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  • Writer's pictureRakshitha Govindaraju

Tech giants are betting their money on gaming studios - is it a good idea though?

Acquisitions and mergers have happened across industries. The goal of the acquisition could be business expansion, mitigating competition, or even wanting to take up a bigger chunk of the market share. Tech companies often identify opportunities in their initial booming stage and exploit innovation to generate large-scale revenue from it.

Of late, especially after the Pandemic, we have noticed tech companies eyeing gaming studios as a part of their business expansion strategy. But how big of a role can gaming studios play, in expanding the tech empires? Read on to find out.

The Chinese game developer, Tencent made news by acquiring Supercell, a game publisher that created the popular mobile game Clash of Clans, for a whopping value of $8.6 billion. It was also the highest ever someone had paid to acquire a gaming studio.

The record didn’t last long when Microsoft entered the game and bought Activision Blizzard for almost $69 billion in January 2022. You may know Activision Blizzard based on their series of Call of Duty games, Warcraft and Diablo. Shortly after, many tech companies began consolidating gaming hubs.

Sony, after acquiring Bungie for $3.6 billion, is set to revolutionize the PlayStation Studios by creating games for the Sony Interactive Entertainment division. Despite it not being in the same range as Microsoft, Bungie will be a game-changer for Sony’s brainchild God of War.

All of these brands like Sony, Tencent, and Microsoft are well-established tech companies/ game developers. That’s why it’s interesting to know what other businesses they see potential in, to expand their multi-billion dollar industry.

Did COVID play a role in this?

In the Pandemic struck, everyone assorts to things that helped them feel slightly at ease about the situation and gaming was on top of that list. People lived their fantasy lives in the gaming world yet some did it out of boredom. This was a major turning point for game developers.

Nielsen reported that the number of gaming engagements grew from 13 million to 31 million just between January 1st and March 28th of 2020, based on the readings by Twitch, a barometer used to measure video game engagement across all platforms.

During quarantine, the popularity of this activity only grew, because there were also reports of people using games to stabilize mental health and, by some means, stay connected with their friends in the gaming universe.

According to PwC’s Global Entertainment and Media Outlook 2022-26, the global gaming industry will be worth $321 billion by 2026, considering the rate at which it is growing. It goes without saying that with an increase in user engagement, there was also the need to develop better user experiences and include a wider range of options to enhance the gaming experience. In simple words, it meant more means to make money for creators and designers.

Plunging into the Metaverse!

We cannot talk about video games without bringing up NFTs and the Metaverse. This real-world extension is now gracing the video game industry, and this makes is the perfect opportunity for tech companies and gamers to meet mid-way.

The corporates will bring in the technology while designers will create a much more immersive experience for their audience. To achieve this, starts ups to big names in the tech industry are all desperately looking to invest in Metaverse, hoping for a healthy return on investment.

Earlier, as a game producer, there were two ways to make money. First, hardware like consoles, and screens, and second, the software or the game itself. As gaming evolved players had additional features that could be bought in the game, where microtransactions began to take place.

With Metaverse entering the picture comes a world of endless possibilities that enhance the gaming experience. Nobody can tell yet if Metaverse will unfold to be worth the hype or not, but theoretically, there are several business opportunities underlying the layers of technology the metaverse offers.

What does this mean for developers?

I know we’ve come far with this blog, and at this point, it might be important to address this bit. As a reader, you are either here because you are developing a game and want to know what’s up, or you’re here because you aren’t sure if diving into the Metaverse is the right plan for you.

Either way, it is always good to know and stay prepared, so you can take well-informed decisions in your developing journey. Plus, chance favors the prepared mind, right?

As a developer, do you find yourself thinking if it is wise to work under a major tech company since they seem to be taking over all the best gaming studios? It isn’t an easy choice.

So here we have prepared a set of pros and cons of working as an independent developer and under a corporate. Assess your priorities and make a decision that suits you best. Without wasting more time, let’s get right into it.

When you work for a company, you obviously have access to better resources. This could be in the form of software, equipment, and even educational material. Working under someone that is already well-established is always a great learning opportunity.

You also tend to meet people with similar mindsets and similar goals. This creates a hospitable hub for those looking to grow in the field and be a part of projects that have high investments and could possibly become super popular!

On the other hand, it could be a slightly unstable career path with relatively lesser pay. Considering how many people would kill to get a chance to be a part of a big company developing games, it is wise to remember you can be easily replaced.

There will always be someone who would do the same job for lesser money. There is also the risk of a game not creating the impact that was expected and it could lead to your project terminating along with your employment.

Some companies have been known to treat their developers like commodities and it is not uncommon to change jobs multiple times during your career progression.

As an independent developer, one of the biggest perks is that you needn’t adhere to deadlines and work purely out of passion to unleash your creativity and make mind-blowing games for fellow gamers.

On the other hand, you may not have access to high-end machinery for developing or fancy gadgets for testing. It’s you, your system and your space. And it is not going to be easy to compete with gaming companies with billions of dollars. So, this could get a bit tricky.

So to answer your question…

If you are a tech giant looking to bet on gaming studios, the timing might be perfect. Your resources and the expertise of the game developers will make the perfect formula to bring in those bills and establish a successful partnership.

If you are an indie game developer though, do not be intimidated by what seems like an orchestrated monopoly because the gaming market is big enough to fit all your innovations. And innovation will always be met with appreciation. So keep innovating!


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