It seems that things could have played out very differently today, if Microsoft made different decisions on which company to buy.
As reported by The Verge, documents in the FTC vs Microsoft case (now on appeal) reveal that Microsoft considered buying companies other than Activision Blizzard King. They included Sega, Hitman studio I|O Interactive, and most notably, Bungie.
Microsoft’s documents referred to Bungie as the “Owner of AAA franchises with an established ability to ship and scale games”, and stated that the “acquisition of Bungie will include securing valuable IP, Destiny (and its community) and integration of its dev & live ops infrastructure into Xbox Game Studios.”
Acquiring Bungie was genuinely enticing to the company, as they referred to hundreds of hours of Destiny played on their platforms. But Microsoft’s documents also indicated that they saw a high burn-rate risk for the studio. What that means, in plain English, is that they saw that Bungie was spending more money than they could make back.
Microsoft, of course, did buy Bungie all the way back in 2000, to secure Halo to be the signature launch title for the Xbox. In 2007, Bungie split from Microsoft, giving over ownership of Halo to Microsoft. They then signed a publishing deal with Activision for the Destiny franchise in 2010.
In 2019, Bungie ended their deal with Activision, to sign a new deal with Sony in 2022. And this is where we go back to earlier reporting. As we had pointed out before the weekend, Bungie’s current CEO Pete Parsons was already in a management position in Bungie from when they negotiated their exit with Microsoft. He was part of all this movement across different publishers.
And over the past week, Bungie’s former employees accused Pete of overselling Bungie to Sony. The claim is that Sony paid for too much when they spent $ 3.6 billion for the studio, because they didn’t have the capacity to deliver profits and performance at the scale that they had promised.
Microsoft spent far more on Activision Blizzard King, to the tune of $ 68.7 billion. But Microsoft’s investment seems to be paying off so far. While Activision Blizzard surprisingly had layoffs shortly after the deal was closed, their gaming division saw profits in recent quarters thanks to their investment.
An interesting detail here is that this document was dated a year after Sony announced plans to buy Bungie. Microsoft and Sony could have entered a bidding war for Bungie, and that could have raised the studio’s purchase price even more.
We won’t need to review where Bungie, Activision, Microsoft, and Sony are now, but it’s worth remembering that the story has not ended for all four companies, and things can change that abruptly for them in a few years as well.
