In the latest from the ongoing and seemingly never-ending saga of the potential Microsoft takeover of Activision Blizzard King, Xbox executives have stated their console has lost the sales war this generation. But what does that mean, and why would they readily admit defeat? Let’s take a look.
The “console wars” date back to the early 1990s when it was Nintendo vs. Sega with the video game culture war between the SNES and Sega Genesis. It carried over to the following generation, but that was its birthplace. Now, 30 years later, the term is still being thrown around, as Microsoft stated in their latest filing to the United States Federal Trade Commission:
“With every succeeding generation over the 20 years since, Sony, Nintendo, and Xbox have remained the three major console producers, and have been engaged in what the industry refers to as the ‘console wars.'”
It’s no secret that the PlayStation 2 is the best-selling console (home or handheld) of all time worldwide. The early 2000s was dominated by Sony and left consoles like Sega Dreamcast in the graveyard from the get-go. But Xbox has needed to play from behind from day one, attempting to burst through the walls of the much longer-tenured and experienced competition.
So why do I say all this? Because Microsoft and Xbox have had a heck of a time getting the $68.7 billion acquisition of Activision Blizzard King past regulators, mainly in the U.S. and the U.K., Many of those hurdles seem to be leaning back in their favour. Still, in a way, Microsoft is using their console sales numbers to show that its purchase won’t be a monopoly for the gaming industry. That remains to be seen, but playing the victim is a tactic and may or may not work with regulators.
“In 2021, Xbox had a share of 16% while Nintendo and PlayStation had shares of [redacted] and [redacted], respectively. Likewise for console revenues… Xbox trails with 21% while PlayStation and Nintendo have shares of [redacted] and [redacted], respectively.”
Sure, Microsoft is flush with cash and selling a few million consoles less than their competitors probably won’t sink Phil Spencer and Xbox. But do remember, they have said for the last several years that their goal is to get people on their platform, not necessarily on their hardware. Game Pass on PC and Xbox continues to be a great deal, even though a price hike is coming.
Thursday (June 22nd) was just the first day in front of the FTC, so it’s too early to know how things will shake out. Right now, the deal to purchase Activision Blizzard King is under a tight July 18th deadline which may or may not be extended.
