The executive wants to focus on innovation and creativity rather than corporate expansion.
While the recent acquisitions by Microsoft and Sony have left many shaken, President at Valve Gabe Newell isn’t worried about the future of the games industry. The concern has always been that consolidation could lead to a lack of innovation over the long run. Newell on the other hand thinks that everything is going to be just fine.
Microsoft spent a record $68.7 billion to acquire Activision Blizzard King this past January. The company bought ZeniMax Media for $7.5 billion in September, 2020. Sony has been hot on its heels, purchasing Bungie for $3.6 billion only days after the deal between Microsoft and Activision Blizzard King was announced. Valve on the other hand has been sitting on the sidelines.Read more:Why Portal Is Strangely Empty And Devoid of Humans
Newell recently gave his thoughts on these business deals during an interview with PC Gamer. “You know, consolidations a lot of times can be motivated by strange reasons,” he remarked. “I’ve sat in boardrooms where people have talked about making decisions about an acquisition because they could fire a bunch of what are called ‘general and administrative expenses.’ And it’s like really? That’s what your strategy is?”
The executive explained that many mergers are just an excuse for layoffs. “When you hear ‘synergy,’ what it really means is you’re going to fire a bunch of middle managers who are overhead.” He went on to say that companies often fail to comprehend the impact of their decisions, noting that “I don’t think you understand how many of your core developers and engineers you’re going to lose because of the disruptions. You have this completely unrealistic view of what’s going to actually happen. That’s motivating these decisions.”