Hardware Geeks

When giants battle, what happens to the people underfoot?  One might ponder the answer to that question as a showdown between game publishing titans EA and Activision seems unavoidable in the future.  As covered on this site, EA is currently attempting to add Take-Two Interactive, their main sports game rival and publisher of the popular GTA series, to its already large and prosperous fold.  At the same time, Activision is ironing out the final details in acquiring French company Vivendi Universal to the tune of $19 billion.  How did these two behemoths reach their positions at the top of the industry?  Read on for a bit of the past and some thoughts on what it all means.

For those who aren’t too familiar with the gaming world and its major players, here’s a little background on the two companies.  Electronic Arts (EA) was founded in 1982 and has built up a name for itself over the last quarter century primarily though its EA Sports brand, which runs the gamut from American football to the football recognized by the rest of the world.  Recently, EA has also seen great success with their Need for Speed street racing series and the now-ubiquitous The Sims.  Most recently, EA acquired the merged companies of Bioware and Pandemic, responsible for popular games such as Mass Effect and Full Spectrum Warrior, and is expecting another hit with the release of Spore later this year.

Activision was founded in 1979 and initially made a name for itself through action/adventure games like Pitfall and Zork before moving on to first-person shooters such as Quake II and the Castle Wolfenstein series in the 1990’s.  In the last decade, Activision has overseen the success of many of its franchises, such as the Tony Hawk games, the Call of Duty series, and a large number of movie tie-in games.  As of now, Activision is riding high on widespread sales of its popular Guitar Hero franchise (acquired from RedOctane in 2006) and 2007’s bestselling game of the year, Call of Duty 4.

Now, with EA attempting to buy out Take-Two and Activision completing their purchase of Vivendi, the playing field is growing ever-narrower.  Already the two companies are competing in some similar demographics - EA published RedOctane’s Rock Band last year, targeting the very same audience to which Guitar Hero caters.  They are also seeking to lock up the markets that the other has not fully explored - EA’s purchase of Take-Two will include 2K Sports, the publishers of most of the sports games that aren’t put out by EA.  Activision’s $19 billion spending spree will net them the now-nearly legendary Blizzard Studios, responsible for $1.2 billion in 2007 revenue from the Massively Multiplayer Online Role-Playing Game World of Warcraft alone and developers of the greatly anticipated Starcraft II.

Let’s take a step back and consider the ramifications of these power plays, yes?  When considered in a positive light, consolidation can be a good thing, as the resources that a juggernaut like EA or Activision can provide are almost infinitely beyond anything an independent developer studio could hope to obtain.  For example, the combined clout of Activision’s history and the establishment of the Guitar Hero franchise allowed Guitar Hero III to include rock celebrities and less covers than the first two installments.  Having everybody under the same umbrella also means that more games will likely be seen on multiple systems, eliminating the “exclusivity” that threatens to overstretch so many of our pocketbooks.  Case in point, EA recently announced that Bioware’s Mass Effect, previously thought to be an Xbox 360 exclusive, will also be coming to the PC, although much like Ubisoft’s Assassin’s Creed, it will probably require a rather hefty system to run at the highest graphical settings.  On the other hand, though, the road from the past, particularly in EA’s case, is littered with the corpses of companies that didn’t survive after being purchased.  EA appears to be attempting to avoid the mistakes that laid low early acquisitions such as Origin (the Ultima series), Bullfrog (Dungeon Master), and Westwood Studios (Command & Conquer), but there is no guarantee that things will all work out for the better.  Monopolization can also be detrimental to creativity and innovation in the industry - without the resources to compete, many independent studios may eventually find no recourse except to close their doors or accept a buyout offer from a larger company, and the two giants may find it difficult to balance a relatively hands-off approach to development while attempting to hold to a release schedule in the name of profit margins.  In the end, will we, the gamers, ultimately profit or lose out as a result of today’s deals?  Only time will tell.

If any of you out there have thoughts or comments, please feel free to share them here.  If you would like more information on EA or Activision, you can check out their websites from my earlier links or there’s always wikipedia for those who prefer possibly less revisionist histories. 

Post Tags: gaming  activision  ea  merger  take two interactive 

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