Despite lucrative IPs, including DC, why Xbox is unlikely to acquire Warner Bros gaming division

Xbox has naturally been added as a potential suitor ever since news of Warner Bros. looking to sell their studios popped up. The news hasn't come in any official sense but follows in the line of speculation that has been there for some time. Naturally, all the big fish are linked and Xbox isn't to be left behind.

However, it is doubtful that Microsoft's gaming division will become an eventual buyer if Warner Bros. decides to sell its studios.

2022 has been a year of acquisitions as there have already been some major changes in the first half of the year. There is more to come as giants like Ubisoft are rumored to be looking for a potential buyer. Entertainment giant Warner Bros. could join them based on rumors, and given what's on offer, there won't be any shortage of likely buyers.

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Warner Bros could get a lot of suitors, but it's unlikely to be Xbox

Recent rumors suggest that Warner Bros. will be looking to sell all its studios. As for the IPs, the suggested plans are along the lease line. Overall, any buyer can obtain a lot of value when one combines the studios and IPs. However, any potential deal will be too close for comfort for Xbox and Microsoft.

The gaming giants are attached to the Activision Blizzard deal, which will be the highest-priced acquisition in the gaming world. The deal has received overwhelming support from the shareholders, with 98% voting in favor. However, much of the job remains as all stakeholders will have to receive the approval of regulatory authorities.

The SEC and FTC are two such bodies evaluating a potential deal. The main area that the FTC will be looking at is a possible case of anti-trust and market consolidation. The FTC doesn't take very kindly deals that can create an unfair monopoly in simpler terms.

It seems unlikely that the Activision Blizzard deal could potentially break the threshold, although it's too early to tell. However, any new potential acquisition could make things look worse for Microsoft and Xbox.

Additionally, the valuation of any deal is also a major factor. The Activision Blizzard deal has a potential valuation of $70 billion, which is incredible for any industry. The stakes are incredibly high, and it's very unlikely that Microsoft will divert its attention elsewhere.

Another reason could be that Warner Bros. will lease the popular IPs. As far as studios are concerned, Xbox has no shortage, and the roster will expand even more once the acquisition in the pipeline is completed.

However, Microsoft can always venture into leasing the popular IPs that Warner Bros. offers. Not purchasing its studios may not be that big of a deal from a commercial point of view.

Had Xbox not been involved in another deal at the time being, the opportunity would have been much more open-ended. Things are complex now, which is natural given the magnitude of the potential Activision Blizzard takeover.

Unless it settles down to near completion, it will be hard to imagine that Microsoft will be interested in another major takeover opportunity.

As far as Warner Bros. is concerned, it is unlikely that there won't be much interest. Putting IPs aside, some exciting first-party studios have churned out quality products in the past.

NetheRealm studios could be an exciting choice for someone like PlayStation with the latter's investments in the fighting game scene. Warner Bros. is yet to reveal its interests officially.

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Disclaimer: This article reflects the opinions of the writer.