It wasn’t going to last forever. The boom in gaming fueled by the pandemic is coming to an end, and companies in the spacing are feeling the effects. We’re no longer cooped up as much at home, and people are rediscovering other interests, like outdoor activities and travel.

Gaming giants Microsoft, Sony and Nintendo are seeing sales declines, which naturally is affecting profits.

The video game industry, like many others, will have more uncertainty for a while as we begin to see consumers settle into new habits.

Microsoft is doubling down on its huge gaming bet as it strikes a deal to acquire Activision Blizzard for $68.7 billion. CEO Satya Nadella explains that the will play a key role in the development of metaverse platforms at Microsoft. In other words, they’re not leaving this space to Meta/Facebook.

Microsoft gains iconic titles in the deal:

Microsoft is acquiring Activision, the troubled publisher of Call of Duty, World of Warcraft, and Diablo. The deal will value Activision at $68.7 billion, far in excess of the $26 billion Microsoft paid to acquire LinkedIn in 2016. It’s Microsoft’s biggest push into gaming, and the company says it will be the “third-largest gaming company by revenue, behind Tencent and Sony” once the deal closes.

Microsoft plans to add many of Activision’s games to Xbox Game Pass once the deal closes. With the acquisition of Activision, Microsoft will soon publish franchises like Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush. “Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog,” says Microsoft’s CEO of gaming Phil Spencer.

There have been tons of problems at Activision Blizzard regarding allegations of sexual harassment. Microsoft will have plenty to deal with through any transition. For gamers it will be interesting to see if this creative studio will thrive or wilt under the Microsoft umbrella. Nadella is an excellent CEO so their track record is improving.

So what would you do? Put up with all the stress and bullshit from complaining fans of your game, or would you sell like he did and become a billionaire?

Seems like an easy choice to me. Gamers can be obsessive, and that’s certainly with a popular game like Minecraft.

Cashing in seems like the obvious end game.

After a backlash that will rank as one of the most powerful ever seen in the world of video games, Microsoft recently made the surprising decision to back down on some of their more controversial Xbox One policies.

Specifically the Xbox One will now no longer restrict the sale and use of used games, and game buying and sharing will work largely as it has this previous generation, including maintaining the classic game use archetype of just sticking a disc in the console. They’ve also dropped the unpopular measure that would ask you to “check in” online once every 24 hours, regardless of if you’re actually playing online or not.

Considering the set the world on fire kind of hatred these and other Xbox One policies drew, you’d think this announcement would be met with a shower of rose petals and a loud and proud declaration from the Microsoft faithful, and gamers everywhere, that the console war is on once more.

Instead the reaction is more…interesting.

See it turns out that very vocal gaming group who spoke so adamantly against the Xbox One’s features, are now many of the same gamers who are taking to message boards on sites around the web, and are complaining about Microsoft’s lack of conviction, or how this still changes nothing for the more expensive console. The most interesting argument though, best vocalized by Gizmodo, comes from the once silent minority that now loudly argue that some of the same policies Microsoft was villainized for, were actually potentially great ideas.

To understand this sudden turnaround of emotion, you have to take into account the pride gamers have.

See, people don’t brag about what brand of microwave they own, nor does the maker of your Blu-Ray player incite many flame wars. But who makes your video game console? That does matter to people. People attach themselves to a system and react personally to any successes, or failures, endured along the way. The most vocal of which are described as fanboys, but really every gamer takes some sort of stance on the console they chose.

It’s a timeless tradition that may be occasionally entertaining, but is also very tiring. The fact is that if the average consumer could afford to buy all video game consoles, they would. That they can’t is a big reason that pride exists in the way it does.

The Xbox One changed things though. It gave people a villain. A black hated system that the average gamer could point to and say “That’s the bad guy!” Gaming has not really had something like that on the level of the Xbox One, and there was a certain comfort people took in decreeing the PS4 the champion of the people.

Now, it doesn’t matter that Microsoft listened to the complaints and gave people what they seemingly wanted, because all they did was test people’s pride, and force them to react in ways that don’t make them back down from the once so clear views of the console battlefield that existed not long ago. A large number of people not only invested their money in backing the PS4 early, but that pride as well.

The thing is this though. Sometimes, determining the villain is a matter of perspective. If Microsoft had truly believed that their policies would win people over in the end, no amount of heat would have forced them to abandon their beliefs, and they would have (albeit slowly) reaped the rewards of putting out a system they could stand behind and fully support. They would have ceased to be the villain, and would have become the battle tested hero…the only thing people love more than a golden boy.

If  that wasn’t the case though, then make no mistake that Microsoft made the smart business decision to change their policies. However, if they hoped that they would be carried on the shoulders of the populace all the way to the throne in doing so, they have underestimated the pride of gamers. What’s worse is that very pride now forces those same gamers to question if a company that can make such major changes to their system based on knee jerk impressions, has any pride of their own.

I’ve mentioned before that E3 is an archaic institution the video game industry continues to put too much stock in, and still stick to that.

However, this year it seems that every major developer and publisher was determined to re-kindle that old spark the event used to have, and across the board triumphantly accomplished just that with an E3 filled with the usual great game announcements, but bolstered by one time only events like Microsoft’s follow up to the “Xbox One” debacle, Nintendo’s rebellious direct service announcements, and of course the true reveal of the PS4.

Ultimately, like so many E3s, it would be the announcements of the “Big 3” that stole the show, and are still on the lips of gamers worldwide. Now that the presentations are done though, how did the world’s largest game companies fare at the most publicized video game event in the world? Well, let’s start with…

Microsoft

Microsoft had a lot of explaining to do after a reveal of the Xbox One that emphasized multimedia capabilities over gaming, as well as invoked the dreaded ideas of used game restrictions, and mandatory internet connectivity, that generally left a lot of people feeling pretty irate, and unsure of the future of the system.

While there were many ways to go about this, they made the somewhat interesting decision to go out on stage, drop a turd, hang a $499 price tag on it, and exit stage left.

It’s not that the presentation wasn’t better than the reveal, it certainly was, but even though they did things like focus on major gaming announcements over any media aspects, it seemed even the best announcements came with a catch. A good example is the return of “Killer Instinct,” in the form of a free title. While it should have been an untainted glorious moment of shock and hype, even that was watered down by the reveal that you can only play as one character on the outset, unless you paid into the game’s freemium model. As for major reveals and unique announcements, they were few and far between, and did little to excite.

More than any individual announcements though, it was the greater ideas that hindered Microsoft and the Xbox One. Try as they might they couldn’t escape the stench of bullshit that lingered well after every mention of used games restrictions, online connectivity, and even ideas which challenge the very notion of game ownership itself. As a result, there was a certain tension surrounding the proceedings that prevented even the most exciting announcements from drawing more than the odd applause here and there. It was uncomfortable to watch at its best, and embarrassing at its worst.

Yet I can’t give Microsoft failing marks. Like it or not, they have created a system that addresses issues in the industry from a business perspective, and even though they are horrible, dreadful, just plain awful ideas for consumers, they are at least original approaches to creating a system. But despite the fact no one can accuse Microsoft of playing it safe, there’s also no conceiving the argument that says they played it smart, or even intelligible.

Grade: C-

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