The Axe Drops on Gaming’s Acquisitions Gold Rush

ign.com:

2023 is being touted as one of the greatest years in gaming. With major releases like Zelda: Tears of the Kingdom, Spider-Man 2, and Starfield coming from the big three publishers, plus plenty of third-party hits, there are more great games this year than we know what to do with. Meanwhile, there have been close to over 6,000 layoffs across the games industry in the same time, impacting companies like Bungie, Epic Games, and more. But the primary reason for the huge number of redundancies isn’t because of something that happened in the last 12 months, but a trend that’s steadily grown for the past two years.

In 2021 the biggest video game announcement wasn’t a new sequel or shiny new title, but instead Microsoft announcing its plans to acquire Activision Blizzard for $69 billion. Indeed, the biggest news stories from 2020 to 2022 were less about what games were coming out (if anything they were all being delayed) and more about which studio was the next to be bought. During the Covid years, mergers and acquisitions were the next big thing.

Take Embracer as an example. It made acquiring companies a big part of its brand, so much so it seemed like it acquired more studios than it released games. And for a time that strategy worked – Embracer might not be a household name but it certainly took an oversized share of headlines in 2022, first with meme-worthy acquisitions like THQ that led to people suddenly caring a lot about Destroy All Humans, before moving on to big fish like Tomb Raider developer Crystal Dynamics and Gearbox, the studio behind Borderlands. It also acquired the video game rights to The Lord of the Rings.

But ask any business analyst and they’ll say mergers and acquisitions (M&A) almost always lead to layoffs