Microsoft Wants To Eat Nintendo. Here’s Why That’s Terrible For Gamers As Well As Society At Large.
Between Bethesda and Activision-Blizzard, Microsoft has been absorbing studios at a steady pace. While it’s certainly not alone, this consolidation is a dangerous trend for game players.
Hello, friends,
Last week, we talked about Project 2025, a deep-dive I’d encourage you to check out. This week, we’re turning back to the entertainment industry. We recently talked about Disney and WB ‘disappearing’ shows for tax write-offs, but now we’re going to look to the video game industry to explore Microsoft, Nintendo, Sony, and consolidation.
See, “I came across an article on Reddit” is a great way for research to fall into one’s lap in between mewling excursions of Baldur’s Gate 3.
The article I came across is by Muhammad Ali Bari of Twisted Voxel, and it’s a doozy.
But first! If you enjoy this article, make sure to subscribe! Also, a quick programming note: Next weekend is a vacation weekend, so I might have a shorter article out earlier in the week. The following week is a medical procedure, so there may be some missed articles. Just…Bear that in mind with kindness, please.
A History Of Nintendo Power Ending With Modern Powerlessness?
Bari’s article cites court documents (via a now-broken link? That’s weird) filed as part of an Federal Trade Commission inquiry into Microsoft. Apparently, Microsoft has had its eyes on acquiring Nintendo since at least 2020. Microsoft Gaming’s CEO, Phil Spencer, is apparently of the belief that Nintendo’s future lies with its intellectual property on a console it didn’t build.
As I’m drafting this article, I now realize I need to explain a little bit about Nintendo’s history, and that means I’m learning a little about it, too.
So, Nintendo started off making physical products like playing cards. No big deal, right? Apparently in the 1950’s they even had a deal with Disney? That’s neat! But by the end of the 1960’s that business was fading in the place of electronic toys and gadgets. So Nintendo adapted, right? It started making electronic toys. There were many on the market, and Nintendo fought pretty hard for its market share.
Many folks know of the Game And Watch thanks to the later hit series Smash Bros, but Game And Watch was a little hand-held thing similar to its later descendant, the Game Boy, just far more limited in its capabilities.
But the Nintendo Entertainment System? NES? It was certainly not the first home console, or even the first one with swappable game cartridges, but it was a huge hit and it brought the gaming world into the “8-bit era.” Its games also introduced us to a proverbial cast of characters: The Super Mario Brothers, Link and Zelda, Samus Aran, and many more.
Many of these characters are household names, today, and the one thing they have in common?
With few exceptions, they exist exclusively on Nintendo’s hardware.
Oh, sure, there’s computer emulation of semi-questionable legality. There’s also the occasional licensing (including the legendarily bad games licensed to the Philips CDI console) of characters to various other systems. By and large, however, if you want to play a Nintendo game, you need to play it on a Nintendo console, because it’s Nintendo’s intellectual property and game developers that make such engaging entertainment.
Now, Nintendo clearly has some of the world’s most well-renowned gaming intellectual properties. Its latest hit is its most recent installation of Legend Of Zelda, “Tears Of The Kingdom,” which appears to have sold at least 18.5 million copies. Consider that you’re selling these games at $60/pop and you clock in just over $1.1 billion, minus expenses of course.
Now: Consider that you can only play Tears Of The Kingdom on the Switch and you’re selling a console valued at - oh, prices fluctuate for different versions of the console, so let’s call it $300 - and you’re adding another $5.5 billion in revenue.
That’s no small chunk of change.
So what’s the problem, here?
Consoles tend to go through “Generations.” There was the 8-bit era, the 16-bit era, the 64-bit era, and many others. While Nintendo once produced some of the best hardware out there, today its consoles are not exactly the most powerful. Most recently, the release of the Mortal Kombat game “Mortal Kombat 1” (No, it is not the first Mortal Kombat, it’s a reboot - don’t ask) earned Nintendo something of a shameful mark on its Switch console, which apparently lacks the hardware power to run the game at its best graphical settings.
Basically put, Nintendo consoles in the most recent generations have simply lacked the power for stellar graphic or information processing that third-party developers require for producing satisfactory Switch versions of their games. That naturally discourages third-party developers from programming versions of their games for the Switch, since they know the only people rushing to buy the Switch version of a game are going to be people who only own a Switch.
So what’s this got to do with Microsoft?
Microsoft Is Hungry. Very Hungry. You Wouldn’t Like It When It’s Hungry.
Microsoft has been on a buying spree, absorbing studios left and right. In 2021 it bought the parent-company of Bethesda - the guys who produce games like Doom, The Elder Scrolls, Fallout, and the new Starfield - for a cool-cool $7.5 billion dollars. Once again, we aren’t talking about small chunks of change, here!
I mean, unless you compare it to its deal for Activision-Blizzard.
See, in 2022, Microsoft decided to buy Act-Blizz for a whopping $68.7 billion. No joke! That would give it control over games like World Of Warcraft, Diablo, Call Of Duty, and even Candy Crush. Now, that deal has been in regulatory hell for a little while, leading to FTC hearings which spawned the documents that Bari was referring to in the first place.
Now, Microsoft is unique in the gaming market as it sort of controls two gaming platforms: It produces the gaming console X-Box, but it also produces the Windows Operating System for personal computers (PCs), which is generally what gamers use for computing versus, say, an Apple Macintosh.
Now, the PC market is interesting because Microsoft doesn’t have exclusive control over what games are produced, published, and played on a PC. In fact, I’d say the leading gaming platform on the PC is Steam, by a company called Valve. Game designers can publish via Steam, and game players can pay for and download games on the platform. Virtually all of my gaming is done via Steam.
But some companies have different set-ups, eschewing Steam for their own downloading programs such as EA’s now-deceased (I think?) Origin. Even Microsoft has dabbled with computer game sales platforms, at least to a limited extent. Some smaller companies will just sell you the files to install a game on your computer, and it all just works on your PC.
PC is flexible, you see.
For consoles, this would be all but impossible. In essence, games programmed for a console only work on that console. You can’t take a Playstation 5 game and plug it into an X-Box, even if the X-Box does support that title, because they are coded differently. You generally can’t take a game some friend of yours programmed on their computer and install it on an X-Box, either, since X-Box has its own coding language.
(Editorial Update 9/23/2023: A game designer friend of mine told me I was a bit out of my depth, above. Apparently these days it’s much easier to program one version of your game that works on multiple consoles, with only minor tweaks needed here and there for compatibility reasons. I can barely program a Hello World in Python, let alone an entire game. I remain Human and fallible.)
So it’s easy to see why Microsoft would want Nintendo’s intellectual property: They simultaneously eliminate a major rival in the ever-ongoing “Console wars,” while at the same time gaining developers and, thus, games that could be sold through both the X-Box platform and the PC platform.
That’s sort of the fear that comes with watching Microsoft gobble up third-party developers like Act-Blizz and Bethesda. Third-party developers can choose which consoles they want to produce games for, or not produce games for, at their leisure. Once bought out, the working theory - although it isn’t universal - is that the developer is going to make games exclusively, or mostly-exclusively for their parent company. For example, the brand-spanking-new Starfield, by Bethesda, is only available on the X-Box and PC.
Now, before you think Microsoft is alone in being the “Bad guy” on this issue, its main competitor, Sony, has been buying stuff up for decades. The Playstation producer’s purchases include, but are far from limited to: Naughty Dog, Zipper Interactive, Sucker Punch Productions, Gaikai, Insomniac Games, and Bungie. That last one I mentioned, in 2022, really stung Microsoft as they were the developers of my first X-Box game recommendation, Halo. Microsoft still owns the Halo IP, but Bungie produces the popular game Destiny now, and…
Well, it’s drama of an entirely esoteric, relatively low-stakes type.
So What Does This Have To Do With Progressive Politics?
A long time ago, in a bedroom far, far dirtier than I’d care to admit, I made a video about “The Modern Monopoly.” One thrust of that critique of our society was that it was incredibly hard to tell who was behind what company, insofar as there are layers upon layers of megacorporate lithosphere to crack through before one can figure out who actually owns all of a given company.
In other words, this is about the integration of an essential, if relatively minor aspect of our society - entertainment.
Let’s be honest: We live in a fairly dark world. We need escapes from this world, as well as critiques of this world. The stories that video games tell are stories that shine light into the darkness.
As Tyrion Lannister once suggested, stories have power.
That’s why it’s somewhat disconcerting to see a trend of vertical integration take place within the video game industry. Oh, sure, it’s still possible for small studios to pull off unexpected, fantastic feats. Larian Studios, the producers of the mega-hit (and hopefully game-of-the-year) Baldur’s Gate 3, has only about 450 employees. Indie games like Minecraft and Rimworld spawned from the brains of very few people, even if they now have larger staffs as they’ve entered the public consciousness.
Even the consumption of one game studio by another is fairly benign. Oh, sure, when Activision bought Blizzard it bought some of the most successful PC intellectual properties out there, but that just meant that Activision had more tools in its toolbelt, and more things it could do to create games for any and all systems of its choosing.
With console producers purchasing developers all over the place, it’s no longer so simple.
I’m not saying this to excuse the horizontal consolidation that’s taken place as if it were a good thing, but the vertical integration slashes competition. If there are only two consoles (plus PC) available, there’s less incentive for them to keep prices low. If most titles are only available on one console or the other, then the consumers’ imperative is to have both consoles so you can own whatever games come out.
So What Answers Do We Have?
First off, Microsoft acquiring Nintendo is a long way out.
Nintendo might have the ‘weakest’ console, but it has some of the best game developers and IP’s to back up that weak console and make it such a strong platform. It’s generally kid-oriented, meaning parents buy the console for their kids and each new generation grows up on Mario, on Zelda, on Metroid, and on so many iconic properties that the original Smash Brothers spawned a genre of party fighting game all to itself.
After all, it’s fair to say that graphics quality does not dictate game quality.
Second off, the Federal Trade Commission is already looking at Microsoft warily. Sure, it’s buyout of Activision-Blizzard appears to be going through, but even if the U.S. regulators allowed them to buy out a console-making rival like Nintendo, there’s no guarantee foreign ones would. Regulatory hell is not a place either company wants to spend such a long time in.
Lastly, it’s worth noting that Nintendo might not believe that its destiny lies in being a Microsoft subsidiary - or any other subsidiary. It is an old company with a tremendous legacy. It has survived good times and bad. It has such name-recognition that at one point any video-game console was “a Nintendo.” If it wants to kick back and make its own video games - if it prides itself on its own work and style, as it always has - then Microsoft would have to try a hostile takeover.
Which I’m sure wouldn’t go over well.
There’s nothing keeping Nintendo from making a new console. There are rumors afloat suggesting that is exactly what is about to take place. While it might still not be the most powerful console on the market (or maybe it would be?), if it’s able to have enough consoles in stock for its launch that there’s none of the drips-and-drabs that Playstation 5 got especially famous for, they could swoop in and gobble up the gaming industry all over again.
After all, the Nintendo Wii had a weird name, weird controls, and it wasn’t all too powerful…And yet the Wii had both Sony and Microsoft struggling to copy its motion controls.
Nintendo’s destiny is fully in its own hands, and any future Microsoft (or otherwise) pull at gobbling up the company will be determined solely based on whether or not Nintendo is able to perform well at retaining core audiences, attracting new audiences, and remaining fun in spite of whatever brute computing force it lacks.
In Other News…
Starting on Monday, households will be eligible to receive free CoVID tests. Since respiratory-spread diseases tend to spike in the winter, it’s a good idea to pick them up.
President Biden appears headed to a UAW strike on Tuesday. That’s just amazing news, even if I have questions about how security can be provided.
A collection of authors, including Game Of Thrones’ creator George R.R. Martin (see, my Tyrion quote paid off!) has gotten together to sue Open AI (a partner of none other than Microsoft!) over the use of their literary works to train their flagship ChatGPT.
To my surprise, a small but hopefully-growing contingent of House Republicans are voicing a willingness to strike a deal with Democrats in order to get a spending bill passed to fund the government.
Our “weaponized” justice department just indicted Senator Bob Menendez and his wife on bribery charges. A Democratic Senator, mind you, demonstrating yet again how not-weaponized the DoJ really is.
We’ve talked before about the problems facing this country when it comes to treating chronic pain. According to the website Healio, about 54% of healthcare providers felt safe prescribing long-term opioid treatments in this legal environment.
Thank you for reading The Progressive Cafe. If this article has helped you, please consider signing up for our mailing list. This article is by Jesse Pohlman, a sci-fi/fantasy author from Long Island, New York, whose website you can check out here.