Xbox’s strategic acquisitions of major studios, including Bethesda and Activision, were initially celebrated as moves that would strengthen its exclusive lineup. However, as time has passed, the acquisitions have posed more challenges than triumphs. Disappointing releases from ZeniMax and an ongoing legal battle with the Federal Trade Commission over the Activision/Blizzard acquisition have raised concerns about Xbox’s ability to maintain exclusivity rights.
In 2021, Xbox made headlines with its monumental acquisition of ZeniMax Media, the parent company of renowned game studios such as Bethesda Game Studios, iD Software, and Arkane Studios. The announcement triggered debates about future exclusivity, leaving fans both excited and worried about the consolidation of the industry. The Xbox community eagerly anticipated titles like Skyrim and Fallout becoming exclusive to their platform, while others voiced concerns about the lack of multiplatform releases.
The release of games stemming from the ZeniMax acquisition, such as Hi-Fi Rush, and Redfall revealed a mixed bag of outcomes. Unfortunately, Redfall, a highly anticipated release from Arkane Studios, received criticism for technical issues and subpar game design, garnering a 56 Metacritic score. As attention now turns to Starfield, Bethesda’s massive RPG, its success becomes crucial in justifying the acquisition.
Despite an impressive showcase, certain aspects left fans concerned. For instance, the revelation that Starfield’s performance will be locked at 30 FPS disappointed those who expected the full potential of the powerful Xbox Series X console. Additionally, the news that only 10 percent of the game’s planets will have life raises questions about the overall experience. Xbox faces mounting pressure to deliver a significant win with Starfield. We are not sure what this means for the game, but it will surely frustrate fans going into the launch. Starfield’s success is still up in the air, but, one thing is for sure, Xbox needs a big win.
Xbox’s exclusive strategy is evident in these new IPs, but it remains uncertain whether established franchises like The Elder Scrolls will follow suit. Looking beyond Starfield, it is challenging to predict which ZeniMax games will remain exclusive to Xbox. The underwhelming performance of Redfall may serve as an incentive for considering multiplatform releases. The potential revenue generated from selling games like The Outer Worlds and The Elder Scrolls 6 at full price on other platforms may outweigh the benefits of exclusivity through Game Pass. However, decisions regarding these games, particularly The Elder Scrolls 6, which is still over five years away, are yet to be made. Overall, the ZeniMax acquisition has not yielded the anticipated benefits for Xbox, and its shortcomings are being used as arguments against the Activision/Blizzard acquisition.
Alongside ZeniMax, Xbox has also purchased Activision/Blizzard, or, at least, they are trying to. Xbox’s attempt to acquire Activision/Blizzard, which would give Xbox control of one of the biggest franchises in gaming: Call of Duty, has encountered legal challenges. The Federal Trade Commission blocked the proposed acquisition due to concerns about Xbox’s increased control over third-party assets, citing the ZeniMax deal as an example of potential harm to the competitive games industry. Since Starfield and Redfall and the upcoming Indiana Jones are exclusive to Xbox, what could stop big games like Call of Duty from being exclusive to Xbox as well? At least that’s how the argument goes.
On top of the trial being a huge headache for Xbox, it also revealed other negatives of the acquisition, such as the negotiation to raise the revenue share for Call of Duty. Activision CEO Bobby Kotick wanted Xbox to increase the revenue share or he would not put the franchise on Xbox consoles. Forcing their hand, Xbox agreed to raise the revenue share from the traditional 80/20 split to a 70/30 split. Essentially, Xbox will now be making less money off of Call of Duty than they expected. The Call of Duty drama continued when Spencer swore under oath he would bring the franchise to the PlayStation 5, undermining his decision to purchase the studio in the first place. Although it is unclear if the trial forced this decision, it is still unintended public information.
Moreover, the trial has been embarrassing for Xbox, as the team needs to prove they are at the bottom of the console rankings. The argument, therefore, illustrates they have not had control of the market and the acquisition won’t be enough to put them ahead. This results in blatant admissions of losing the console war and being way behind Nintendo and Sony. Normally, a business does not want to admit a third-place status, but Xbox’s hand was forced once again.
Phil Spencer has adeptly defended his case, successfully regaining some trust in the process. However, determining whether these acquisitions were ultimately worth the significant challenges they have presented remains a complex question. The outcome of the ongoing trial is uncertain, leaving Xbox’s future with Activision/Blizzard hanging in the balance. Regardless of the trial’s result, it is evident that the acquisitions have not yielded the immediate success initially anticipated by enthusiasts.
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Includes several titles.
Which was showcased at E3 2003.