In Criticism of Microsoft’s Acquisition Practices

2001, the year in which Grand Theft Auto III would release to critical acclaim and forge the way for open-world game design, doing so only a month after George W. Bush would be told by his Chief of Staff that, “a second plane hit the second tower.” An event so seismic that it would shape America’s identity for the coming decade(s), overshadowing any other event taking place that year; including a landmark antitrust law case between the U.S government and one of the country’s largest tech companies: Microsoft.

This was just a year after the company’s now former CEO, Steve Ballmer, would fly out to Japan to meet with the heads of Nintendo in the hopes that the makers of Mario would, like so many had previously, acquiesce to being bought out by the western tech giant in order to bolster the impending release of its first video game console, the Xbox. Thankfully, Nintendo laughed the soon-to-be Los Angeles Clippers owner out of the building.

Since its establishment on April 4th, 1975, Microsoft has been no stranger to the terms “merger” and “acquisition.” Ever since the company acquired its first business in the summer of 1986, Bill Gates and Co. have run rampant in gobbling up businesses to bring under their ever-spreading wing. From internet software developers like Hotmail to telecommunication companies like Skype, Microsoft have thus far acquired over 200 companies since its inception; fourteen of which were worth over a billion dollars.

It’s a number that I personally had to do a double-take on when reading, to the point where I thought it may have been a typo. Yet, a typo it certainly was not, and it seems no amount of lawsuits thrown against Microsoft for violating monopoly laws will quench its thirst for more acquisitions, which presently has been focused on the video game market.

Microsoft made its foray into the video game company acquisitions business notably at the turn of the century, bringing in the now Sony-owned developer, Bungie, to make a little game known as Halo; the crowning jewel for the Xbox. Almost every other year since then, Microsoft would make headlines by acquiring another video game studio, with their first north-of-a-billion dollar acquisition coming by the way of Minecraft developer Mojang in 2014.

The news made splashes across the gaming community, though little did we know that those waves would be that of a kiddy pool when compared to the news just six years later that the company was set to purchase ZeniMax Media for a whopping $8.1 billion; this after them already having bought notable studios in Obsidian Entertainment and Ninja Theory in 2018.

Yet, even that news would be overshadowed a mere two years later when it was announced that Microsoft would be buying Activision-Blizzard for the ungodly amount of $68.7 billion. A deal that got Microsoft, once again, into troubled waters with both the Federal Trade Commission and the UK’s Competition and Markets Authority with monopoly concerns, and one that has yet to fully complete as of writing.      

So here we stand, more than two decades since Ballmer was laughed out of Nintendo’s headquarters in Kyoto, and after billions of dollars have been spent on acquiring some of the greatest talents in the gaming industry. Yet, it seems Microsoft isn’t done with its hopes to acquire even more studios, with its eyes supposedly still set on Nintendo — clearly rejection is not something the company takes well.

In a recently leaked email from 2020 from current Head of Xbox, Phil Spencer, to a pair of Microsoft’s marketing executives in response to a question of why Xbox wasn’t targeting to acquire companies like Nintendo, he mentions that Nintendo is “THE prime asset” and that the acquisition would be “a career moment.” Spencer would also mention Valve, the makers of Half Life and game-distribution service Steam, as another potential candidate to bring under the Xbox brand.

One would think that, after seeing your company go through the tumultuous process of acquiring one of the biggest names in gaming, Activision-Blizzard, and seeing one of your triple-A titles Redfall—a game made by one of your recently acquired studios, Arkane—release to mediocre review scores, it may be time to stop and reflect. To focus on the actual products currently being worked on by your endless supply of studios. But alas, Microsoft wouldn’t be a trillion dollar company under the structures of capitalism if all they cared about was their actual products and services (or employees, for that matter).

Whether it’s underwhelming products like Redfall, or applications like Skype essentially being defunct in 2023, there seems to be a trend with what happens to the companies that Microsoft acquires. The output of products from them are never what they once were, or never materialize with the same quality. It’s a trend we’ve seen from other huge companies like E.A as well; devouring smaller company after smaller company, only to have them be dissolved a few years later with nothing of note to show from the acquisition.

It’s a tactic used not with the hopes to make great things for the consumer, but to annihilate competition and bolster one’s stock price. Beyond that, it has proved to be somewhat of a catalyst in creating a dearth in creativity when it comes to making content; Disney being a prime example with their continued deluge of lacklustre films and television shows after the myriad of acquisitions they themselves have acquired over the past couple decades. 

So to think of what might come of an acquisition of Nintendo by the likes of Microsoft is a truly frightening notion. Valve, being an American corporation whose primary asset is a distribution platform, is a little more understandable given how much Xbox has invested into Game Pass, which I can see being attached to Steam in an all-in-one service. It would be a monumental merger nonetheless, though one where I can already see the FTC smelling the word “monopoly” once again. What it would mean for a “Half Life 3” I’m not sure, but it’s not like there’s much hope for that game either way.

Nintendo, on the other hand, is a Japanese company whose strategy and mindset has always differed from its competitors. There couldn’t be a more opposing company, both in terms of its ideals and approach to game development, than Microsoft. However, Nintendo has always had the one thing Microsoft has struggled to consistently output, especially in the past two console generations: games.

Having titles like Zelda, Mario, Metroid, and Kirby dawn the green boxes of Xbox would be something Microsoft would rightfully foam at the mouth for. Irrespective of how wrong that makes me personally feel, the most frightening part isn’t having Link and Mario be Xbox properties—it’s what their futures will hold with a company like Microsoft.

These are properties that are not only intrinsically Nintendo, but Japanese. For as popular as these properties are globally, their impact on the culture and lives of the Japanese populace cannot be understated. So to think that their games would be made by the likes of Microsoft, a company so intrinsically American both in its ideals and practice, is a future I can’t help but be concerned by. This is not to say Nintendo is without its problems, far from it, but my hope is that they continue laughing at the faces of a Ballmer and a Spencer for the foreseeable future.