Are developer mergers good for the video game industry?

Don Reisinger can't stand video game mergers and acquisitions and is sick and tired of derivative gameplay. Are his concerns well-founded?

Over the past decade, video game popularity has grown at an exponential rate. Instead of being the niche market that only a select few cared about, the industry is now worth billions of dollars and has become mainstream.

But as that has happened, video game developers like EA and Take-Two Interactive have become far more business-savvy and done their part in ensuring that they can maximize shareholder value and create an environment where video games are an extremely profitable product.

In the process, the video game industry has been damaged by a slew of mergers and acquisitions and in the process, some of the most profitable genres (first-person shooters and sports games, for example) have been copied and refreshed so many times over that gaming has quickly become derivative and bereft of innovation.

And although the main culprit for the lack of innovation is obviously the Almighty Dollar, another culprit is lurking in the shadows and quietly damaging the foundation of gaming as we know it--acquisitions.

Just this past week, Electronic Arts announced that it has offered $2 billion to Take-Two Interactive to acquire the software developer in an attempt to solidify its position as the world's largest third-party video game developer.

Of course, this was almost surely a response to the deal reached between Vivendi and Activision worth about $18.9 billion and although Take-Two originally declined the offer, EA has already stated that it would attempt "other means" of getting the deal done and Take-Two has said that it will discuss an acquisition after April 30--one day after the release of GTA IV.

Obviously worried by the deal, Ubisoft was mentioned in a Thomson Financial Report where the firm contended that the developer may try to bolster its defenses and acquire licenses of popular video game franchises instead of acquiring developers outright.

And while that may sound fine and dandy for those who are looking for competition in the marketplace, let's not forget that EA owns a portion of Ubisoft, which further complicates the issue of mergers in the video game business.

When it's all said and done, consumers are the party that lose in this circumstance. Mergers and acquisitions may prove to be an important business tool for developers who are looking to get out of the business or are trying to become more powerful, but how does it really help us?

It doesn't.

A quick trek over to your local Gamestop will tell you everything you ever wanted to know about the state of the video game industry. Aside from a few innovative titles, the vast majority of games on store shelves are derivative, sports games, or sequels. Why? Simple really--these titles make the most cash for developers, so they continually release junker after junker to increase the bottom line.

Now, it should be noted that not all games that fall within those categories are crappy. Madden tends to improve each year and most people have enjoyed each iteration of Mario's adventures with Peach. On top of that, titles like Spore will be coming out later this year that will surely push the envelope of gaming, but by and large, the release calendar is filled with titles that are designed to be sold to suckers.

Is it just me or were there better games released years ago? Sure, there are still some games today that are worth checking out and others that I really like, but it seems that years ago, innovation and fun was the single most important element of gaming and derivative gameplay only started when the consolidation of the video game industry became the most common practice among companies.

The video game industry is currently run by a group of companies that have lost sight of what we really want as gamers--innovation--and embraced an ideal that has created an environment that's surrounded by copycats and sequels.

And unfortunately, it doesn't look like there will be any end in sight.

 

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