core tier, and confirmed the departure of long-time executive Larry Hryb.

Financial and operational highlights include a 34% revenue increase for Activision Blizzard, driven by the success of Diablo IV, despite layoffs within its esports division. Conversely, Ubisoft reported a 9% year-over-year decline in net sales. Square Enix defended the performance of Final Fantasy XVI, citing high attach rates on the PlayStation 5. Additionally, the industry saw the emergence of new development models, such as the formation of North World, a studio leveraging Unreal Editor for Fortnite to build commercial titles. Finally, the UK trade body UKIE introduced new self-regulatory guidelines for loot boxes, mirroring historical efforts in Japan to preempt government intervention.