Amazon is rumored to be making an offer to buy EA, but it could be the start of a slippery slope towards monopolization of the industry.
While there are conflicting reports about EA’s purchase of Amazon, the very idea is a stark warning in the current spending frenzy at major publishers.
It seems that the sector is being dismembered and consolidated under the umbrella of large corporations. It started small when Microsoft started trying to compete with Sony’s back catalog by buying several smaller developers. While in 2018, the company’s acquisition of industry darlings like Ninja Theory, Double Fine and Obsidian Entertainment seemed like a series of monumental moves, it’s positively picturesque in the current climate.
Microsoft’s $7.5 billion purchase of Bethesda seemed out of scope; a shift in the market where previously unthinkable purchases were at stake. This was only confirmed when Microsoft dived deep into its pockets again to buy Activision Blizzard for $68.7 billion. Now, it looks like an open season with mega-corporations targeting bigger and bigger games.
Since then, we’ve seen Sony strike back by hiring Destiny 2 creator Bungie for a comparatively cheap $3.7 billion. Meanwhile, Embracer Group bought the western side of the development from Square Enix, taking Eidos and Crystal Dynamics for $300 million.
That’s the mood this news of EA potentially being bought by Amazon finds itself in. The dinner bell has rung, and it seems like everyone is here to try and get a slice of the gaming industry.
To me, this whole situation sucks. Whether Amazon, Microsoft, Sony or Tencent, industry consolidation is worrying. A future where a handful of the biggest companies on the planet own the entirety of the mainstream gaming market is bad, pretty much any way you cut it. It is restrictive to creativity – the variety of voices and the art that is made. It also opens the door to increased monetization.
In my opinion, this rampant spending is bad in every way, but some proposals are better than others. Microsoft’s attempt to buy Bethesda and Activision felt like almost the end of a console war and the beginning of something much bigger in scope. Now, however, we are entering the Infinity War of video game capitalism.
skin in game
And that gets to the heart of why any proposed takeover of EA by a megacorporation with no gaming investment — or in Amazon’s case, an uncertain one — is incredibly troubling. Xbox and PC games are a big part of Microsoft’s business. PlayStation is one of the technology brands, if not the most important, for Sony. These companies have an interest in the gaming industry doing well. While I don’t trust them to do well for gamers, they do have a skin in the game for the long-term health of the industry.
That cannot be said for companies like Amazon, Apple, Disney or others. Your business doesn’t live or die by your gaming ventures. Your interest is rooted in the fact that it is a booming market. Google Stadia is about to fall into obscurity, but it won’t break the tech company. Google might shut down Stadia tomorrow and be fine in the long run. If Microsoft’s gaming divisions collapsed, it would be a huge blow to the corporation.
Amazon already finds itself in a similar position to Google. The launch of Amazon Luna didn’t exactly set the world on fire. The service is still available, but it is far from a big player in video games and can easily fail.
That’s why Amazon’s impending purchase is far more worrisome than Microsoft’s acquisition of Activision Blizzard. It feels like an expensive flight of fancy rather than a central pillar of their business. What happens if the industry goes through a recession? Will Amazon really hold out when EA’s survival isn’t essential to its own success as an entity? Or are you going to shrug it off and disembowel the company and label it a failed venture?
a mass effect
As of 2021, EA has around 12,900 employees (via MacroTrends (opens in new tab)). If Amazon decides they’ve just tried it out, those jobs disappear. An enormous, probably unsustainable, amount of potential employees is thrown into the fray in the labor market. In fiscal year 2021, EA report (opens in new tab) revenue of US$ 5.6 billion. What happens to that money? Maybe go to other publishers, but a big part can easily evaporate from the industry.
As Twitter users devoted to one brand or another rage over who should buy Konami, Rockstar, Ubisoft — or whoever is left standing — there’s one important thing to remember: In the midst of it all are tens of thousands of jobs, all affected by uncertainty. While some benefit enormously from these acquisitions, most — especially those at the bottom of the totem pole — face more concerns.
It’s no secret that EA’s image is not popular with gamers, but a reality in which it closes its doors for good is much harsher and depressing. While many think of publishers as singular entities, they are largely a collection of talented and passionate people caught up in the pose of giants, used as currency at the whim of stock prices. Whether or not Amazon buys EA, this is a precarious time for the gaming industry. I would prefer the games were in the hands of independent publishers, but if we live in a world where megacorporations have to buy someone still independent, I would feel much better if the buyer were a company already deeply invested in the games industry.