While Microsoft has now officially acquired Activision Blizzard, the company had to restructure the deal to win the approval of the UK's Competition and Markets Authority regulator, which originally found the deal concerning for a variety of reasons. Microsoft's president, Brad Smith, wasn't happy about the original verdict, meeting it with some harsh words, but it seems like things have changed since, now that the deal has finally gone through.
Sony Really Is Concerned About Microsoft's Xbox Strategy Following the Activision Blizzard Buyout
19.12.2023 - 13:11 / ign.com / Phil Spencer / Jim Ryan / Sony
Following the devastating cyber security attack that targeted Marvel’s Spider-Man 2 developer Insomniac Games, leaked slides have revealed Sony’s internal concern at competitor Microsoft’s emerging strategy following its $69 billion acquisition of Activision Blizzard.
Sony described the buyout, which brings the likes of Call of Duty, World of Warcraft, and Candy Crush within Xbox, as “the leapfrog”. It goes on to say Microsoft is now positioned to “leapfrog our current pillars”.
Sony points out the benefits of the acquisition, which arms Microsoft with strong live service games, scale in mobile, and a ready-made PC storefront in Battle.net. It also notes Microsoft is building its own mobile app store to challenge Apple’s App Store and the Google Play store, which is something Xbox boss Phil Spencer has spoken about multiple times in the past.
Sony goes on to express concern about the Call of Duty “threat” coming in 2027. In order to appease antitrust regulators, Microsoft signed a deal with Sony to keep Call of Duty on PlayStation, and according to these internal documents, that deal ends in 2027. Sony predicts a “massive” threat to its subscription service, PlayStation Plus, which amounts to $1.5 billion in annual revenue.
There’s a “day and date threat” too, with Microsoft poised to launch Activision Blizzard games straight into its rival subscription service, Game Pass. Microsoft has said it won't release the likes of Call of Duty Modern Warfare 3 and Diablo 4 into Game Pass until 2024, but it seems likely next year's Call of Duty game, reportedly called Black Ops: Gulf War, will launch straight onto Game Pass.
In the document, Sony admitted its “pillars are already dated and behind the competition”, and lamented the “elusive perfect game subscription”. The expectation of free, best-in-class video games creates an “unsustainable model”, Sony said, with subscription revenue not enough to cover investment.
A unified console, PC, and mobile experience “doesn’t exist”, Sony said, due to diversity in form factor and computer power. Sony’s central approach, it said, remains the premium sales model.
The internal documents shine a light on the contrasting strategies between Microsoft and Sony. Microsoft launches its games day and date across PC and Xbox and straight into Game Pass, whereas Sony launches its games first on PlayStation, then, sometimes years later, on PC and potentially PS Plus.
PlayStation boss Jim Ryan said in June 2023 that video game publishers do not like Xbox Game Pass. During his pre-recorded testimony for an evidentiary hearing between the Federal Trade Commission (FTC) and Microsoft, Ryan claimed publishers do not like Microsoft's video game subscription service because it is "value
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