Microsoft Interested In Buying Electronic Arts?

A new piece at Polygon has floated rumors of the next potential major multi-billion dollar media deal in the wake of Disney’s acquisition of Fox. While there has been plenty of speculation about Apple potentially buying Netflix, their report is about one of Apple’s main rivals – Microsoft.

Their sources say ‘internal shifts’ at Microsoft, including the promotion of Xbox head Phil Spencer to Microsoft’s senior leadership team, has apparently created the necessary situation for an acquisition. Microsoft reportedly has a cash stockpile of at least $130 billion, boosted by recent tax cuts favoring large corporations.

That war chest could be used to purchase a big company with the site’s sources saying the enormous but widely derided Electronic Arts (valued at around $35 billion) could be up for purchase. Also on the list are Steam game service creators Valve Inc., and Korean company PUBG Corp. behind hit shooter “PlayerUnknown’s Battlegrounds”.

Part of what’s driving the issue is the failure of the Xbox One to the PlayStation 4 this console generation. Analysts indicate over 73 million PS4’s have been sold to date, more than double the 35 million Xbox One’s sold. The recently launched ‘Xbox One X’ sold well out of the gate but isn’t doing the kind of numbers that can close the gap – not until a price drop happens (and Microsoft is currently losing money on each of those consoles sold). Both consoles are also being outsold by the Nintendo Switch.

There’s an obvious reason for this though – exclusives. Sony and Nintendo have them, Microsoft don’t. In the next year or so PS4 is expected to serve up the AAA likes of “The Last of Us Part 2,” “Spider-Man,” God of War,” “Days Gone,” “Detroit: Become Human,” “Yakuza 6,” the “Shadow of the Colossus” remaster and possibly “Death Stranding” with those titles ONLY coming to PS4 and nowhere else.

In contrast, Xbox One has only three – “State of Decay 2,” “Crackdown 3” and “Sea of Thieves” with each of those (like all future Xbox games) also to be available on PC. The article’s analysts say Microsoft recognises this is a big issue and investing more in delivering first-party content is going to be a big thing for them. Additionally Microsoft CEO Satya Nadella is reportedly more enthusiastic about games and Xbox than his predecessor, Steve Ballmer.

The company reportedly had a great year in 2017, but that success was “nothing to do with the Xbox One” says one analyst and the company “needs to explain a strategy for how they can be relevant going forward in the game industry.”

Electronic Arts meanwhile is coming off a rough year. The loot boxes and microtransactions mess surrounding “Star Wars: Battlefront II,” and the company’s stated dislike of single player campaign games because they can’t monetise them like multiplayer titles, has not only resulted in a ton of bad PR but has shaken the foundations of those ancillary revenue streams as a player revolt against the tactic.

Their mishandling of the “Mass Effect,” “Mirror’s Edge” and “Dead Space” franchises in a way that has effectively killed them also did them no favours – leaving them with little more than sporting titles, “The Sims,” “Need for Speed” and “Battlefield” games. A lot is riding on their early 2019 title “Anthem” to deliver.