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Call of Duty and mobile marked as threats.
Image credit: Activision Blizzard
Sony has privately described Microsoft’s $68.7bn takeover of Activision Blizzard as a potential “leapfrog” moment for its long-term console rival to take the lead.
Threats identified by Sony include Microsoft using Call of Duty to “disrupt and threaten console gaming and game subscription markets”, with a potential “massive threat to PlayStation Plus”.
Sony has frequently expressed its concerns about Microsoft’s Activision Blizzard takeover in public and in private. Today brings more detail on how exactly PlayStation believes Xbox will benefit from the buyout, via Sony company slides included in the Insomniac Games hack, which include detail on how Sony itself can respond.
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“Activision provides incredible strategic value across live service games, scale in mobile and PC storefront (Battle.net),” Sony wrote, describing the various advantages Microsoft has now added to its portfolio with the deal freshly completed.
Call of Duty remains one of the most popular gaming brands in the world, with annual premium releases and the ongoing Warzone live service battle royale. Activision Blizzard also, of course, owns mobile gaming giant King, home of Candy Crush, which rakes in billions of dollars in revenue each year. The company also runs Battle.net, the popular launcher home to various Blizzard games on PC.
In addition to all of that, Microsoft has now stated it is building a mobile gaming store to compete with Apple and Google, as part of a bid to grow the audience of the Xbox brand to more devices.
Sony identified all the above as having the potential to “leapfrog our current pillars”, which are “already dated and behind the competition”.
Specifically, Sony states it is concerned over the potential impact to PlayStation Plus subscriptions, which generate more than $1.5bn of annual recurring revenue.
Microsoft is widely expected to include new Call of Duty titles in Xbox Game Pass when Sony’s current licensing deals with the shooter franchise expire – something that will obviously draw people in.
Sony also currently pays to ensure select Call of Duty in-game content launches first on PlayStation – and while Microsoft has said it won’t do similar in future, at the very least Sony will lose its ability to leverage this itself.
How does Sony respond, then? The document states that the company must “expand” – although whether this means acquisitions of its own is unclear – and maintain its current model of premium game sales as a “central approach”.
Far from the suggestion that Sony will launch its titles in PlayStation Plus on day one, as Microsoft does with Xbox Game Pass, Sony describes the “perfect game subscription” service as “elusive”.
The “expectation of free, best-in-class games creates [an] unsustainable model” where subscription fees don’t cover investment, Sony wrote, defending its decision to focus on full-priced big-budget game launches.
As for Microsoft’s ability to launch an all-encompassing Xbox store across consoles, PC and mobile, Sony said a unified experience simply “doesn’t exist” as form factors and power differentials are “too diverse”.
Microsoft finally completed its Activision Blizzard takeover in October, following a marathon process of regulatory approvals and legal wrangling that lasted almost two years. Xbox fans can expect the first flurry of Activision games to hit Xbox Game Pass at some point in 2024.
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