Xbox's Future Without Activision: What's Next?

I, like many others, was hoping the UK would approve Microsoft's acquisition of Activision Blizzard, not because I had a vested interest, but simply to put an end to the prolonged ordeal. The UK's regulatory body, the CMA, was always the most likely to block the deal, and now that it has, the biggest hurdle has been overcome, but the story is far from over. The past year has seen Microsoft and Sony engage in a war of words, with each side trading blows in the press and through legal documents. The most toxic members of their respective fan bases have latched onto every statement and accusation, using them as ammunition in the ongoing and tiresome console war. In my conversations with both Microsoft and Sony over the past 12 months, it's clear that they're both eager for this saga to end. This year promises to be significant for both consoles, but every discussion about upcoming games like Hi-Fi Rush, Redfall, or Starfield is overshadowed by the specter of the Activision Blizzard deal. Perhaps I'm exaggerating, but it's undeniable that this situation has been a drag on the industry. Microsoft will likely appeal the CMA's decision, but the odds have certainly shifted. The CMA isn't known for changing its mind, as evidenced by Microsoft's failed attempts to do so over the past three months. The more intriguing questions were always going to arise after the deal's outcome. If the acquisition had succeeded, how would Activision Blizzard be integrated into Microsoft's operations? Would Microsoft adopt a limited integration approach, or would it leverage Activision's development and marketing expertise? Xbox has a proven track record of launching games that showcase the latest technology, while Activision has a legacy of creating billion-dollar franchises with games that are released on time and within budget. A closer alignment between the two companies could have benefited both parties. However, with the deal currently blocked, the question on everyone's mind is: what's next for Xbox? This generation hasn't been particularly kind to Xbox, with the PS5 experiencing a surge in sales and the Xbox Series platforms heading in the opposite direction. The lack of a major Xbox exclusive in recent times has been notable, and the company's reliance on Game Pass has raised concerns about slowing growth. On the surface, Microsoft seems to have made all the right moves. The Series X console, the affordable Series S, and the quality of the Game Pass service all suggest that Microsoft has got its hardware and value proposition right. However, winning back market share requires more than just internal improvements – it also necessitates mistakes from the competitor. Unfortunately for Xbox, PlayStation hasn't provided many opportunities for Xbox to regain its footing. The biggest challenge for Xbox remains the games themselves. While it's unfair to say that the console has no games, the lack of system-shifting blockbusters is a significant concern. Halo: Infinite, despite being a great game, failed to meet expectations and struggled to maintain an audience. Xbox's next big hope lies with Starfield, a new IP from the creators of Fallout and Skyrim. The game has generated significant excitement, and if it delivers on its promise, it could drive attention towards Microsoft's consoles and Game Pass. However, it will face stiff competition from Sony's Spider-Man 2, which is being billed as one of PlayStation's first true next-gen games. The Activision Blizzard deal would have provided Xbox with the missing pieces it needs to compete, including IP like Diablo, Warcraft, and Call of Duty. Without it, Microsoft must consider alternative options, such as smaller, targeted acquisitions or waiting for its internal development teams to catch up. The fear, one that has been lingering since the first Xbox, is that Microsoft might lose interest in the gaming industry. Games are not its core business, and with the current focus on AI, it's possible that the company might decide to sell off its gaming division. While Microsoft has never indicated that it would abandon Xbox, the pressure is mounting. Xbox has the platforms, services, and technology, but it now needs to deliver on the most critical component: high-quality, blockbuster games.