Video Gaming May Not Work For Legacy TV, Streaming Is Another Story

Are all those headlines about Microsoft buying video game producer Activision Blizzard ("Call of Duty" and "World of Warcraft") for $68.7 billion is in any way registering with legacy media?

Days before the two big gaming companies merged, Take-Two Interactive bought mobile game producer Zynga for $12.7 billion.

Media winds around video-gaming deals have been swirling for sometime. But why would TV and movie companies want to do a seemingly sideways synergy?

The answer: Follow the money, follow your consumers. Critics might add: But up to a point.

Late last year, Netflix dipped its toe in the water when it came to buying a small video-game studio, Night School Studio. It subsequently began to offer video-game content to its endemic streaming/subscription users.

But what about Disney, WarnerMedia, NBCUniversal? Where are they in this fight to maintain their current business consumers but looking to attract young media users in future?

We are not talking about synergy into any of their legacy business -- linear TV networks, for example -- but future digitally focused business like streaming.

That said, let’s go backwards a bit. Walt Disney and Warner Bros. have been in the video-game business, but with mixed results. Disney shut down its game development business in 2016, transitioning exclusively to a licensing model. WarnerMedia has had its Warner Bros. Interactive business for a while.

Now, much of video gaming lives in a console/desktop subscription sans advertising support. More than a few parties are still trying to figure out how to factor in advertising. (Mobile video gamers do much better in this area.)

All this exists in a market, where for the better part of the pandemic, video-game sales continued to soar in 2020/2021, save for December 2021.

Disney and Warner Bros.’ real interest in video-game production is in finding the connections to its still-growing intellectual property. For Microsoft, there is no mystery about its current move: It's supporting its popular Xbox console.

The difference for Disney and Warner is that the most popular video games are not coming from particular movie franchises or TV shows -- Marvel Universe (Disney) or DC Comics (Warner Bros. Interactive). For example, for 2021, Warner Bros. placed “Back 4 Blood” and “Mortal Kombat 11” in the top 20 of bestselling games -- 18th and 19th place, respectively -- according to The NPD Group.

This isn’t to say Disney NBC or WarnerMedia aren’t pursuing young entertainment consumers when they can. Both are accessing them from their respective action-adventure/fantasy characters via movies in theaters and TV.

But is that enough?

1 comment about "Video Gaming May Not Work For Legacy TV, Streaming Is Another Story".
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  1. Dan Ciccone from STACKED Entertainment, January 21, 2022 at 12:27 p.m.

    The Activision / Microsoft merger isn't necessarily about content.  There are many efficiencies each company gets through shared technologies.  Gaming engines are very complicated and take a ton of time to develop, but Microsoft has cloud services and distribution channels that are becoming increasingly more relevant for gaming.

    Point being - Netflix/Gaming vs. Microsft/Activision are two totally different plays. 

    Gaming is not a "build it and they will come" proposition.  The reality is that there are a handful of video games that drive the market and mobile is not only a different beast, but it's much more of a churn and burn with content.  Mobile and console should not be conflated.

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