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Google to purchase Valve?

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Microsoft’s purchase of Zenimax signaled the start of a content creator arms race that’s been quietly building for years. How do you think the major players in the industry will respond?

If you have been paying attention, Microsoft’s goals are clear. They want to be the Netflix of video games. This is in line with Microsoft’s company strategy as a whole. They have been pivoting their software into services for years. Remember how Windows 10 was free? Who here has an Office 365 account? Azure services power almost everything AWS doesn’t. They want an Xbox live/Gamepass/Xcloud subscription to become ubiquitous, like your cell phone bill. Just as HBO, Netflix or Disney, they realize the best way to get people into their ecosystem is through exclusive content that is available across any platform.

I should start by saying that I am looking 10+ years down the road and I fully expect the PS5 to outsell the XSX this generation.

I believe Microsoft no longer sees Sony or Nintendo as their competitors. Those companies simply do not have the infrastructure or deep pockets to take videogame content delivery where it’s going. Sony did announce they will be using Azure for their streaming solution, but I don’t see that service making it to the finish line. They don’t seem to have the software development horsepower required. If Sony and Nintendo aren’t competitors, what are they? At best, you may see Sony or Nintendo tiered subscriptions available THROUGH services like Gamepass (not unlike EA access). Maybe Sony just sells off its studios, maybe Nintendo goes the way of Sega and turns into a publisher/developer for hire. I am not sure if videogame hardware is in either of their futures.

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So who are the major players? The answer is the only companies with a cloud infrastructure that can support game streaming on a global scale. The list is short: Amazon, Microsoft and Google, in that order. Google is making more moves than Amazon. While Stadia may not be a compelling product in its current state, they are actively making forward progress on the technology side. I don’t have anything good to say about Amazon Luna, their store selection is limited and they do not offer any exclusive content. It appears to be a late to market “me too” solution. Stadia and Luna are faced with the same problem. Gamers don’t want to leave their library behind. They are also collectors and want all their shit in one nicely organize spot. Pulling people out of their ecosystem, away from the library of games they have spent thousands of dollars on is a big ask. But what if you didn’t have to?

The next big industry bombshell: Google (or Amazon) buys Valve (or Epic). You still keep the Stadia subscription service with all the free games AND you also get your entire Steam library available to stream. I also wouldn’t be surprised to start seeing more large publishers like Ubisoft or Take2 get snatched up by Amazon or Google. I do not think this is anything we will see soon. Stadia and Luna (or cloud gaming for that matter) aren’t in a position to leverage the acquisition yet. Microsoft sees the writing on the wall and is trying to get everyone tied in first. It will take something big to beat where they are headed.

What do you think the next big move will be? How does Sony stay relevant after gaming transitions to a streaming/subscription model?

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