The console wars have been a part of the gaming industry for almost as long as gaming consoles have existed. The competition between Microsoft and Sony in the early 2000s led to a divide in gaming communities, with some choosing Xbox, some choosing PlayStation, and others in the middle. However, Microsoft has now admitted defeat in the console wars as it awaits approval for its acquisition of Activision Blizzard by the US Federal Trade Commission (FTC).
Microsoft’s Position in the Gaming Market
Microsoft has claimed third place in the imaginary console wars, admitting that it has consistently ranked behind Sony and Nintendo. Microsoft entered the gaming industry in 2001 with the launch of its first Xbox console, competing with established incumbents Sony and Nintendo. However, Sony and Nintendo outsold Xbox by a significant margin in that generation and continued to dominate in succeeding generations.
According to Microsoft’s analysis, Sony is the dominant player in the console wars and has led its consoles through five strong generations. On the other hand, Xbox had just 16% of console sales in 2021, well behind Nintendo and PlayStation. Microsoft has previously refused to state these figures, which reflect poorly on the company’s foray into the gaming market.
Acquisition of Activision Blizzard
Microsoft’s admission of defeat in the console wars is being used as evidence in the ongoing FTC investigation into its planned acquisition of Activision Blizzard. Microsoft is claiming that the acquisition will not provide it with an unfair advantage but will instead allow for a more equal footing in the market.
The acquisition will give Microsoft access to popular gaming franchises such as Call of Duty and World of Warcraft, which are currently exclusive to other consoles. The FTC is concerned that Microsoft will utilize console exclusivity to gain an advantage over its rivals.
FTC Investigation and Allegations
The FTC investigation into Microsoft’s acquisition of Activision Blizzard is ongoing, and it remains to be seen whether Microsoft’s admission of defeat in the console wars will sway the FTC’s allegations. Microsoft’s low player base and console sales justify its planned acquisition, but the FTC is concerned about the potential for anti-competitive behavior.
Microsoft’s acquisition of Activision Blizzard is part of a larger trend in the gaming industry, with major companies acquiring smaller studios to gain access to exclusive titles. The gaming industry is becoming increasingly consolidated, with a few major players dominating the market.
Microsoft’s admission of defeat in the console wars is a significant development in the ongoing FTC investigation into its planned acquisition of Activision Blizzard. Microsoft’s low player base and console sales justify the acquisition, but the FTC is concerned about the potential for anti-competitive behavior. The gaming industry is becoming increasingly consolidated, and major companies are acquiring smaller studios to gain access to exclusive titles.