Comments on: Why video game developer acquisitions scare me

Could video game developer acquisitions spell the end of good times for the gaming industry? Don Reisinger thinks that's a very real possibility.

[devindotcom]

You think this is the first time companies have bought each other? That's how business works, big guy. The weak are food for the strong, and innovation trickles UP, just like every other industry. Valve is the definition of this.

[Thranx]

well, yes an no. EA is a good example of where this is incorrect. It took years of critisicm of EA and their rinse and repeat game releases and lack of innovation before they were willing to put money in new IP and new ideas. It's not really been a blockbust success for them either. Mirrors Edge and Dead Space are new and fresh from a gameplay perspective, but they havn't made more money for EA than Madden 2009.

Acquisitions are a two edged sword. On one hand, they could save smaller companies feeling the heat in the current economy... but on the other hand, the larger entiries that gobble them up are large for a reason... it's all about the greenback, and the big company is going to go with the recipies that have worked to make cash before, not new and innovative or experimental.

Invariably, when game designers feel their creativity is being stomped upon, they leave and form new companies... which release 1 or 2 smash hits, get bought up, and then form a new company. That's the rinse-and-repeat formula of the game development industry and I don't see it changing anytime soon.

[akbisw]

Well darwinism would explain it, and i agree with devin that smalls are the food of the strongs. Well the thing is EA and Activision will not be around for long. They are gonna go out of market and new companies will arise, So cheer up and enjoy whatever comes out

[viper396]

"EA and Activision will not be around for long"....and you know that how? Got any proof, facts, or real evidence to back that asinine statement up or are you completely talking out of your rear end?

[docster87]

thanks to emulation, I still play atari 2600 and c64 games. They were fun then and I still find them fun. Did they look real? No, how could they with that level of technology... But they were fun, simple, and the replay ability was (and is) very high. Today's games look a lot more real, but for the most part after playing (and winning) a game over the course of a weekend, week, or month - well, it's over. No replay desire. Some break that with online action, and others like Civ 4 & SimCity 4 break it with their simulation abilities; but such games seem rare in today's landscape. Real innovation in games has become a lost art. Perhaps it is due to less companies, perhaps it is due to the need to compete with Hollywood, and perhaps with so much need to be super graphically less time and energy is spent to actually make games be games.

[sankoz]

Yes Don. I think you're the only one to be concerned about. That's just how business works. Hollywood still manages to make good movies, but their problem isn't just lack of creativity. It's the competition from the games industry, the home theater and online streaming.
And by the way, that's how it always worked in all industries. When things get cheap and you happen to have a lot of cash, you buy stuff. You're were in capitalism before and you're still in capitalism now.
End of innovation??? What are you talking about? If anything, it's now easier to publish games than it was before because of XBL and PSN.

[strangest1ofall]

The point he's making is that, given the gigantic economic downturn across the board for most commercial and industrial sectors around the world (main exception being security, chilling but off point) that the only surviving companies are the ones that are already huge (Activision Blizzard) and they are buying up all the little, close to failing companies. Whilst these small companies to possibly no fault of their own are failing, these larger companies are definitely threatening innovation in the video game industry by doing this.

Lack of variety = lack of innovation = lack of competiveness. It's competiveness that drives innovation in any industry and when competiveness is eliminated (like Microsoft does) this is called a monopoly and it results in substandard products that consumers are pretty much forced to endorse because it's the only choice they're given (do you have lots of fun going to a store and finding a PC that doesn't have Vista on it?). This is a form of authoritarianism. And hence why it is illegal in theory (not practice because clearly Microsoft has more money than any organization looking to charge them).

Capitalism is based on competition, not across the board buy outs (something Microsoft has faced countless lawsuits for). The closer we get to few companies controlling the industry, the further we get from any sort of great advancements in playability or new ideas because people will buy the only games available simply because there are no alternatives. And as long as this giant company is making record profits because we're all buying from them), it's going to continue to put out all the same garbage it always has put out. Why? Because there's no longer a driving force. Innovation is squashed with simple satisfactory Halo 5000.

Part of the reason for all the manufacturing industries failing is because of a lack of manufacturing demand, especially in North America. Why? For one, because China has the monopoly on manufacturing. Their products are produced hardcore cheaper than domestic ones because of drastically lower wages and lack of environmental safeguards (and other things that add to the consideration of the final price). Secondly, because North American industries have, instead of choosing to compete some way with China, opted out of competition entirely by maintaining their bloated manufacturing costs through the refusal to implement new technologies, by increasing wages (especially CEO wages, bonuses, etc), and by simply remaining uninnovative as if they are the cream of the crop or something.

Treat this analogous to the video game industry. You cannot compete against conglomerates (China) without being innovative. However, for a single (or few) company (China) to control all or most of the raw market for said industry (manufacturing), it becomes very hard for any other company, especially if it's small (or doesn't have a lot of money), to enter and be competitive in the industry. This or these companies (China) are now in control of and set the demands of said industry (they pull the strings). If you're production costs are too much, you wages are too high, your entire manufacturing operation is going to be outsourced to where it can meet those demands (China). And ultimately, what do you get? Poor practices that result in ******, poorly innovated products. Why? Because there's simply no other companies offering and whom can afford to compete with this one giant company (China).

It's nearly impossible for small companies to enter the market and compete successfully with giant companies. Capitalism is based on competition, not corporate take over. Giant corporations are given giant concessions by the giant federal government, giving them the benefit of much lower operating costs (relatively) than newer, smaller companies. And this is why it's so easy for Microsoft to buy out any company that threatens it with innovation. Innovation becomes tremendously slow paced in the monopoly situation (because of no competition... it's a vicious cycle eh). Don is completely spot on with this. Video games, like every other industry in the market today, are headed in a truly uninnovative (actually more like backwards) direction.

[Spartan_458]

Wait....EA acquired Ubisoft? I don't think so. I'm not sure if that's a typo or not, but that is most definitely NOT true.

[aztec92154]

With a major stake in the company (the largest of any one investor), yes EA "owns" Ubisoft. Google "Ubisoft EA hostile takeover". If they wanted more of Ubisoft, they could get it, check out their stock crash... it lost 80% of its value in the last year. The market, S&P lost about 50%, so they're very much in trouble of not having very much say in the company unless they start a buy back program.

[Grognard_The_Barbarian]

I, too, am generally opposed to aquisitions of developers by publishing houses, for the same reasons as Mr. Reisinger. One only has to look at the infamous aquisition pattern exhibited by EA to know it is a bad deal for the most part.

Case in point: EA aquired numerous studios, including Westwood, makers of the Command and Conquer franchise, and Black Box Entertainment, creators of the Skate and Need for Speed franchises, only to close them down and consolidate them into the in-house development teams.

Sure, you could argue that "this is the way the industry goes, get over it," but when is the last time you saw a truly great, innovative movie with real artistic value come from the womb of Universal Studios or MGM? By and large, movies of the past decade are made with the artistic expression of the Model T. Or worse, you get a self-indulgent piece of crap that can't see its own plotline through the murky writing and wants to remind everyone that "I was created by a deep, brooding artiste, can't you tell?" Or, you get a film like Juno, that tries hard to be "indie" despite being made by Fox, and makes you want to hurl everytime the main character speaks because they over-do it on the "indie"-ness of a faux-indie film.

Yeah, publisher-owned developers might be the path the industry will take, but that doesn't make it a good one, by any means.

[renGek]

I would not be too concern about that. For one thing, activision & blizzard have been doing a great job making quality software. Second, game developers are a special breed that pops a new batch of talent every few years. Good game developers will always be around.

People don't have loyalty to software development houses the way people are rabbid fans of hardware (think video cards, fanboys, canon vs. nikon etc.). So people will always willingly switch to a different game if its good. And with video games, there is always room for 2 or 3 or 4.

[bwvla]

Video game consolidation sucks.

No innovative idea to save us from endless WOW and SIMS will arrive if Activision and Electronic arts are the only companies left standing.

[-fjtorres-]

Actually, the big fish eating the little fish has limited value.
When the big publishers buy development houses, what exactly are they buying?
They buy IP and staff.
But the staff aren't slaves. They can and often do walk out the door.
Often to start their their own studio.
This kind of churn is actually good and you see a lot of it it Hollywood.
Creative people need to create and if they can't do it where they are, more often than not they find a place and a way to do it elsewhere.
Consolidation needn't be all bad; a well-run major publishing house can (and occasionally does) shelter development staff in ways that smaller operations can't by providing more resources, more leeway on schedule. How often does the review of an game from a smaller publisher (a Southpeak, a Midway, etc) end up with the game being labelled as wasted potential for having shipped unfinished, rushed...?
The simple reality is that major disk-based games are becoming to big, too complicated, too *expensive* to develop for the smaller studios to be able to bet the required investment on a single roll of the dice, whereas a bigger studio with multiple ongoing, staggered releases can afford to slip in a few riskier ventures in among the cash-cow releases.
The bottom line is the industry is changing, like it or not.
Entropy moves only one way.
Deal with it. :-)

[strangest1ofall]

When a video game developer does not have the option to seek out other companies because of a monopoly situation then yes, it pretty much is slavery. And these huge corporations actually declare the creative content they publish as their own property (just like the music corporations), not that of the video game developer. A given video game developer has no rights regarding his product, the copyright is mainly in the hands of the publisher (video game production company), whom defends the creative products of the artist but ultimately does not actually have to.

Just like in my previous posts, basically what Sony and Microsoft have done is pushed video gaming too far in the last round and made it impossible for small developers to actually become up and coming developers. They released (mainly Sony) technology that was and still is expensive and have refused to subsidize those added costs to developing for the developers. This is the classic monopoly situation. The hardware companies basically set the stage for this to happen and are now using the downturn as a choke hold move on those developers actually investing everything they have into putting out innovative products. The future of video gaming is garbage.

[strangest1ofall]

It's also why there are very few noteworthy Playstation 3 titles. Sure, they're coming, but it's already been years. And they're certainly not coming in droves either.

[sting7k]

Maybe if people stopped buying the same game EVERY year over and over (Madden and every sports franchise) these companies would get the message. But they just ram down our throats these games and for some reason people gobble them up. Is it really fun to play a game of a game? I don't even know the last time I bought a game from EA, most everything is just a bad cookie cutter re-hash of something that has been done 43 times already.

It's the gamers who need to wake up and demand more from these companies, stop buying their crap games and they will get the message.

[dreamhunk]

dude you worry too much pc gaming has an army of game devs.

[Heebee Jeebies]

Of course it is scary. Pretty soon there will be one or two mega game companies mass producing Wal-Mart quality poo! Typical and worst and most egregious of all is that consumers like the stupid little lemmings off a cliff that they are will flock to this like there is not tomorrow.

Robert

[Dr_Zinj]

There are a lot of small time film makers all over the northeast, the nation, and the world.

Their works are shown at regional film festivals, and sometimes at world-wide ones like Cannes.

Most of them are not cost effectve productions, but done as hobbies and labors of love.

The big film companies aren't preventing them from making their movies, just not allowing them to show them in their theaters. Which leaves regional film festivals for distribution to the home computer, VHS or DVD market.

Game companies are shutting out the little developers, they just aren't helping them any.

[Inconnux]

The only thing that scares me is that EA continues to infest their PC games with Securom... as long as they do that I will continue (as will many others) to boycott their products. Activition/blizzard does not infest their products and they have extra cash.. coincidence? I don't think so

[mattykaye]

Ok let me just make something clear. Firstly; no one has to merge with anyone, they choose to merge. Out of greed or selfishness these companies are accepting the swallowing efforts of the likes of EA & Activision but its not something new. This has been going on since the 80s. The likes of bullfrog being taken by EA games, and many others like them. The problem isn't the game titles; or through lack of trying. Its the CEOs and venture capitalists you need to reach.

[chavoc]

It isn't always a choice. You do not know how publically traded companies work.

[megustansalchichas]

are you kidding? do you know how business works? this will just motivate those kids starting out in game development to create fresh and interesting content and hope someday to sell their companies to the big 'video game studios' as your argument would have it. if the movie industry is an example, the indies would be fine and successful if they can come up with innovation that the big companies lack. Can you say Sundance? can you imagine a festival where the video game independents negotiate distribution deals for their creative IPs for a cut of the profit?
Unfortunately this is another article in the doom and gloom mode I've come to expect from you -if people all thought like this, the video game industry now wouldn't be bigger than the movie industry.

[eNcryptedGnome]

This is the way we see much of the business world work. It is a true and a actual fact of nature itself, "The strong either help or eat the weak". They usually end up eating the weak, whether it be litteraly or in large sums of cash. The weak usualy always become part of the strong.

However we are seeing a whole new face to the Video Gaming industry. Over the past decade we now have hot babes on hot cars at gaming expos... yes they are also dressed in really hot outfits. What does that have to do with a game anyway?

Of course we are going to see a "Hollywood effect" in an industry where unlimited creativity can be drafted out to a virtual environment. Instead of firemen and police men of yesterday, we have little Max Paynes, Laura Crofts and Master Chiefs. Because everyone wants to be on center stage. It is human nature alone that will make a small thing like video gaming once was, and explode it into a billion commercialized pieces amongst the masses.

I dont think this should be about the fine details. Anyone who has spent more than 5 minutes on this thread, understands where the gaming industry is going. It should be about the bigger picture. It's obviously going to happen, anyone who actually learns from history knows that. It's the people wasting their time reciting fine details that don't see the big picture.

Only as individuals can we change the way things function. Sometimes it takes many of us with one belief to form a common ground. Sometimes it takes one of us. Only you can change the way this industry works. You can drop your day job and go develop games yourself. You can donate to your favorite companies, you can only buy their products and no other competitors. It is a simple answer, but not even the average human would pursue it. To LAzy.