Activision apocalypse: Sony forecasts $1.5 billion loss by 2027 after Microsoft merger

Cal Jeffrey

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In a nutshell: The acquisition of Activision Blizzard King could set Microsoft up to outpace Sony in the console market. Sony perceives this merger as a significant threat to its console and subscription sectors as it grapples with creating the ideal game subscription.

Microsoft faced fierce opposition in its bid to merge with Activision Blizzard King. It wasn't just regulators that had concerns. Sony was one of the deal's most vocal opponents. It was so boisterous with its protest that Microsoft had to promise to make Call of Duty available on PlayStation for the next 10 years.

Redmond's 10-year concession satisfied all regulators except the FTC. However, documents leaked from the Insomniac hack reveal that Sony is still deeply concerned. The PlayStation maker sees the acquisition as a formidable threat that could allow Microsoft to "leapfrog" Sony in the console market.

"Microsoft's acquisition of [Activision] positions it to leapfrog our current pillars," says a "confidential" presentation slide. "[Activision] provides incredible stratigic value across live service games, scale in mobile, and PC storefront (Battle.net)."

The slide notes Microsoft's effort to build a mobile game store to compete with Apple and Google. Indeed, Redmond plans to launch the store in 2024. However, the Verge notes that its success hinges directly on whether regulators force Apple and Google to open up their ecosystems to the extent that an alternative store has a chance. While we have seen some movement in this direction, it is not enough to allow an Xbox store to thrive on competing platforms.

Sony's rightfully pessimistic outlook forecasts Call of Duty doom in 2027, well before the 10-year promise concludes. It firmly believes the acquisition threatens both the console and subscription sectors. But how is that possible when Microsoft committed to 10 years of Call of Duty?

Sony sees Xbox overtaking PlayStation by weaponizing release timing. While Microsoft promised 10 years of Call of Duty, it did not specify that launches would coincide on both consoles. It sees Microsoft using that "exclusivity" period to advance its subscription dominance by putting Activision games on Game Pass "day and date" (day one).

"[Microsoft's] comprehensive ecosystem coupled with exclusivity creates greater dominance," another slide said.

Sony beancounters predict a massive threat to Sony's recently restructured PlayStation Plus that could lead to a $1.5 billion shortfall by 2027. Sony admitted that its "pillars are already dated and behind the competition." In other words, PlayStation's past dominance led to complacency, and now Sony feels threatened by a major brand being removed from the table.

It now has an urgent need to expand its offerings. However, the company struggles with finding the "perfect game subscription." Players expect free best-in-class games for a monthly fee, but Sonny feels that is an "unsustainable" model. It claims it cannot see a return on investment for premium games with reasonable "monthly and incremental" subscriptions.

Another weakness is that, unlike Xbox, PlayStation does not have a "unified mobile, PC, console experience." Sony has no solution for this shortcoming other than a continued focus on a "premium sales model." However, that would be the status quo for PlayStation, and from the sound of it, even Sony doesn't believe that will be enough.

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:D I always love when the market leader cries about the "threat" of competition. Yeah, a threat to you, and a win for us, customers.
Really where is the win for us customers? They will still charge "us customers" for micro transactions in their games. For us customers, it doesn't matter who owns it. So long the game is good and entertaining. Far from what Call of Duty has been the last few years.
 
Really where is the win for us customers? They will still charge "us customers" for micro transactions in their games. For us customers, it doesn't matter who owns it. So long the game is good and entertaining. Far from what Call of Duty has been the last few years.
I cant say for sure its a win but it could be one. Sony is now forced to focus on things it should have been focusing years ago. But they got complacent. Maybe they will figure something out.
Not everyone does or will like CoD but it makes $$$ and its why MS went after them. Plus it may one day give them a big foot into mobile. Time will tell that story.
 
Really where is the win for us customers? They will still charge "us customers" for micro transactions in their games. For us customers, it doesn't matter who owns it. So long the game is good and entertaining. Far from what Call of Duty has been the last few years.
More choice is always better for the customer. People vote with their wallets. Pick the service you like best and go with it. If it was up to Sony they would be the only service available leaving you with no choice. No wonder they were fighting the MS/Blizzard merger tooth and nail. A company that provides the best service at the most reasonable price has nothing to fear from competition. Yet Sony is deathly afraid of any kind of competition, so what does that tell you about them?
 
More choice is always better for the customer. People vote with their wallets. Pick the service you like best and go with it. If it was up to Sony they would be the only service available leaving you with no choice. No wonder they were fighting the MS/Blizzard merger tooth and nail. A company that provides the best service at the most reasonable price has nothing to fear from competition. Yet Sony is deathly afraid of any kind of competition, so what does that tell you about them?
SONY does not afraid of competition, SONY and game users doesn't like MONOPOLY. Microsoft does not compete, Microsoft wants to establish a MONOPOLY. Like the shitie EA who destroyed gaming industry.
 
Poor Sony, that merger is not what made me cancel PS Plus Premium. Their greedy price increase did. I also cancelled Game Pass Ultimate after MS price hike.

Both are now overpriced for what they offer. And reality is you own nothing when not subscribed on either service. The value is just diminished now.

So let me call them a waaaambulance for that perceived loss, which is really just loss of projected revenue, not actual losses. (We could be richer!)
 
Well maybe SONY should be focusing more on making good competing games, like Resistance fall of man, or KillZone, instead of whining about MS and censoring games thus pissing off your home market.

Their first party library has royally sucked in the last decade. Look at the buffet of neat titles for the PS3, compared to the "action adventure with walking sections" that plagues the PS4/5. Sony grew fat and lazy on the success of the late PS3 software sales, and the sales of PS4 era software.
 
Sony desperately needs a FPS brand on PS5. The only solution is Battlefield after acquiring EA. They have to acquire EA or they are doomed.
 
Another weakness is that, unlike Xbox, PlayStation does not have a "unified mobile, PC, console experience." Sony has no solution for this shortcoming other than a continued focus on a "premium sales model." However, that would be the status quo for PlayStation, and from the sound of it, even Sony doesn't believe that will be enough.
And I don't feel sorry for them on this point at all (specifically PC). They've been dragging their feet here, and trying to double dip as much as they can.

And I still haven't forgotten how big of an obstacle they made themselves for cross-play...
 
I am honestly baffled by that that only one game is such a industry game changer ... come on. I have only one friend that actually plays CoD. Is MS be same strong if they had only CoD but no other games? nope. Sony has much more high quality IPs and many more to come. The threat is that it is MS and they want monopoly as one guy said above. They do not care about clients or anything. It is MS crap and they should not get it.

As for the price of Ps plus, come on guys, all prices on everything went up and ps plus is the last to do it. Why do you think the devs of those games does not deserve it. The sub is not only for sony but goes to devs too.
 
"our pillars are already dated and behind the competition"

Yep, sounds just like a MicroSludge product!
 
Would be nice if sony quit crying over cod like a forgotten lover and instead made some decent competition.

Mag, Killzone, Resistance, Socom and probably some I've forgotten about, all old famous games that would make a killing if it came back, but nope, they'll probably just redo the last of us again.

shoot, destiny is on its last legs, give bungie one of those old series and see what they can do when they get unleashed from gaas nonsense.
 
Hey Sony......I hear you've been working on deals behind the scenes to make other Marvel characters (besides Spider-man) exclusive to the Playstation, including the X-Men, etc....
 
Hey Sony......I hear you've been working on deals behind the scenes to make other Marvel characters (besides Spider-man) exclusive to the Playstation, including the X-Men, etc....
It is a good time to do so, considering quickly falling interest to these characters in movies.
They probably can be asked to pay realistic price comparing to the end of Avengers era and entire world watching Marvel movies.
 
Microsoft is an ***** to try and get into mobile market again....
They will never penetrate Google or Apple. Period.
 
I am honestly baffled by that that only one game is such a industry game changer ... come on. I have only one friend that actually plays CoD. Is MS be same strong if they had only CoD but no other games? nope. Sony has much more high quality IPs and many more to come. The threat is that it is MS and they want monopoly as one guy said above. They do not care about clients or anything. It is MS crap and they should not get it.

As for the price of Ps plus, come on guys, all prices on everything went up and ps plus is the last to do it. Why do you think the devs of those games does not deserve it. The sub is not only for sony but goes to devs too.

the entire franchise (total) has sold over 400 million copies. its the most profitable gaming franchise in history.
 
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