Ben Thompson goes on a 40 year deep dive of the video game industry then calls into question some of the FTC’s specific concerns with Microsoft’s acquisition of Activision Blizzard.
Microsoft is willing to cannibalize itself to build a new business model for video games, and it’s a business model that is pretty darn attractive for consumers. It’s also a business model that Activision wouldn’t pursue on its own, because it has its own profits to protect. Most importantly, though, it’s a business model that is anathema to Sony: making titles broadly available to consumers on a subscription basis is the exact opposite of the company’s exclusive strategy, which is all about locking consumers into Sony’s platform.
Here’s the thing: isn’t this a textbook example of competition? The FTC is seeking to preserve a model of competition that was last relevant in the PS2/Xbox generation, but that plane of competition has long since disappeared. The console market as it is today is one that is increasingly boring for consumers, precisely because Sony has won. What is compelling about Microsoft’s approach is that they are making a bet that offering consumers a better deal is the best way to break up Sony’s dominance, and this is somehow a bad thing?Ben Thompson
Consoles and Competition [stratechery.com]