I think that most people working in publishing think they’re involved in some giant role playing game. Rather than simply running around muddy fields on a Saturday, dressed in tin foil, they’ve decided that their nine-to-five is in the grip of a massive capitalist conspiracy.

On one side, traditional publishers and retailers form the Rebel Alliance, our only hope against the Galactic Empire’s evil totalitarian rule (AKA Amazon with Apple and Google as understudies). Jeff Bezos, of course, stars as the evil and mysterious Emperor Palpatine, whose methods of deceit are infinite. Anakin Skywalker’s betrayal pales alongside James Daunt’s. Rather than the stomach-clenching revelation “I am your father”, Daunt’s shocker was “I’m going to stock the Kindle”. Which, last week, Waterstones did.

News of the prospective merger of Penguin and Random House initially provoked murmurs of outrage, whispers of lay offs and howls that quality would be affected. However the panic spreading among authors and publishers suddenly reached a higher pitch yesterday. A new Darth Vader presented himself. The Sunday Times reported that Murdoch was bidding around one billion to add Penguin to his portfolio alongside HarperCollins. The potential consolidation of HarperCollins and Penguin would certainly have been interesting; the former recently settled with Amazon and is using the wholesale model where the e-retailer can fix prices. Penguin is still fighting for their right to determine how much their books are priced at with agency model. Ironically enough, despite the outrage, Murdoch would have been one of the few (with Wendi in the ring) I’d back in a fight against Bezos.

The alternate scenario of an evil Murdoch Empire suddenly transforms Penguin Random House into good news. It does make sense; Pearson would be able to concentrate on their lucrative education imprints. The merger forms about 25% of the market – a potent rebel force if ever there were one – and would crucially bring Jedi knights Salman Rushdie, Pat Barker, Ian McEwan, Danielle Steele, Jamie Oliver, EL James and others under the same command. This leverage will allow them to exert more control in the midst of the price wars where Amazon, Sony and Apple are jostling for preeminence and power is up for grabs.

Streamlining is not a bad idea: the fewer assistants dreaming up book trailers the better. Publishers must remember they’re running a business. It’s one where they’re losing money and their customer base is relatively static. Numbers of readers don’t really go up or down unless we’re looking at the latest vampire porn figures (that’s a 64% rise in operating profit for Random House in the first half of the year).

Neither will consolidation necessarily lead to homogenisation on shelves nor leave authors susceptible to dwindling advances. The fear that larger companies are more afraid to take risks on first time novelists or on literary fiction seems groundless given the respective characters of – and competition between – different imprints. Whatever happens, the Booker prize shortlist showed that independent houses are more than capable of nurturing quality fiction (as well as interesting e-projects).

What’s certain is that it’s difficult to predict what might happen. Technology is changing so rapidly that you can now buy a single board computer, the Raspberry PI for twenty-five dollars. E-book prices are likely to drop sharply soon. The Kobo, the best selling e-reader in Canada, is already on sale for £59.99 at WH Smith. Amazon may have dastardly tricks up their sleeve but so do the other companies producing digital content … as the recent lawsuit accusing Apple of collusion with five publishers suggests. The dark side hasn’t won just yet.

Tags: Amazon, harper collins, Kindle, Penguin, Random House, Rupert Murdoch