That's interesting and in general I want to thank you once more for sharing your knowledge as a laywer and all the research you do. 👏
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The official opinions from Sony, Ubisoft, WB, BN, Apple, Riot, Google and more about the Activision Blizzard acquisition
- Thread starter Idas
- Start date
- Activision/Blizzard
I caught this too. Sony is going this way by end of the generation, all the moves so far point this way.
I'm oversimplifying some of this, but what seems misguided in what I've read in this filing is the lack of distinction between [technological capacity relative to potential market action] vs [market success due to a novel approach] in Sony's statement. Because Sony currently has the capability (using market-accessible channels) to deliver roughly what Game Pass is, and even had a technological head-start by several years, and a dramatically stronger market position to do so, but they just haven't particularly leveraged it in a compelling way by comparison. Microsoft saw a business model they thought made sense, and they built up non-exclusive licensing deals to make it happen. So Sony implying a lack an industry-wide "capacity" to compete with Game Pass, that it's an "artificial competitive constraint" (not an actual quote) is rich.
OP
OP
Thanks! :) Happy to help. Besides, this subject is going to be very relevant in the videogame industry during this generation
Great write up. It's baffling that Sony had a streaming service running on the PS3 and did almost nothing with it.
This is basically the argument that Sony had a head start and market clout to pull off the digital switch but sat on its hands and has the chutzpah to offer anything close to a complaint when someone else beats them to The World's Slowest Punch, and it's a good argument. Also worth noting that Sony is a company that has its fingers in many pies, like TV, music, and film, all markets that made the jump to digital/streaming models years ago, which makes this especially comical.
The economics of Cloud gaming is complex in terms of economics and logistics and scaling it to a large audience. Sony wouldn't be able to do much with expanding the streaming service because of the 5 Million cap. Expanding it with more data centres will drain their finances with little use beyond gaming. Their server blades need physical hardware; another question is whether data centre providers are willing to provide space for those data centres.
So Sony is pretty stuck in this case, hence not much movement in expanding their cloud gaming offerings.
Hence, Microsoft owning their data centres and having multiple use cases is a huge advantage in scaling its cloud gaming business.
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Oh sweet summer child, you honestly think Sony wants this deal to go through and wont cause any sort of drama to slow it down or stop it? Which is a normal response for companies fighting for marketshare.
What's really comical about what you've said is Sony was also bitter about Apple and the iPod when….they own a record label with a a vast music library and created the walkman which was the defacto device for portable music before the iPod. All they had to do was take it digital…but they didn't.
Sony were extremely comfortable in their market leader position, selling critically acclaimed titles for huge revenue and didn't want to disrupt it. In fact you could suggest that they went even further in on that with raising prices and moneyhatting exclusives at the start of the gen.
"Call of Duty represents an important revenue stream for the PlayStation (they provided data but it's redacted), and it is one of SIE's biggest sources of revenue from third parties.
...they believe that Call of Duty is so popular that it influences users' choice of console. In fact, their network of loyal users is so ingrained that even if a competitor had the budget to develop a similar product, it would not be able to create a rival."
So Sony is basically arguing that CoD drives users to purchase certain consoles, a drive which they are currently the beneficiary of through marketing and exclusive DLC, but if Xbox was the beneficiary it wouldn't be fair because no other developer could compete with such a game? Weird self damnation
...they believe that Call of Duty is so popular that it influences users' choice of console. In fact, their network of loyal users is so ingrained that even if a competitor had the budget to develop a similar product, it would not be able to create a rival."
So Sony is basically arguing that CoD drives users to purchase certain consoles, a drive which they are currently the beneficiary of through marketing and exclusive DLC, but if Xbox was the beneficiary it wouldn't be fair because no other developer could compete with such a game? Weird self damnation
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I mean, who can rival hundreds of billions in cash backed by the willingness to spend it?
I think the one takeaway here from Sony's comments is that they fully expect the next COD to go on Game Pass once the acquisition goes through.
The more I read this stuff and think back to how much Sony invested in cod marketing during the ps4 the more I understand their sour grapes
But at the end of the day it's just sour grapes
But at the end of the day it's just sour grapes
Yeah, it seems like Sony's position is:
- Best case: Merger is blocked
- Less good but acceptable case: Merger is approved, but on the condition that Xbox cannot offer COD on Game Pass
- Bad result, but they'll live with it: Merger is approved, COD can be offered on Game Pass, but COD cannot be exclusive ever
- Worst case: Merge is approved with no restrictions on COD
How does a company let something like this happen, if the game is so important to the point they seem to think everyone will drop the console for Xbox over a single game, why would you put all your eggs into a single basket when this could always have happened. I call it bad planning honestly, maybe don't bet on, expect and rely on your business by putting it in the hands of a 3rd party.
Because Sony was caught off guard by the fact that MS is willing to spend 10s of billions on being the dominant force in gaming. I think if Sony had more resources and was more aware of Microsoft's plans, they would try to get ahead of Microsoft and wouldn't be in the position it's in now, but unfortunately, they are too late.
User Banned (5 Days): Platform Warring; History of the Same
Because their strategy was aimed at 3rd party devs. 3-4 years ago Shawn Layden explained it. PlayStation didn't want the pie of the big publishers. They wanted both the platform and 3rd party publishers to thrive. His exact words were:
Let's be honest without hypocricity (i know that i will be attacked by usual suspects or some people won't agree, which is absolutely fine). Big tech understand things quiet different. They want the entire pie. They don't like competition. It's even more cynical, because Microsoft (and ironically Sony too) themselves made a significant impact over the scandal with Activision Blizzard which led to stocks downfall. Then they announce the acquisition for a decent price.... like a vulture, aren't they?
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Eh, Gamepass isn't costing hundreds of billions of dollars and Sony already had a sub that offered rotating games but they failed to capitalize.
I have been playing playstation for many years, especially its exclusives, and I am very worried about the acquisition of activision.
The flight of millions of players and money is going to have a huge impact on the budget to create the triple A that i like so much.
I sincerely believe that PlayStation, if this agreement is finalized, will rightly be one more Sega.
What do you think? Do you think that PlayStation will disappear as the powerful brand and become a video game distributor? I hope this deal doesn't go through. In the long run, it will be bad for everyone. Not just for playstation players..
Im not a console warrior, i just want to enjoy the games i like, and i fear for the future of playstation.
The flight of millions of players and money is going to have a huge impact on the budget to create the triple A that i like so much.
I sincerely believe that PlayStation, if this agreement is finalized, will rightly be one more Sega.
What do you think? Do you think that PlayStation will disappear as the powerful brand and become a video game distributor? I hope this deal doesn't go through. In the long run, it will be bad for everyone. Not just for playstation players..
Im not a console warrior, i just want to enjoy the games i like, and i fear for the future of playstation.
Sony has their own acquisition plans, they don't want regulators breathing down their necks. They won't be trying to stop the deal because that would be bad for them eventually.
Providing a platform for third-parties has been the Playstation strategy since 1994. It's only changing slightly right now because third-parties have all become multiplatform with console and PC. That's why Sony have been making lots of acqusitions recently.
The PS brand was built and thrived on 3rd party games until the PS4 generation.
Sony 1st party output started to have a sizeable impact on PS4; during the PS1-PS3 era you have GT pulling great numbers and occasionally 1-2 games doing great while the rest of the success came from courting the likes of Capcom, Square Enix, Atlus and other publishers to make exclusive content for your platform.
To this day, even with 8/9 1st party games selling 10 million units or more they still rely on 3rd party.
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I think some of you are overrating Sonys statement. Sony gains nothing by going "Meh, doesn't impact us much".
Low balling in this case would have been stupid, so exaggerating some statements to potentially hinder some moves ( Be it exclusivety etc ) is the smart move here.
Low balling in this case would have been stupid, so exaggerating some statements to potentially hinder some moves ( Be it exclusivety etc ) is the smart move here.
No to both lol
Sega were never as strong as PlayStation are now, a comparison between the two makes no sense.
Yes, this acquisition will probably hurt Sony's revenue due to losing the marketing and some users hopping to Xbox for GP or exclusive/early access content. But if CoD stays multiplatform forever I don't see it being the deathblow people are portraying it as. Even if CoD was exclusive I still don't think that would be the case.
Yeah, if the agreement is greenlighted who would stop a Sony+T2 or EA merge?. But they should be doing it already, so that both resolutions are someway influenced.
If the rumors are true about Apple being the frontrunner for EA, if this deal is approved, then EA deal will be approved too. May be that's why Apple opinion is so "neutral".
Probably any big acquisition by Sony will be approved too, unless Microsoft plays dirty and use their influence.
Wasnt the EA agreement, before falling down, almost finished with Comcast?. IMO Sony should go all in for their future and get them,despite being almost half their value. If not, losing also FIFA would risk their long term strategy and survival.
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Well, i read other story:
Report: EA Almost Merged With NBC Universal Before Deal With Comcast Dissolved
Puck News reports the merger fell apart last month.
www.gameinformer.com
No need to worry. Regardless of ABK deal results, Sony will sell tens of millions of PS5s, produce plethora of those GAAS and other experiences, and expand their content from the constraints of console market into PC, mobile and cloud. PlayStation brand will remain strong for years to come.
Well, i read other story:
Report: EA Almost Merged With NBC Universal Before Deal With Comcast Dissolved
Puck News reports the merger fell apart last month.
Probably Apple being frontrunner is a result of the failed deal with Comcast.
I think your read on Microsoft wanting the whole pie is a bit misguided I think they want the most amount of pie they can have and also want to bake a new pie
at the end of the day I don't think cod being essentially tied to Xbox with exclusive content while releasing on everything that will run it is going to be the doomsday scenario many say. It will be the 360 generation where xbox and PlayStation had parity which is good for everyone
I think you can rest assured that PlayStation will be totally fine and still able to completely determine their own path and destiny after the acquisition of Activision. If the single player games you love continue to sell well and be popular, then they will continue to be made by the teams that have invested so much technology, talent, and time to creating and perfecting them. PlayStation post ABK-acquisition is not only still making more revenue, but selling more hardware, but staying more culturally relevant across the globe, but still influencing the industry by its own initiative and power.
If you're worried about anything, you should be worried about Sony's move toward GAAS games. Not because GAAS games are bad, but because it will necessarily take resources and talent away from the games you like. BUT even then, I truly would not be worried. Having a few really successful GAAS games can help fund those big AAA SP games you want - which are often very VERY expensive to make and uncertain in its return and sales.
So... nah, don't worry. PS will be fine. The hope is that ABK strengthens Xbox, and both platforms continue to be great places to play games.
Hmm. I think just the opposite, really. I think you're absolutely right that the PR answer and all of Xbox's answers and marketing focus is on Game Pass. What I don't believe is that that is because they want it to replace everything else.
And no, Microsoft's business model is not monopoly. And it hasn't been for about 10 years (and hasn't CREDIBLY been that in 15.).
The reason they market Game Pass so hard is that it's EASY TO MARKET lol. It's the perfect centerpiece that can always be pushed and has built up its own brand identity. It's why marketing God of War or TLOU is easier than marketing Destruction All Stars or Concrete Genie or Days Gone - there's history and past effort that can help you move forward.
But... when I say "easy and accessible options", what do I mean? I mean MS wants to make it as easy as possible for anyone who wants to give money to MS to give money to MS. Is that through Game Pass? Great! Is that through Windows Store, because you don't own nor want a console? Great! Is that through mobile phone streaming or Samsung TV because you don't want to spend money on either? Great! Is that through buying digital games off the storefront? Great! Is that through physical games? (Well, hope you bought a Series X haha.) Is that a full price collector's edition because you love a franchise? Great! Is that a subscription to ESO or soon WOW? Great! Is that renting a server on Minecraft or buying a cosmetic in Sea of Thieves or buying cat ears in Halo Infinite? Great!
Some of these require Game Pass. A lot of them don't. But the goal of all of them is to take away barriers to playing games, because that also takes away barriers to spending money.
Sony also want us to be entrenched in their ecosystem. But they do that by focusing around the hardware that can play the games (changing a bit now). PS5 is the only place you can play Horizon and Spiderman. And when you're in our ecosystem to play those games, well then you might as well play Fortnite and Apex and COD here too - and give us all those sweet microtransaction cuts too.
You also assert that Microsoft's business model is monopoly. "Capture markets and lock it". And certainly, that has been true in many ways in the past. Windows is still a remnant of that dominance. But.. you're also talking about a company that has since built in a Linux subsystem into every copy of Windows. You're talking about a company that open sourced (somewhat) their premiere software and then delivered it to rival OSes and devices. The same Microsoft that has been chasing subscriptions (Satya Nadella's) has really been moving away from monopolizing the industries and spaces they compete in. They are the market leader in business office. But it's questionable in consumer. They are the market leader in PC OS. They're not in Gaming. They're not in Cloud. They're not the market leaders in premium computing hardware or mobile or search or ads or maps or AI or VR/AR. And they don't operate like they need that. Not anymore.
Returning to subscriptions: Xbox (and indeed the vast majority of businesses) certainly favor sure and consistent and predictable revenue streams over uncertain, unreliable, and fluctuating revenue streams. And that's why Game Pass makes a lot of sense. But Game Pass doesn't mean they don't want you to buy games outright anymore. They certainly still want you to buy DLC and microtransactions. And that's why I say that their business model is not "game pass". It's reducing the barriers to people spending money within the Xbox ecosystem SOMEHOW in ANY way. Game Pass is pretty powerful tool to do that - it's not the only one and it's not always the best one. Which means those other tools will ABSOLUTELY stay relevant too.
But... when I say "easy and accessible options", what do I mean? I mean MS wants to make it as easy as possible for anyone who wants to give money to MS to give money to MS. Is that through Game Pass? Great! Is that through Windows Store, because you don't own nor want a console? Great! Is that through mobile phone streaming or Samsung TV because you don't want to spend money on either? Great! Is that through buying digital games off the storefront? Great! Is that through physical games? (Well, hope you bought a Series X haha.) Is that a full price collector's edition because you love a franchise? Great! Is that a subscription to ESO or soon WOW? Great! Is that renting a server on Minecraft or buying a cosmetic in Sea of Thieves or buying cat ears in Halo Infinite? Great!
Some of these require Game Pass. A lot of them don't. But the goal of all of them is to take away barriers to playing games, because that also takes away barriers to spending money.
Sony also want us to be entrenched in their ecosystem. But they do that by focusing around the hardware that can play the games (changing a bit now). PS5 is the only place you can play Horizon and Spiderman. And when you're in our ecosystem to play those games, well then you might as well play Fortnite and Apex and COD here too - and give us all those sweet microtransaction cuts too.
You also assert that Microsoft's business model is monopoly. "Capture markets and lock it". And certainly, that has been true in many ways in the past. Windows is still a remnant of that dominance. But.. you're also talking about a company that has since built in a Linux subsystem into every copy of Windows. You're talking about a company that open sourced (somewhat) their premiere software and then delivered it to rival OSes and devices. The same Microsoft that has been chasing subscriptions (Satya Nadella's) has really been moving away from monopolizing the industries and spaces they compete in. They are the market leader in business office. But it's questionable in consumer. They are the market leader in PC OS. They're not in Gaming. They're not in Cloud. They're not the market leaders in premium computing hardware or mobile or search or ads or maps or AI or VR/AR. And they don't operate like they need that. Not anymore.
Returning to subscriptions: Xbox (and indeed the vast majority of businesses) certainly favor sure and consistent and predictable revenue streams over uncertain, unreliable, and fluctuating revenue streams. And that's why Game Pass makes a lot of sense. But Game Pass doesn't mean they don't want you to buy games outright anymore. They certainly still want you to buy DLC and microtransactions. And that's why I say that their business model is not "game pass". It's reducing the barriers to people spending money within the Xbox ecosystem SOMEHOW in ANY way. Game Pass is pretty powerful tool to do that - it's not the only one and it's not always the best one. Which means those other tools will ABSOLUTELY stay relevant too.
Sega had bigger problems that contributed to their demise.
At best what's gonna happen is that Sony will be upset that competition exists.
A lot of people just want Sony to be the dominating force. Sell more, generate more revenue and so on. Granted that attitude towards Xbox has always been - "it should compete somewhere else without affecting status quo".
Sony here is clearly an opportunist, but they have to move very carefully as they don't really open the can of worms regarding market share and their own time exclusive or exclusive deals (after all they heavily leveraged their market share in attempts to suppress Xbox while Xbox was weak). Sony tried to sega Xbox and they were close, but Microsoft proper intervened and now we can see what MS can do if they take gaming seriously.
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User Warned: Platform Warring
LMAO.
Whatever Sony deals happened is a drop in the ocean compared to the deals Microsoft was making during the 360 days with major third-party such as Electronic Arts (Bioware), Activision and Take-Two among others.
Those Xbox deals were so massive and hurt Sony so bad that it forced them to invest in their own studios, which is how we ended up with Uncharted and The Last of Us at the end of the PS3, and the rest of the "Playstation Studios" afterwards.
Meanwhile Xbox kept hurting itself with chasing Kinect instead of AAA games at the end of the 360 era, and the whole Xbox One launch debacle. Self-inflicted wounds that Sony had no part in.
To go back to the present, I personally don't care about this deal as I don't give two shits about Call of Duty and this toxic company known as Activision-Blizzard, but I simply don't understand why so many people are trying to paint Microsoft as this poor underdog trying to survive while they are the one waving their infinite money in order to force their business model, to such a scale that regulatory authorities around the world are taking notice.
In my opinion it looks like Microsoft who is trying to force Sony out right now. That's why they are being investigated by the way.
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Don't just straight up failed to capitalize. Yes Microsoft owns their own data centers - and that's certainly advantageous- but Sony's had opportunity to scale by renting server space (like shadow cloud or Netflix)…that's how they planned to do it, but the value proposition of their product offering was poor and they did nothing to change it.
Sony has survived Microsoft's spending for 2 decades. Spending money money doesn't guarantee success. There must be execution.
They are not being investigated. The deal is but big deals will be always investigated and in case of ABK, ABK is big and operates in a lot of countries thus it has to go through more regulators.
I don't think the Activison acquisition is really going to harm Sony. I don't see the scenario in which 10's of millions abondon PS to sign up for Gamepass, for one game. That makes no sense as alot of COD players play f2p Warzone.
Netflix is able to rent server space and scale up well because they don't need custom server blades for streaming video. Whereas for Sony's case just like Stadia and Xbox Cloud Gaming they need custom server blades. How will PS5 and PS4 games run on PC-based servers exactly?
They won't see current PS5 owners switch to Xbox, but the casual audience that's yet to purchase a next-gen is another story.
This is a joke right? Or did you just start gaming around this time?
literally no one expected Microsoft to just start buying up publishers.
Presumably, it would run on custom server hardware that they install in datacenters- just like they do currently for psNow … just like MS does with xcloud.
If Sony is "stuck" it's purely because they chose not to make the investments and design choices that would allow them to best capitalize on their streaming tech. Not because they don't own data centers.
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The simple answer is - No competent company would rely so completely on a single 3rd party title… and Sony is a competent company.
They are suggesting that they are so reliant on this singular title in hopes to maintain a competitive advantage and to hopefully keep MS from gaining one.
No one told you that.
Also, a company not expecting other companies to buy companies has no relevancy.