Blizzard makes better games, although I don't consider them particularly innovative. At least not lately. They tend to swerve more towards what will sell, and be popular. In fact, while I believe blizzard's games to be more interesting than Microsoft's, neither company is particularly good at coming up with new stuff. Blizzard takes concepts they've seen work in the past, and try to turn them into a hit game. And they're largely successful at that. Microsoft, while attempting to do the same thing, comes up with games that are simply not as interesting. So in the end, Blizzard wins.
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