Netflix-Ubisoft, Disney-Nintendo, The Nightmare Media Mergers That We Don’t Need

Consolidation is happening across the video game industry, with smaller publishers devouring smaller publishers almost on a monthly basis, and it can often feel like we’re headed toward a future where every video game is published by Microsoft, Sony, Nintendo, or Embracer Group.

But a new prediction suggests that consolidation may start to take a different shape. Bloomberg Lucas Shaw thought The next big merger will be between TV studios/services and game companies. As in, they will start buying into each other to offer greater synergy.

Here’s what Shaw has to say about the potential future of entertainment:

“A game company will buy a TV company or a TV company will buy a game company. Every big tech and media company is trying to sell bundled services. Apple is selling one. Amazon is selling one. Disney is trying to sell one. Kind of Microsoft is selling one. Music and video streaming are the main components of these bundles.” But, other than Microsoft, no one has really cracked the gaming element.

Meanwhile, entertainment companies are already experimenting with interactive storytelling and commissioning TV series and movies based on video games.

It seems inevitable that these two worlds will come close to each other. If Netflix or Disney can offer popular games as part of the service package, they can raise prices and reduce disruption. The same goes for Amazon and Apple, which have struggled so far in gaming. A gaming company can buy a TV company to take advantage of their IP address and bring their programming into the gaming world.”

The problem with this is that it misunderstands the market, and doesn’t seem to score fully Stream Put some players in the market.

One problem is that there is a limit to what a television or entertainment company can do if they buy a video game publisher. If the idea here is to sell “bundled services”, as with your Disney Plus subscription that gives you a bunch of EA games, we’re missing the key component here that it’s not like you received a bunch of game tiles on Disney Plus. Something like this should be entirely cloud-based, a technology that already exists, but is far from proven, and currently represents a small part of the industry. Microsoft has only invested so much in the cloud, and still relies heavily on downloading Game Pass titles directly to the PC or Xbox they make. Google Stadia has been completely folded after years of trying to break into the market and make game streaming mainstream.

The alternative is that you’ll have to talk about a completely different kind of video game, like what Netflix has started doing with its own original games that are meant to be played mostly on iPads or phones within the app. These may be “value added”, but they are by no means first-class titles.

We’ve already taken this road. For example, Disney used to publish a lot of video games until they mostly removed themselves from that market, and started licensing their IP addresses instead. That’s why we have Star Wars and Marvel games from dozens of different companies, with Disney eventually getting paid, but not the responsibility to develop and release the games themselves. So you can’t just say “Disney should buy a game publisher and put all the Star Wars and Marvel games on Disney Plus in one package.” It doesn’t work like that at all.

Conversely, the gaming company that buys a TV company overlooks one of the biggest players in the industry at the moment, Sony, which is the leader in the video game market with PlayStation and is also a huge studio for TV and movies. What is being suggested here is something Sony is already doing, making movies like Uncharted which are a huge box office hit, and licensing other titles like The Last of Us for what will undoubtedly be a huge HBO series. In this example, Sony doesn’t have its own “Sony Plus” streaming service, but it works well with its current strategy.

Nintendo is starting to play more in multimedia, but then again, there’s no reason why Nintendo should sell itself to some media giant or try to merge with one. They licensed Mario to Universal and this animated feature will make everyone a ton of cash. No integration required.

It might sound good in theory that you can bundle a bunch of TV shows and video games together on one subscription, but in practice, there are a lot of caveats to factor in. There’s really no underlying technology for this to work coherently, given how dependent it is on the cloud, since game streaming and video streaming are not the same thing. Conversely, I see no reason why gaming giants should start buying media brands when they can simply continue to license their characters to IP. If you are previously Exists in both worlds, like Sony, that’s great, but they’re the exception, not the rule here.

The most likely scenario is that tech giants buy both media companies and gaming companies. We’re already seeing this to some extent with Amazon, but I wouldn’t put it after Apple or the Meta to make a huge purchase in either category. I think everything is standardized to a certain extent, but not in the way that is being suggested here.

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