Microsoft acquired Activision Blizzard King for $69 Billion on 2023-10-13

[Shifty Geezer]

The new harry potter game comes out in March and the PS5 version gets extra content over the xbox and pc versions. So those people are paying the same price for less of a game. Is that really a good thing ?

That's just a spot example. Obvious counter-point is "there's nothing stopping MS securing exclusive content the same way." The alternative perspective is "why is PS getting extra content? What is Sony doing that MS isn't and why don't MS do the same and why didn't MS outbid Sony for this content or get content in some other title or negotiate better or whatever?"

MS invests a lot of money into making the xbox . IF xbox doesn't deliver on the profit side then they can simply exit the console market and instead just focus on xbox for pc and xcloud on other devices. There have been calls in the past by large share holders to exit the xbox business . Would it be a good thing for the market if a player exists the gaming market ? This year we had the first console since the jaguar to increase in price after launch.

It wouldn't be a good thing, but is that really realistic? I mean, $70 billion?! Why doesn't MS just pay itself $5 billion a year for 14 years to add to annual division profitability?! I'm unconvinced this move is that profitable in the console market, and justifying this purchase to the shareholders is more about a far bigger goal to secure massive income from the gaming market. And that is 1) more likely than MS pulling out of the console space and 2) going to do more damage to Sony than not getting ABK will do to MS.

Again, if this acquisition fails, MS can still do everything Sony does and compete on the same footing. Does it suck that Sony gets exclusive content. Yes. Okay, so either we get that regulated or, if that's not going to happen, MS competes with the same shitty practice. It doesn't need a publisher acquisition, and indeed a publisher acquisition will only make Sony increase it's efforts, no?

Going back to my earlier question, do you think there is now an 'arms race' of acquisitions and that over the coming years, content will be even more console exclusive, not less? Do you agree or disagree with my view that Sony has massively stepped up its studio acquisition after MS's Mojang and Bethesda purchases? MS spent $10 billion on these two before Sony introduced its two-year $14 billion investment allocation.

As for the bigger picture well its hard to say. Sony is in multiple markets. Should be we be worried about how large Sony is in the music or anime markets to limit what they can do on the gaming side or vice versa ?

If Sony are that big enough to compete 'unfairly' in those markets and/or leverage that revenue to compete unfairly in other sectors, I'd say yes. Just as we want 3 players in the console space rather than 2, we want more 'large' corporations in the world rather than just fewer, massive megacorporations. If Sony were allowed to buy a massive monopoly in the Anime space and squeeze out rivals, that shoudn't have happened. Such a mistake wouldn't justify the same being allowed again.

 

[Deleted member 11852]

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.

Windows Mobile 2003 was one of the biggest mobile OS's before Apple and Google got in the game, and second only to BlackBerry and PalmOS. Microsoft let their mobile platform stagnate then were overtaken by Apple, then Google. You're also forgetting that Microsoft had a tablet version of Windows long before Apple launched the iPad. In no way was Microsoft late to these markets, they were there at the genesis of the smartphone and tablet markets.

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.

Apple cannibalise products for more profitable products. Microsoft are doing it all backwards.

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.

Wow, you really on are a roll re-wrting history. You know Sony tried the cloud gaming thing a while back? They aren't late in migrating 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.

I'm 100% sure if the GamePass model was profitable - and here I struggle because Phil Spencer has laid flatly what the low margins are - then I have zero doubt Nintendo and Sony would be all over this. I'm sure Valve would be in the PC space as well. The connective and narrative you're presenting here is that the company losing money selling console hardware and proposing an ecosystem with the lowest possible profit margins are some lone visionary business gurus that transcend the business sense of.. well, uh.. everybody else in the videogame industry.

I'm not convinced, mate.

https://en.wikipedia.org/wiki/2022_in_video_games

I'd disagree, if there were only 100 major releases each year, I think it would be fairly accurate to say 20 of those titles will make up 80% of the revenues, the reality is that, there are way more than 100 releases each year. I'm talking about total share of the revenue for the game industry.

Your link does not demonstrate that on any platform a "small fraction" of titles (~20%) produce ~80% of the profit. It's profit that is important, Phil Spencer is taking about profit. Revenue can look impressive even if you're making a loss or little profit.

You need to evidence that claim. You're presented as an accepted fact but unless you can evidence it then it's merely an outlandish theory.

 

[Deleted member 11852]

Link. Microsoft says that, on average, Xbox Game Pass subscribers play 30% more games than non-subscribers, and spend 20% more on them as well.

Doesn't this demonstrate that the people who are playing most games and get the most value from GamePass are paying more than those who don't? I.e. your core avid gamer plays (and spends) more than your casual gamer? Which you would expect to be the case.

I personally don't think avid gamers spending 20% more than folks who are more casual is actually great, what is surprising is that it is only 20%. I wonder what the avid vs casual difference in spend was before GamePass, because I used to spend a lot more on games before Game Pass. A spend a lot less to play a lot more games. That's why the profit margins are so low.

 

[Shifty Geezer]

Wow, you really on are a roll re-wrting history. You know Sony tried the cloud gaming thing a while back? They aren't late in migrating to cloud.

Can we please move on from the pat insults like "you're rewriting history"? Like, everyone involved. It just generates ill-feeling and doesn't contribute to the discussion. In my responses to myself, I parodied this as it just felt like the naturally emotionally-charged response and just how I felt the arguments need to go to fit in.

On the matter of Sony cloud gaming, the biggest difference is Sony need that to be profit making, or certainly weren't in a position to invest heavily in its growth. MS have been able to push cloud faster and harder thanks I think to 1) more money and 2) a massive side-business of cloud computing. Cloud is part of MS's long-term future, so when they got in on it, they could do so faster and with a bigger push and bigger subsidies for better value.

I'm 100% sure if the GamePass model was profitable - and here I struggle because Phil Spencer has laid flatly what the low margins are - then I have zero doubt Nintendo and Sony would be all over this.

That's exactly it. With all the early game-streaming players, they all went bust. Gaikai survived by being acquired by Sony. Sony have the numbers on game streaming - if it was hugely profitable, they'd be doing it. Unless we assume their accountants are incompetent and they've missed a trick, decimal point in the wrong place, then when Sony say they'd lose money offering their AAA day-and-date on streaming, that's because they would. Sony's slow growth strategy fits the overall picture of streaming revenues.

One issue with MS's comments is they don't present clear numbers, only relative values. Those can be constructed all sorts of ways. If we look for as many insights as possible and consider all streaming services, they struggle to make good money (they lose billions...). Seems unrealistic MS hit the magic formula that was open to Sony but they've missed it. It seems only when they hit critical mass they gain good profits, which either requires slow growth or massive investment to grow faster than this natural profit-limited growth.

 

[BRiT]

I don't get why some are still questioning if GamePass is profitable to Microsoft when there have been multiple statements over and over from them saying it is profitable.

 

[eastmen]

That's just a spot example. Obvious counter-point is "there's nothing stopping MS securing exclusive content the same way." The alternative perspective is "why is PS getting extra content? What is Sony doing that MS isn't and why don't MS do the same and why didn't MS outbid Sony for this content or get content in some other title or negotiate better or whatever?"


It wouldn't be a good thing, but is that really realistic? I mean, $70 billion?! Why doesn't MS just pay itself $5 billion a year for 14 years to add to annual division profitability?! I'm unconvinced this move is that profitable in the console market, and justifying this purchase to the shareholders is more about a far bigger goal to secure massive income from the gaming market. And that is 1) more likely than MS pulling out of the console space and 2) going to do more damage to Sony than not getting ABK will do to MS.

Again, if this acquisition fails, MS can still do everything Sony does and compete on the same footing. Does it suck that Sony gets exclusive content. Yes. Okay, so either we get that regulated or, if that's not going to happen, MS competes with the same shitty practice. It doesn't need a publisher acquisition, and indeed a publisher acquisition will only make Sony increase it's efforts, no?

Going back to my earlier question, do you think there is now an 'arms race' of acquisitions and that over the coming years, content will be even more console exclusive, not less? Do you agree or disagree with my view that Sony has massively stepped up its studio acquisition after MS's Mojang and Bethesda purchases? MS spent $10 billion on these two before Sony introduced its two-year $14 billion investment allocation.

If Sony are that big enough to compete 'unfairly' in those markets and/or leverage that revenue to compete unfairly in other sectors, I'd say yes. Just as we want 3 players in the console space rather than 2, we want more 'large' corporations in the world rather than just fewer, massive megacorporations. If Sony were allowed to buy a massive monopoly in the Anime space and squeeze out rivals, that shoudn't have happened. Such a mistake wouldn't justify the same being allowed again.

1) It's really not just a spot example

Square Enix’s Avengers game is getting a PlayStation-exclusive Spider-Man character, and that sucks

Spider-Man joins the Avengers, but only on PS4 and PS5.

www.theverge.com

Avengers on playstation got spiderman

Here’s the full list of PS4-exclusive content waiting for you in Destiny 2: Forsaken

Including new armour sets, a wild new Exotic weapon, a new ship and a new Strike

blog.playstation.com

Destiny 2 got exclusive strikes

https://gamerant.com/call-of-duty-vanguard-playstation-exclusive-mode-party-experience-features/

COD has a history of missing content on other platforms


I am sure there is more out there as this is just a quick look at what is going on out there. Not sure how you can argue that any of this isn't a bad thing for gamers.

2) MS wants this deal to go through because of gaming ip across all markets including mobile which they have a very small percentage single digit share of and even with activision I believe its still a single digit share . MS can exit the console market space at any time. They spend hundreds of millions designing , supporting and subsidizing the hardware. They can just as easily skip those costs and just keep with xbox on the pc. It's as likely a scenario as MS buying activision and suddenly becoming first place in the market and sony leaving it. If anything its a much more realistic take on where the market is at.

3) Sure , MS will just buy up small developers by the dozens like sony does. Sounds great. Shouldn't be an issue even if they are bungie sized right ? So Square and Capcom and so on ? At the end of the day I don't see it any differently than if they buy up Activision. If buying developers for content is okay then it really doesn't matter the size

4) There has always been an arm race. sony itself has been part of that. I have already listed the amount of studios sony purchased during the ps3 era and now they are just back to buying more. But I think you are looking at this as MS is making these purchases and Sony is reacting but if you look at the time line its really Microsoft just doing what they want for their own business needs and sony doing the same.

Sony bought a lot of studios during the ps3 generation because they needed teams focused on their hardware which was at a disadvantage. MS at the time made a lot of 3rd party deals and I believe that MS learned by the early years of the xbox one that they need to be locked tight. Looking at gears of war , MS had to buy the franchises to keep it exclusive . Looking at mass effect it became multiplatform . Looking at Sunset over drive well Sony bought that company.

So I think MS learned that its simply smarter to buy a company and invest resources that way so when a game is a hit or becomes a hit they get the reap all the rewards without it getting rug pulled out from under them.


For both these companies I think they know they need a consistent stream of titles each year at least 1 or 2 a quarter to continue to drive customers to their platforms. With the average time frame of making a game getting longer these companies will need more and more developers to keep up. MS is making bigger purchases because they are much futher behind.

5) Well I believe sony makes up 30-40% of the music market. They have made a few more acquisitions there so it might have increased over the past few years. They also bought funimation on the anime side and are merging it with crunchy roll. So they now are the biggest anime streaming service.

I personalyl don't want more mega corps in the world I actually want zero of those and would not mind seeing all these big companies get knocked down to much smaller sizes. But looking at all these companies aquisitions apple / sony /ms/ amazon and so on they are all buying at such massive rates that I think its a bit naïve to call out one over any of the others.

MS's advantages are Windows and Office. I don't see office being an enticing platform to lure in gamers and while windows is the worlds most popular desktop os its open to anyone making a store front on it including sony. the most popular store front on the platform is steam currently. I don't think windows store /xbox makes the top 3 on the platform ( I'd assume it be steam , gog , epic and maybe origin/ea beating out xbox)

I certainly think in terms of what would make an enticing platform would be the worlds largest anime streaming service and the worlds largest music catalog with a sprinkling of Sony's movie / tv content on top imo.

I dunno maybe you disagree ? Would xbox game pass ultimate bundled with ms365 personal be more popular with gamers than psn + crunchy roll + sony's music and movie/tv bundle ?


Also I think I've said it before here many times over the last year or so. I think Discovery/Warner is what MS is going to eye next.

Apple has their own os platform + music + tv/ movie platforms
Google has their own os platform + music + tv/movie + streaming video content
Sony has its console + music + tv/movie + anime content platforms

So buying discovery/warner which is really cheap compared to other purchases will give them the popular hbo streaming service + discovery app . It would also give them access to tons of famous IP. Warner has the movie/tv rights to harry potter do they have the game rights too ? warner has all the DC ip and game rights adn so on and so forth. I think they will try that before another dedicated gaming company even approaching Activisions size

 

[Nesh]

I don't get why some are still questioning if GamePass is profitable to Microsoft when there have been multiple statements over and over from them saying it is profitable.

I ve seen multiple reports on revenue but not on net profits.

Also if it was sustainable for Sony and Nintendo they would have done it themselves. Sony multiple times reported that it was ubsastainable for them and the Plus tiers serve as a better product life cycle management to regenerate products whose sales have saturated.

 

[BRiT]

I ve seen multiple reports on revenue but not on net profits.

Also if it was sustainable for Sony and Nintendo they would have done it themselves. Sony multiple times reported that it was ubsastainable for them and the Plus tiers serve as a better product life cycle management to regenerate products whose sales have saturated.

Right, but Sony's statement has no impact on the statements by Microsoft. I don't know why anyone would think they do. The companies have different structures where what applies to one does not apply to the other.

 

[SmooTh]

Seems that Chile approved the deal

FNE aprueba la adquisición de Activision Blizzard por parte de Microsoft Corporation

www.fne.gob.cl

https://twitter.com/x/status/1608498868378812420

 

[iroboto]

Windows Mobile 2003 was one of the biggest mobile OS's before Apple and Google got in the game, and second only to BlackBerry and PalmOS. Microsoft let their mobile platform stagnate then were overtaken by Apple, then Google. You're also forgetting that Microsoft had a tablet version of Windows long before Apple launched the iPad. In no way was Microsoft late to these markets, they were there at the genesis of the smartphone and tablet markets.

Yes, and lack of investment there in a immature market meant they were ousted, handedly because they didn't take the threat of these devices seriously.

Steve Ballmer literally laughed at the iPhone when it came out in June 2007, telling USA Today, “There’s no chance that the iPhone is going to get any significant market share. No chance.”

He’d quit laughing by the time Google Android hit the market in September 2008. By then, he had his developers racing to develop Windows Phone, but by the time it came to market in October 2010 they were nearly three years too late — a mistake that cost Microsoft the mobile market.

Being present there doesn't mean investment.

To put things in perspective, Microsoft launched the Zune around five years after Apple released the first iPod (via CNN). Microsoft aimed to take on one of its biggest competitors with an MP3 player, but it didn't ultimately find success with that model or in the portable music player market as a whole. The Zune had its fans, as most failed products do, but it didn't make a big splash and the model seemingly faded away as quickly as it was launched. Why did that happen at a time when MP3 players were massively popular?

On Ipad from Steven Sinofsky
They weren't late, they just couldn't see what an ipad would become. They were dominated by it because MS was largely relying on Netbooks at the time. Though, to their credit they have stuck it out with Surface. But they are only 5% of the marketshare versus Android and Apple.

Wow, you really on are a roll re-wrting history. You know Sony tried the cloud gaming thing a while back? They aren't late in migrating to cloud.

And I think we can see the difference between how fast MS is moving in this space and Sony not moving in this space. Owning a service and doing nothing with it isn't the same as migration. We've not see major moves here to migrate their services to online. We have a very different opinion of what 'trying' means and 'migrating' means; at the very least the latter requires commitment to it being their future mode of operation.

Your link does not demonstrate that on any platform a "small fraction" of titles (~20%) produce ~80% of the profit. It's profit that is important, Phil Spencer is taking about profit. Revenue can look impressive even if you're making a loss or little profit.

45+ Video Game Industry Revenue Statistics: Game On!​

Fascinating Video Game Industry Stats (Editor’s Choice):​

• Free-to-play games generated 80% of the total industry revenue.
• The global video game market is predicted to be worth $197.1 billion by 2022.
• The video game industry generated $179.7 billion in 2020.
• Esports market is on the route of surpassing $1.5 billion by 2023.
• 81% of Americans probably play and pay for games.
• An average gamer spends at least 7 hours a week playing games.
• Tetris is the best-selling video game of all time, with 500+ million copies sold.
• Video games produced a revenue of $41.3 billion in 2020 in the USA.

3. The indie game market is worth $1 billion on Steam alone.​

4. Premium game revenue amounted to $24.5 billion in 2020.​

The two most popular games were Call of Duty: Modern Warfare by Activision Blizzard that took the top spot for premium title revenue ($1.9 billion), followed by FIFA 20 at $1.1 billion.

5. Call of Duty: Modern Warfare was the top earner in the premium game market in 2020.​

(Source: Statista)

Call of Duty: Modern Warfare was the highest-grossing paid premium game of the year, generating around $1.91 billion across all platforms.

Top-earning premium video games in 2020:

• Call of Duty: Modern Warfare – $1.91 billion
• FIFA 20 – $1.08 billion
• Grand Theft Auto V – $911 million
• NBA 2K21 – $889 million
• NBA 2K20 – $771 million
• Call of Duty: Black Ops Cold War – $678 million
• Animal Crossing: New Horizon – $654 million
• Cyberpunk 2077 – $609 million
• Sims 4 – $462 million
• Doom Eternal – $454 million

5. Free-to-play games generated $98.4 billion in 2020.​

8. Retail revenue of the US video game industry amounted to $4.45 billion in 2021.​

I don't have the data for the 80/20 rule, but it's pretty clear to me how quickly the top earning premium video games revenues are dropping off. There are still an additional 10 titles to go here to get to 20, assuming there are 100 titles released every year, but we are way over that when all of Indie games industry combined only amount to 1B.

The top 10 titles there add up to 8.4B or ~30% of 24.5B. It's not unfathomable that the next 10-20 titles will add an additional 20% totaling to 50%. F2P revenue will make up to 30% bringing the total revenue to 80%
61% of revenue from ABK at the beginning of '22 was made up entirely from microtransactions.

 

[eastmen]

I don't get why some are still questioning if GamePass is profitable to Microsoft when there have been multiple statements over and over from them saying it is profitable.

I think some people get very attached to what I would call customs for lack of a better word. People have been buying games a traditional way for a very long time and people don't like change at all lol. You see this in regards to the change over from physical to digital. I remember people saying the same thing with streaming movies vs buying and rentals. This is likely the last generation of physical media. I think the rumors of sony moving to an external usb bluray drive is real and I have a feeling microsoft will eventually do the same and next gen those drives will just be for BC and perhaps some markets where download speeds are still bad or capped low.

 

[BRiT]

Seems that Chile approved the deal

FNE aprueba la adquisición de Activision Blizzard por parte de Microsoft Corporation

www.fne.gob.cl

https://twitter.com/x/status/1608498868378812420

I was just going to post her statement, but I see you already edited it in. Good job!

 

[Deleted member 11852]

On the matter of Sony cloud gaming, the biggest difference is Sony need that to be profit making, or certainly weren't in a position to invest heavily in its growth. MS have been able to push cloud faster and harder thanks I think to 1) more money and 2) a massive side-business of cloud computing. Cloud is part of MS's long-term future, so when they got in on it, they could do so faster and with a bigger push and bigger subsidies for better value.

I found no reliable source on whether PS Now is profitable, only numbers of subscriber counts and revenue - which are useless. I'd speculate that part of the reason PS Now was rolled into the PS+ tiers was in either wasn't profitable or had low-profitability.

Yes, and lack of investment there in a immature market meant they were ousted, handedly because they didn't take the threat of these devices seriously.

You didn't say lack of investment, you said Microsoft were late to market: "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."

Microsoft literally were the potential disruptive influences in two markets. Zune was a genuine example of being to late, launching Zune as Apple sunsetting the classic iPod. But being in new technology markets at the start, being bigger than your competitors whilst also having all the advantages of being Microsoft?

I don't have the data for the 80/20 rule, but it's pretty clear to me how quickly the top earning premium video games revenues are dropping off.

This is because data to support your 80/20 theory doesn't exist. I could believe that the majority of profits on PlayStaton (where there is published financials) comes from a disprotionately small number of titles but 80/20 is mathematically impossible. The number of profits from the 20% would have to be astronomically disproportionate (far exceeding average sales numbers) to utterly abysmal (project loss-leading) numbers of the 80%. The industry would have collapsed years ago.

There are still an additional 10 titles to go here to get to 20, assuming there are 100 titles released every year, but we are way over that when all of Indie games industry combined only amount to 1B.

Over 450 titles have been released on PS5 since launch, PS4 has more than 3.4K titles.

The numbers you quote or link are mixes of profit but mostly revenue. These are not the same thing. You were talking about profit, not revenue and for the revenue figures you posted its impossible to discern profit. Sony, Nintendo and most publishers do publish sufficient information about sales and profitability (ignore revenue) for you to actually do the work on this.

What you are describing is the situation on mobile, where a handful of F2P 'whale' games generate ridiculous profits for Apple.

edit: typos.

 

[Deleted member 11852]

I don't get why some are still questioning if GamePass is profitable to Microsoft when there have been multiple statements over and over from them saying it is profitable.

I clearly misremembered Phil Spencer's October interview at the WSJ Tech Live conference because I also thought the 10-15% was profit but having rewatched it, it is revenue. Around 20 mins in Phil Spencer says "it's profitable for us.".

I think that's the clarity that would be useful but I doubt we're going to get it.

 

[Nesh]

Right, but Sony's statement has no impact on the statements by Microsoft. I don't know why anyone would think they do. The companies have different structures where what applies to one does not apply to the other.

Impact in terms of what? Do you mean public statements or financial statements?

 

[Shifty Geezer]

I don't get why some are still questioning if GamePass is profitable to Microsoft when there have been multiple statements over and over from them saying it is profitable.

Because companies can wrangle that sort of info. Netflix reports 5+ billion profits, but I've read they employ creative accounting to be able to present a story to investors that they are making money where rivals like Disney+ are losing billions. Unless you have transparent financials, you can't be sure of any PR statement. There are lots of ways to move figures around the books to give different outcomes.

Given that every other streaming platform loses money save possibly Netflix which has invested over decades and quite possibly isn't as profitable as it claims, and that the other game streaming services all went bust (including the massive Google closing Stadia), and that Sony has been sat on streaming for longer than MS but hasn't made massive money from it (at least hasn't reported n it), there's legitmate reason to question MS's statements. It doesn't disprove profiabiltiy, but there's plenty enough reason not to take them at face value. It's an unfortunate reality with modern business and managing share-price that creative financial PR is part of reporting.

 

[Deleted member 11852]

It doesn't disprove profiabiltiy, but there's plenty enough reason not to take them at face value. It's an unfortunate reality with modern business and managing share-price that creative financial PR is part of reporting.

And when the discussion is circling the issue of Game Pass being the future compared to the traditional/conventional models that Nintendo, Sony, Valve and Epic employ, it's obviously a subject that will get debated. The economics of Nintendo and Sony's game businesses are crystal clear from their financials. If Game Pass were really profitable I believe Microsoft would be keen to say how successful and profitable it is. I also believe Epic and Value would be all over this model. Fortnite profit subsidises all starts of stupid Epic experiences.

Game Pass is clearly a good deal for gamers, and publishers love it because it reduces risk and lets them be bold so somebody is taking a bit of a hit and there is only one party left. The service's profitability, which is a factor of its long-term viability, is what is missing. Of course, it could just be a it's a Microsoft money laundering operation and everybody wins.

 

[Shifty Geezer]

1) It's really not just a spot example

Yes, but why isn't MS doing the same? You cite an example of a move Sony made. It's not like Sony can do this and MS can't. So yeah, you can list a bunch of Sony exclusive content. Over the past ten years, how many titles and DLC's can you name? How much did Sony spend to get them? Then why didn't MS? The fact Sony has secured content doesn't really mean MS should be able to buy a publisher. Only if it's impossible for MS to operate the same way would it then seem fair to let them buy larger than anyone else to make the difference.

If the argument is Sony can get all this exclusive content but MS can't so they need to buy a publisher, sure. But the only thing stopping MS buying 2nd party content is their business choices and/or an unwillingness of content providers to do a deal. If the latter is the case, you'd have to ask why.

3) Sure , MS will just buy up small developers by the dozens like sony does. Sounds great.

That's an exaggeration. Prior to 2021, Sony bought one studio every couple of years. And yes, buying devs for content is potentially a problem if it gets out of hand. But thankfully such acquisitions were fairly few and far between and didn't change the landscape much. Sony's approach has changed since 2019. It'd be better to go back to what it was, and for both companies to work 1) securing 2nd party content and 2) Securing partnerships over the long-term which maybe lead to acquisitions on the back of an established working relationship. Although the very best outcome for gamers is if every game comes to every platform.

4) There has always been an arm race. sony itself has been part of that. I have already listed the amount of studios sony purchased during the ps3 era

It wasn't a race. There have always been studio acquisitions, but there hasn't been a mad race to get as big as possible until 2018-2019. Yeah, you've listed the studios Sony bought, but not those Sony has closed. From 2005 to 2019, Sony acquired 7 studios and closed 8 studios. And those existing acquisitions were already producing fairly exclusive content for Sony for other reasons. Sony was balancing size with profitabilityto not overreach, as is the current business trend for insane investment and massive losses until some-day a golden goose will appear and pay it all off.

Sony bought a lot of studios during the ps3 generation because they needed teams focused on their hardware which was at a disadvantage. ... Looking at Sunset over drive well Sony bought that company.

You've phrased that like a power move where it definitely wasn't. Insomniac was stoically independent for 25 years. If Ted Price finally agreed to join Sony, that's as much because Sony won him over after a long relationship that he liked. Similarly you can point to Sony 'acquiring' Media Molecule, but that studio was made from ex-MS employees, fresh out of Lionhead, who found a positive relationship with Sony and were happy to consolidate that relationship.

Contrast that with Sony's past couple of years, the likes of Bungie which Sony has no 'claim' to (although TBF MS already owned Bungie and Bungie left them!) or a random investment in Savage studios with little to show for itself. Former Sony would have licensed or commissioned Savage to make Sony IP titles on mobile.

I think the bigger difference is MS acquired and then lost/closed a notable number of studios. I think we all recognise that former XB under poor leadership didn't promote positive development environments. That Sony ended up bigger by 2018 was more a fault of MS's business than Sony's buying habits.

5) Well I believe sony makes up 30-40% of the music market.

I'm seeing 20-25%. What are you measuring? But again, if Sony's moves in other markets are as aggressive as this move by MS, they should be regulated, rather than excuse MS and any other big-business consolidations!

I certainly think in terms of what would make an enticing platform would be the worlds largest anime streaming service and the worlds largest music catalog with a sprinkling of Sony's movie / tv content on top imo.

Anime's really niche! As for streaming Sony music, they closed their music portal. I don't know that they have a replacement. They also don't have their own movie streaming platform. Even then, you make a decent argument for MS being allowed to acquire a media company rather than justifying MS's need for ABK.

Distilling it down, AFAICS MS can operate the same way Sony does, without needing to buy a publisher. Until I see an argument that MS can't compete and the gaming landscape is unfairly lopsided in favour of Sony, I can't see a valid reason for this purchase. Unless you believe XB is not a viable platform and gamers don't have a decent choice across the three available platforms, plus Apple et al coming in from the mobile side, it's already in a competitive space and applying suitable competitive pressures on Sony.

I think MS's USP of GamePass plus its more stable ecosystem with better BC and longevity is all the competitive advantage they need. The rest, the quality games it laments not having, would come from MS better managing the studios it has and the deals it enters into with gaming partners.

 

[eastmen]

Over 450 titles have been released on PS5 since launch, PS4 has more than 3.4K titles.

450 ! that is a whole lot of remasters !

 

[iroboto]

Sony have the numbers on game streaming - if it was hugely profitable, they'd be doing it.

Correct, it means its just less profitable currently.

You didn't say lack of investment, you said Microsoft were late to market: "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."

True, this is a fair counterpoint. I should be more concise with the words I used there.

This is because data to support your 80/20 theory doesn't exist. I could believe that the majority of profits on PlayStaton (where there is published financials) comes from a disprotionately small number of titles but 80/20 is mathematically impossible. The number of profits from the 20% would have to be astronomically disproportionate (far exceeding average sales numbers) to utterly abysmal (project loss-leading) numbers of the 80%. The industry would have collapsed years ago.

I agree with this, I used pareto's rule as a concept to explain a model of majoirty of profits come from a disproportionately small number of titles. I agree it's likely not to be 80/20 but more like 40% by a small group of titles.

The numbers you quote or link are mixes of profit but mostly revenue. These are not the same thing. You were talking about profit, not revenue and for the revenue figures you posted its impossible to discern profit.

Yea I have no way to discern profit since they don't separate those things out in such a way. But when we look at profitability for the platform vs the specific service, if the network effects are great enough, perhaps it makes more sense to just look at whether profitability is going up for the platform as opposed to just singling out the different products and services offered.