Why independent game devs add more value than ever in a world of global acquisitions

This week there was massive news in the game industry that made international headlines (with a purchase of almost $70bn, how could it not?). We’re of course talking about the announcement of Microsoft’s acquisition of Activision Blizzard – the biggest deal in our industry that will surely go down as a pivotal moment in gaming history.

There has been a flurry of acquisitions in recent years (Take-Two’s $12.8bn buyout of Zynga announced just last week and Microsoft acquired ZeniMax Media, the parent company of Bethesda, in 2020 for $8.7bn just to mention a couple). This latest—and biggest to date—announcement has effectively blown previous deals out of the water.

As we read the news in the TKG studio, it’s fair to say that our jaws collectively dropped. It’s not just the monetary value of the deal, it’s the exciting IP that Microsoft now owns and the 10,000 strong talented teams and studios dotted around the globe.

No matter your opinions on the acquisition, it is both an astounding and exciting one. But what does it mean for the games industry as a whole, for both the developers and the games themselves?

Rav Tharanee, Co-founder and Director here at TKG, answered:

“Well, signs are all indicating that the industry is in a consolidation phase and we can likely expect more acquisitions and mergers throughout the year – in fact, it will accelerate in 2022.”

This consolidation phase is leading to a polarisation between the larger players in the industry and the smaller independent studios, like us here at TKG.

Graham Watson, another of our Co-founders and Directors, commented:

“The news this week got us thinking that we’re possibly one of the largest studios that is still privately/independently owned, with over 70 Third Kinders in our ranks, and still plenty of growing to do!”

We can’t help but wonder how many studios like us there are at this stage, with the AAA pedigree that we are proud to have.

That said, each studio of course has its own goals and ambitions. In a world of global acquisitions it doesn’t necessarily mean that the roles of independent studios will change drastically in the short—or even longer—term.

There is something to be said for smaller, independent developers playing an even more meaningful role in being able to take chances on new and different types of games and projects, and helping drive innovation in the industry.

Smaller studios can and do help to support larger studios and titles too, in many ways and formats. TKG has supported Forza Horizon 4 in the past, and we’re currently working with our good friends at Mythical Games on Blankos Block Party, for example. Working together in this way is crucial as large and small studios alike are facing a shortage of talent, and games still need to be made and delivered into the hands of eager fans.

And on that note, watch this space…we have some very exciting announcements and news of our own in the coming months!