In the bigger picture, MS is many times larger than Sony. Does it make sense to make MS even bigger by them taking a larger share of the gaming market and to make Sony smaller? The impact on Sony overall will be far more significant than the gains MS would get. I mean, MS might gain 1% by increasing its game market share to 50% where Sony would lose 10%, or whatever the numbers are.
It's not so cut and dry in my mind here. When something disruptive comes along, you need to get on it or fall behind and become irrelevant. MS was late to music, late to mobile phones, and late to tablets, etc. And they almost became irrelevant for it. When Satya took over, he made the big push into cloud which largely represents the major profits for MS today. I think we can look today at the market, like Facebook, and ask why they are investing so much into VR. It's because they've hit their peak, and they are about to die if they don't have something else to latch onto. Where is the future..? VR/AR/Wearable headsets. And they know this, because if VR/AR sets manage to shrink enough, it would replace the mobile phone.
Thus we've come sort of full circle as to why cloud gaming matters. It's the reason all these big tech companies are chasing it. If you can solve cloud gaming, you can solve a lot of other problems too, like the fact that mobile and AR devices need to continually shrink further and yet have more power and battery life. Well, the obvious solution is again, real time cloud processing beaming directly into these devices.
It's the only reason why Meta is investing so much into VR and why MS is investing so much into games, and we see Amazon moving into Luna, and Google getting involved. They are aiming to be present for that future but going about it in different ways.
But that costs money too, and it's a huge risk that can still result in failure. We've seen MS fall flat on its face many times here. It's not like MS can continually grow forever, all major products hit a saturation point, and the only way to stop from contracting, is to have a handhold in the next thing that comes after and grow into that, while the previous market contracts.
With more people in Game Pass and even less people paying full price, the economics get worse. Gamers and developers love Game Pass, it's value for gamers and reduces risk for developers and publishers. The loser is Microsoft. Do we want Microsoft to lose? Nobody wants Microsoft to exit the industry.
We've seen Apple cannibalize it's own products this way, and a famous quote from Steve Jobs is that you've got to, because if you don't, someone else will do it to you anyway, so you may as well be in control of that.
That's what is happening to Sony right now. They saw the future and bought Gaikai a long time ago, but didn't invest into this future, and MS came in and began cannibalizing themselves in preparation for the future. If Sony doesn't migrate to cloud, they will die. That's just reality and they know this, the purchase of Bungie was a signal of this, it is just a matter of time due to silicon limits, we cannot keep pushing the better graphics and power narrative, when eventually the watts/cm2 get too high for a mainstream home product, you've nowhere else to go. You are left with little to work with except perhaps even more specialized hardware accelerators. While there will always be a place for the high end, even those are getting overbearing, (looking at the 4090). The size of that graphics card just to cool it and it's still melting itself.
As far as I can see right now, Sony will not exit because they lose COD, they exit because they fail to migrate to cloud. They are doing their best to drag out this traditional gaming generation as long as humanly possible because they need more time to switch over, or, likely, they want as much time as possible to reap as much profit as possible before it's gone. Keeping MS from having these companies will delay change in the industry. Making marketing agreements to block gamepass delays changes in the industry.
It's all this is imo. We can really talk blue in the face of the arguments, but that's the high level trend I'm seeing playing out. You don't like cloud gaming that's really too bad. The future will be like Netflix moving to TVs and the removal of these streaming boxes. The future will be game pads and TVs accessing games through an app. The future will be VR/AR sets not tied to a massive PC, and being able to walk around with them freely being streamed in incredible lifelike graphics.