This is a write up from the latest “The daily upside” email. Interesting read and shows a lot of the gaming industry could be changing to become more subscription based. It highlights how the gaming industry is struggling since after the pandemic and having to compete more with the likes of Netflix and Amazon. 
Makes me wonder if more take over bids could be made especially now valuation of gaming companies have dropped. 
Not sure I’d go out and purchase shares in a gaming company on the basis they may get bought out but it does make me wonder if companies like Frontier Developments (LON:FDEV) could become a target. Still though, it’s an interesting read and thought I’d share it. 

Microsoft managed to get its whopping $69 billion acquisition of gaming studio Activision Blizzard, famous for franchises like Call of Duty and World of Warcraft, over the finish line. But what concerned antitrust regulators was the idea that the biggest deal in the history of video games could give Microsoft a big leg-up in the nascent cloud gaming market — streaming.

You might wonder why the video game industry would pursue streaming at all, especially after the financial woes it’s brought in Hollywood. Games are potentially even more expensive to make than some movies or TV shows, and more expensive for consumers, so what sane gaming company would trade that upfront sale for a monthly subscription?

The answer is that the gaming industry is headed for a financial crunch, and Microsoft and others have adopted a winner-take-all strategy.

Your Local Games Library

Subscriptions to game libraries are not new, but historically that meant access to a back catalog of nostalgic games, not the new hits. But in 2017, Microsoft changed the game.

At the time, Microsoft’s Xbox was being trounced in sales by Sony’s Playstation. In response, Microsoft introduced the Xbox Game Pass, which would not only allow access to a back catalog and new studio releases — like the hugely popular Halofranchise — but also make new games available the day they came out.

“This had never been done before in the high-end games market because of the challenging commercial implications of such a move,” Piers Harding-Rolls, a games industry analyst at Ampere Analysis, told The Daily Upside. “The financial strength of Microsoft has allowed it to pursue…

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