The gaming press, the Internet, and even the business media have been buzzing over Microsoft’s splashy announcement that they are spending nearly $70 billion to purchase Activision Blizzard. A lot of the discussion has focused on how this will play into Microsoft competing in the traditional AAA market and even the mobile market, where Activision subsidiary King has some very profitable titles. As far as I can tell, however, nobody is looking at the most reasonable explanation for the purchase and especially the timing of the announcement. Nobody is looking at the 6,000 pre-order gorilla that’s about to break down the gaming industry’s door and change gaming and, if we’re being honest, American culture, forever.
On Friday January 14th Intellivision posted a statement of facts that demolished all the criticisms about its hotly anticipated new game console and made it very clear that they are a serious player in the games space and they didn’t come to take prisoners. The following Tuesday Microsoft announces the purchase of Activision for $68 billion. Somehow the press, even the ‘responsible’ mainstream business press, has so far failed to draw the obvious line from point A to point B. Can I prove that Microsoft CEO of gaming Phil Spencer saw the Amico statement on Friday afternoon, called Microsoft CEO Satya Nadella and begged for access to Microsoft’s considerable war chest to make a Hail Mary pass to save the struggling Xbox division? And that Spencer then called Bobby Kotick on Monday in a blind panic to toss him a $68 billion life preserver in the hope that two sinking ships could somehow pull each other up out of the ocean’s embrace? No. I can’t prove it. But that’s the way Occam’s razor cuts here.
Everyone is focused on the biggest core games involved in this blockbuster deal. Call of Duty. World of Warcraft. Overwatch. But Microsoft already has a lot of games like that. Halo. Elder Scrolls Online. Gears of War. Microsoft doesn’t need Activision to give it shooters and Western RPGs. What Microsoft doesn’t have, but Activision does, is games from the simpler time that gaming will inevitably return to once the 3D and online fads have run their little course. Games like Pitfall and Frostbite. Games that everyone can understand and play. Starcraft is so complicated that only the most dedicated gamers can make heads or tails of it, but do you know what anyone can grasp after a few minutes? Fishing Derby. The really valuable part of the portfolio is not the flashy stuff but the bedrock games of the past that are poised to make a huge comeback, especially after Amico takes the market by storm and disrupts Xbox’s whole business model.
Phil Spencer is a smart guy. He knows that people are getting bored of playing variations of the same FPS games and open world bore fests painted over with slightly newer graphics and a rehashed map. He knows that what today’s kids really want are the games that their weird, childless, uncles vaguely remember playing at a friend’s house 40 years ago, like Astrosmash and Dynablaster. The endless virtual expanses and creative building of Minecraft is far too open ended for young people growing up in a scary and changing world. What children are really into is a video game version of Farkle, a dice game so old fashioned and obscure that nobody knows how it originated in the 1980s or, more importantly, why.
Microsoft put on a brave face by announcing 25 million subscribers to Game Pass in its big Activision purchase announcement. They wanted to reframe the bad news that growth has dramatically slowed this early and pretend it’s a win. There are 3 billion gamers in the world. Xbox’s offerings appeal to less than 1% of them. That's the market Intellivision is looking to corner, and Farkle will charm them all.
Amico has already proven to have a unique appeal in the gaming space. When a piece of electronics is popular and desirable people say that retailers can’t keep it on the shelves. With Amico, retailers can’t even get it to those shelves in the first place. Amico had thousands of pre-orders over 2 years before it was released. Do you know how many pre-orders Xbox, PlayStation, and Switch had combined 2 years prior to their releases? 0. Not a good look for the companies that claim to be the major players in gaming. Amico has sold and shipped tens of thousands of physical games without a release date for the console itself. None of the other companies even tried. That’s how far ahead Amico is.
Amico’s statement of facts and announcement that they were going to make an announcement of the console’s fourth scheduled release date clearly sent shockwaves through the $2 trillion behemoth that is Microsoft. They saw the writing on the wall, the universal appeal of simpler, easier, games, and they panicked to the tune of a year’s worth of GDP from Myanmar, a country of over 50 million people. That’s a whole lot of panic over Shark Shark! But it makes sense. Microsoft doesn’t have the old, long forgotten, properties to revive and do battle with Amico’s big guns, like Biplanes, a game whose reference to a long abandoned and obsolete technology perfectly fits into Amico’s philosophy. At least it didn’t until the Activision purchase, bringing along a host of older properties not just vaguely remembered but beloved by weird uncles throughout the western world.
Will it work? I don’t think so. Amico’s games have been in development for years, honing everything to a perfect level of polish prior to the big release, which will likely be before the Activision purchase closes in 2023. The names are less familiar, which makes them more intriguing. You can’t fight Astrosmash with River Raid and Megamania. You can’t take on Shark Shark! With Seaquest. You certainly can’t fight Intellivision Skiing with Activision Skiing. Or Slalom by Rare. Microsoft also owns Slalom. It won’t help them though. You can’t win a war fighting on the defensive, and that’s what the panic buying of Activision is. Microsoft armed itself for the wrong conflict. Its expensive studios and 3D online fad franchises are the Maginot Line of gaming. And Intellivision? The company relying on German grant money to finance much of its game development? I think we know who they are in this scenario.