If there was ever one aspect of technology that has pushed the innovative boundaries at an always increasing rate, it is that of Video Games. Though we have seen our fair share of sequels and clones, there are always those gems that set the bar a little higher than the last wave of trend setters. You may agree that it is the competitive nature of the video game companies, be them indie or major, that brings the creative bests out of the developers. After all, it is only the top selling games that are able to recoup the losses occurred from the production costs. Small, hungry companies can't afford to release duds. But is being successful in today's day and age, considered a gift and a curse? How does it affect the video game industry when companies begin buying each other out and using unfair tactics to gain an advantage over their competitors?
Mergers of Video Game companies are nothing new. However, things get scary when it becomes a game of cat and mouse over dominance and market share. A couple of months ago, media company Vivendi, best known in the video game industry for World of Warcraft (under subsidiary, Blizzard), has begun taking steps towards acquiring Activision. Activision, whom was the first ever third-party game developer, is responsible for such franchises as Call of Duty, Guitar Hero, and the Tony Hawk series. Vivendi plans to merge Activision with its games division, and dub it Activision Blizzard. Individually, both companies have been quite successful, as last year saw record video game sales. Together, this merger would place Activision Blizzard at the number one spot, surpassing EA, in size. Lately, all eyes have been on EA, as a rebuttal has been certainly expected.
Video Game giant, EA is no stranger when it comes to acquisitions. In fact, they have often been criticized for buying smaller development studios primarily for their intellectual properties, and then running those companies into obscurity. Examples of such companies include Origin, Westwood Studios, and Bullfrog. More recently, EA has acquired game studios BioWare and Pandemic. BioWare is best known for it's Sci Fi oriented, action-adventure role playing game Mass Effect, while Pandemic has released the Star Wars: Battlefront series, as well as the shooter, Mercenaries: Playground of Destruction. It was perhaps, this movement that prompted Vivendi to up the ante and purchase Activision. Never to be out done, EA has made a 2 billion dollar bid for rival Take-Two Interactive.
Take-Two Interactive, publisher of the Grand Theft Auto series, has rejected EA's initial offerings, claiming that it undervalued the company. The offer comes at a peculiar time, as Take-Two's subsidiary, Rockstar, is putting the finishing touches on the highly anticipated Grand Theft Auto IV. There is speculation that EA is trying to capitalize on what is expected to be the top-selling game of 2008, while also obtaining Take-Two before their value becomes much higher. However, EA makes the argument that Take-Two is somewhat of a one-hit wonder, and a merger under the EA umbrella would be the smartest move to ensure a healthy pay-off for the shareholders in the long run. As is the trend with publicly owned companies, an offer can be denied by the board, however it is the shareholders that have the final say, thus possibly resulting in a takeover of a hostile nature.
Along with corporate takeovers, EA has been known to use other considerably underhanded tactics to ensure their dominance in the market place, while not taking into consideration what is best for the video game industry or its consumers. After Sega's line of NFL 2K titles (co-published by Take-Two) proved to be a threat to EA's flagship Madden series, EA responded by signing an exclusivity deal with the NFL, as well as a 15 year license agreement with ESPN. In other words, EA is the only company that can publish football games using official NFL teams, rosters, logos, etc. Well, at least College football is up for grabs, right? Nope, EA signed a 6-year licensing deal with the Collegiate Licensing Company (CLC), as well. This has forced companies to resort to releasing games such as All-Pro Football 2K8 and Blitz: The League, whom both consist of fictional leagues and former NFL veterans.
If the mergers of Vivendi and Activision, as well as EA and Take-Two, fall through, what will this mean for the video game industry? Essentially we will have two corporate giants that deem impossible to compete against. Will the few remaining third-party companies, such as Ubisoft, THQ, and Midway, be fearful of becoming too successful, only to get bought out by a bigger company? Does this mean that we will see fewer third party console-exclusive games? While some consumers may argue that console-exclusive games may force you to purchase multiple game consoles or risk missing out, those same exclusives ensure healthy competition amongst hardware manufacturers. Having multiple game systems to develop for, also pushes creativity and innovation amongst publishers. Is it only a matter of time before corporate greed leads the video game industry becomes as hated as the movie or record industries? Hopefully the consumer gets to make that decision.
Mergers of Video Game companies are nothing new. However, things get scary when it becomes a game of cat and mouse over dominance and market share. A couple of months ago, media company Vivendi, best known in the video game industry for World of Warcraft (under subsidiary, Blizzard), has begun taking steps towards acquiring Activision. Activision, whom was the first ever third-party game developer, is responsible for such franchises as Call of Duty, Guitar Hero, and the Tony Hawk series. Vivendi plans to merge Activision with its games division, and dub it Activision Blizzard. Individually, both companies have been quite successful, as last year saw record video game sales. Together, this merger would place Activision Blizzard at the number one spot, surpassing EA, in size. Lately, all eyes have been on EA, as a rebuttal has been certainly expected.
Video Game giant, EA is no stranger when it comes to acquisitions. In fact, they have often been criticized for buying smaller development studios primarily for their intellectual properties, and then running those companies into obscurity. Examples of such companies include Origin, Westwood Studios, and Bullfrog. More recently, EA has acquired game studios BioWare and Pandemic. BioWare is best known for it's Sci Fi oriented, action-adventure role playing game Mass Effect, while Pandemic has released the Star Wars: Battlefront series, as well as the shooter, Mercenaries: Playground of Destruction. It was perhaps, this movement that prompted Vivendi to up the ante and purchase Activision. Never to be out done, EA has made a 2 billion dollar bid for rival Take-Two Interactive.
Take-Two Interactive, publisher of the Grand Theft Auto series, has rejected EA's initial offerings, claiming that it undervalued the company. The offer comes at a peculiar time, as Take-Two's subsidiary, Rockstar, is putting the finishing touches on the highly anticipated Grand Theft Auto IV. There is speculation that EA is trying to capitalize on what is expected to be the top-selling game of 2008, while also obtaining Take-Two before their value becomes much higher. However, EA makes the argument that Take-Two is somewhat of a one-hit wonder, and a merger under the EA umbrella would be the smartest move to ensure a healthy pay-off for the shareholders in the long run. As is the trend with publicly owned companies, an offer can be denied by the board, however it is the shareholders that have the final say, thus possibly resulting in a takeover of a hostile nature.
Along with corporate takeovers, EA has been known to use other considerably underhanded tactics to ensure their dominance in the market place, while not taking into consideration what is best for the video game industry or its consumers. After Sega's line of NFL 2K titles (co-published by Take-Two) proved to be a threat to EA's flagship Madden series, EA responded by signing an exclusivity deal with the NFL, as well as a 15 year license agreement with ESPN. In other words, EA is the only company that can publish football games using official NFL teams, rosters, logos, etc. Well, at least College football is up for grabs, right? Nope, EA signed a 6-year licensing deal with the Collegiate Licensing Company (CLC), as well. This has forced companies to resort to releasing games such as All-Pro Football 2K8 and Blitz: The League, whom both consist of fictional leagues and former NFL veterans.
If the mergers of Vivendi and Activision, as well as EA and Take-Two, fall through, what will this mean for the video game industry? Essentially we will have two corporate giants that deem impossible to compete against. Will the few remaining third-party companies, such as Ubisoft, THQ, and Midway, be fearful of becoming too successful, only to get bought out by a bigger company? Does this mean that we will see fewer third party console-exclusive games? While some consumers may argue that console-exclusive games may force you to purchase multiple game consoles or risk missing out, those same exclusives ensure healthy competition amongst hardware manufacturers. Having multiple game systems to develop for, also pushes creativity and innovation amongst publishers. Is it only a matter of time before corporate greed leads the video game industry becomes as hated as the movie or record industries? Hopefully the consumer gets to make that decision.
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