Are Xbox and PlayStations Studio Purchases Making the Video Game Industry Too Small?

The two titans of the gaming industry, Xbox and PlayStation, dominate the gaming industry. Nintendo is close behind, but they both have something Nintendo doesn’t that could make the gaming industry too small – people are purchasing Studio purchases. What are Studio purchases?

The two created platforms they called Studio (original) to develop and publish video games for Microsoft Windows and Sony. Is this becoming a detriment to the rest of the gaming industry, making it too small?

Let’s explore.

What’s Xbox Studios?

Xbox Studios has 23 game development studios. It has produced some of the most iconic games – Halo Infinite, Minecraft Legends, Forza Motorsport – the list could go on.

Xbox’s acquisition spree of studios includes notable names such as Ninja Theory, Bethesda, and Arkane – you might recognize some of them. Microsoft also, rather ambitiously, attempted to acquire Activision Blizzard (part of Xbox Studios) and succeeded towards the end of 2023 for $69 billion. But Activision Blizzard is arguably one of the most recognizable gaming Studios – maybe that price was cheap.

What’s PlayStation Studios?

Not that it’s a competition or anything (it is), but Playstation only has 21 first-party game development Studios. PlayStation Studios is the same but different. You could call it an almost carbon copy – considering they share the same name. But to be fair to them – they have released some cracking games. Spider Man 2, the latest Spiderman game, is an example.

The graphics, map expansion, and gameplay are insane. According to PlayStation, the organization has ‘defined’ gaming for generations. And to be honest, it has. Their collective team spans the globe, including studios like Housemarque, Bungie, and Haven Studios. There are some really talented game developers.

Each Studio has a unique storytelling and game design philosophy – contributing to the rich and diverse gaming PlayStation gaming library. It’s definitely a powerhouse of exclusive content.

In 2022, PlayStation made a statement saying half of its first-party PlayStation Studio games will be on PC games and mobile by 2025 – that statement changed opinion on whether they’re making the wider gaming market too small.

The Broader Impact on the Gaming Industry

  1. Consolidation vs. Innovation: The aggressive acquisition strategy of Xbox and PlayStation is good and bad. While it promises a future of high-quality, platform-specific content, from retro games to new games, it also raises concerns about market consolidation. This trend could potentially stifle innovation by overshadowing independent studios and smaller players, who often rely on creative freedom and niche markets.
  2. The Indie and AA Renaissance: Amidst this backdrop of consolidation, the indie and AA (double-A) segments are creative and innovative. Studios and publishers like Annapurna Interactive and Devolver Digital are not just surviving. They’re thriving by forging their unique identities and experimenting with bold, unconventional gaming concepts. Subscription services and cloud gaming platforms are emerging – but they’re still nowhere near Xbox or PlayStation.
  3. PlayStations Promise: The reason why some people think PlayStation and Xbox Studios are making the gaming industry too small is because some games are limited to those studios. PlayStation promising to bring games to PC and mobile changes that. But still, both of them swamp the rest of the gaming world. And Sony could have been more generous than to only offer half.

The strategies of Xbox and PlayStation are sculpting a new era marked by exclusive content and strategic studio acquisitions – all you have to do is look at the library of games to see.

This trend does promise an ever-living future of rich and diverse gaming experiences. But there are challenges and opportunities. The industry must strike a harmonious balance between consolidation and innovation if the gaming industry wants to remain vast and dynamic – and some people think it’s shrinking.