MSFT + EA? (Premium)

According to a rumor, Microsoft might try to purchase video game giant Electronic Arts (EA). This is an excellent idea.

As you may know, Microsoft has two problems in the video game space today.

One is very real: Its current-generation video game console is being outsold by at least 2-to-1 by the market leader, Sony's PlayStation 4.

But the other, which feeds into the first, is perception: In the curiously traditional---Luddite-like, really---world of video game fans, Microsoft is continually lambasted for not doing things as they've been done for decades.

Those fans are wrong, of course. Dead wrong.

As I noted many times, Microsoft's video game strategy is "audacious" in part because it breaks from the norms of the past. Just look at all the amazing benefits of being part of the Xbox ecosystem. And with new Microsoft Studio games---including, yes, Halo---hitting Xbox Game Pass on day one moving forward, this equation has tilted even more in favor of Xbox.

But the complaints pour in. Xbox doesn't have any "true" exclusives, they say, in part because Xbox exclusives often work on both consoles and Windows 10 PCs. Xbox doesn't have as many AAA games as Sony does, which is incorrect based on actual sales data, they whine. On and on it goes.

Buying EA would not address the first of those two complaints, of course. EA's games are cross-platform, and no matter where they end up, it's inconceivable that they would be taken away from Sony or Nintendo consoles. That market is just too big, and too central to EA's success.

But buying EA would solve the perception problem, generally. And it would very much solve any complaints about Microsoft not having enough AAA titles. The EA stable is full of such games, and many have turned into successful franchises. I'm thinking Star Wars: Battlefront, Madden, FIFA, Need for Speed, NBA Live, Battlefield, Mass Effect, Titanfall, and many more. Are you kidding me?

Better, EA, like some other top-tier video game makers, has its own online services for selling and providing subscription-based access to their games. On Xbox One specifically, the firm offers something called EA Access, which provides over 50 EA games, and other benefits, to subscribers. That is a clear overlap with Xbox Game Pass, and it could be rolled right into Microsoft's service, making it a no-brainer for gamers.

Most important, buying EA would bolster Microsoft's efforts towards the future of video games. Which is tied, of course, to the future of Microsoft generally. That is, Microsoft is uniquely positioned for a future where video games are delivered from the cloud to any device. A world in which dedicated consoles are no longer platforms unto themselves. A heterogeneous world in which Sony and Nintendo, which currently outperform Microsoft in console hardware, have no particular strength.

And I think that's how this could really work.

Short-term, EA benefits Microsoft with its stable of games, many of...

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