Sony Cannot Answer "The Death Star" Microsoft Is Building For Xbox

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This is exactly what most cannot see. A very large plan is unfolding and this is just one small part in it

Sony shares dropped sharply yesterday when it was revealed that its biggest competition in the console space, Microsoft, bought Activision Blizzard for nearly $70 billion, potentially harvesting away a large portion of valuable games in the long term like Call of Duty, Overwatch and Diablo.

After the sale, there have been many cries from gamers that Sony needs to do something to “answer” Microsoft with a purchase of their own. But whichever side of the console war you may find yourself on, at this point, with Microsoft gifting blank checks to its Xbox division, these are no longer two entities that are directly comparable.

And yet, that doesn’t mean Sony is “doomed” either, and that should not be the takeaway narrative. In fact, presently, their gaming division has never been doing better. It’s complicated.

To start with, Sony simply cannot make purchases anywhere close the scale of what Microsoft is doing here. Even before this, Microsoft’s $7.5 billion purchase of Bethesda seemed like a massive move they couldn’t match. Now a $70 billion purchase of Activision Blizzard? There is nothing, not a thing, Sony can do to make a wave anywhere close to that big.

A purchase at that level would have to be something like EA, Ubisoft or Take-Two, which seems flat out impossible for a company about 7% as big as Microsoft (a $150 billion market cap versus a $2.2 trillion market cap). And a very large “middleground” purchase by Sony, say, Square Enix, Capcom, From Software, Kojima Productions still would not matcheitherthe Activision Blizzard or Bethesda purchases Microsoft has already made.

Similarly, I don’t think Sony can hope to match Game Pass as an entity either. We know Sony has plans to bolster PS Plus, potentially combining it with PS Now to offer more features and games, but it still seems exceptionally unlikely that Sony will offer its high profile exclusives on day one, something that is the core tenet of why Game Pass is so attractive. Sony absolutely wants to those tens of millions of sales, and has effectively doubled down on the idea by raising game prices $10 this generation. They view it as too much of a risk to do what Microsoft has done, and if they did, there would be no going back.

Finally, Sony does not have the native infrastructure to build the kind of cloud streaming network Microsoft is assembling for Xbox games. Only companies like Microsoft, Google and Amazon have that power, so it requires partnering with a third party, and they’re already pretty far behind where Microsoft has gotten to.

And yet, again, things are going great for Sony.

This past year, the PlayStation 5 would have been the fastest-selling game console in history by a wide margin, were it not for supply shortages. Their first party offerings have not dipped in quality for years, and the PS4 generation was capped off by The Last of Us Part II winning more GOTY titles than any other game in history. Sony has a massive collection of must-play first party titles while Microsoft is just starting to build up that kind of roster.

But there’s now, and there’s the future. Sony may end up feeling like Blockbuster if Microsoft keeps expanding its Netflix-like Game Pass, and the $70 price point already feels like a backwards move. The cloud as a way to expand access to gaming, in addition to Microsoft putting games day one on PC, also feels natural, and like something Sony is resisting. To me, it’s these things, not necessarily Microsoft’s mega-studio purchases, they need to be more acutely aware of. And really, Sony cannot make those kinds of buys anyway, so there’s no point really even debating about whether or not Sony should buy Ubisoft or Take-Two to “answer” this move. That isn’t the battle they can win.

I think Sony is perfectly secure for at least this entire next generation, barring any unforeseen disasters. But Microsoft is building something absolutely massive, and at some point, it does seem like Sony may end up eclipsed if they don’t figure out a way to move in the same direction.

O Sony is done. Theyll be third party by the end of this gen. Thell never be able to compete. And its just starting.

Remember how fast the Walkman disappeared.

MS doing to Phony what Phony did to SEGA!!

What goes around comes around. :P

They'll survive . They will continue to dominate the next couple years but MS is looking 5 -15 years out. MS is just raising the price to compete as well as positioning themselves to take the US - Western market from Sony.

I wouldn't be surprised if MS buys EA /Take two interactive in the next 5 years. They're clearly executing a plan systematically. The Activision deal was brilliant because they also get King software which is huge in mobile.

That's right. I'm a huge Sega fan but Sony came in and out muscled them. Sega didn't have the money to compete.....

@ttboy: Neither did Nintendo, thats why they had to take a step back. Now Sony is getting what they deserve. I how Microsoft eats them alive.

Assuming that the Activision deal does not get blocked, MS will never be allowed to buy another giant publisher.

@rmpumper: Why would you think the deal would be blocked? What grounds? Please don’t say “monopoly”, because that would mean you don’t know the definition of the word.

You don't have to form a monopoly to be blocked from making an acquisition. Just having too much control is enough. If regulators feel that MS would have too much control over game publishing they could block it. I don't see that happening but that would be the grounds.

Hmm. let's see, Microsoft bought a bunch of well known IPs that are either outdated or have been getting mediocre reviews for a while. Not really that impressed. Prior to this announcement, COD was regularly shat on in SW.

um nin screwed sony because the ps1 was niin system but turned down sony at last min.

@SolidGame_basic:

lol :P

That damage control.😂

sega screwed themself. love how xbox comes in and survived. nin screwed sony over and still managed to survive.

sega started making poor choices. not making games that was on par with genesis. they started to get lazy.

Y'all do know the Death Star was blown up, right? Twice... Might want to find a better analogy

😂 TC has been owned.

@gifford38: Sony tried to bully the little man and steal their rights. Now theyll get destroyed. Its karma baby. They deserve it.

Look at its sales. For the casual gamer its still the best selling shooter on the market. I believe COD is Sony's number 1 selling 3rd party game (or very close)

Here is the proof

Yes,Call of Duty: Vanguard, despite only being on sale for the final two months of the year (it came out November 5), outsold everything else on PlayStation and Xbox. The second-best-selling game of 2021?Call of Duty: Black Ops: Cold War, first released in 2020. As of today—well, once the $68.7 billion deal is approved by regulators—theCall of Dutyseries will be a first-party intellectual property owned by Microsoft.

Overwatch is still very popular (I'm amazing at it FYI) even though its been out for a long time. There are just too many IP's that Activision owns that are popular with Western gamers. Basically MS is starting with the West then Eur and then Japan. For Europe the only need Fifa and F1 lol

Yet 2 COD games charted in the year end NPD's... In first and second place... NEVER use SW to gauge public interest and opinion. This place is for niche opinions and discussion. It almost never reflects the real world perception of gaming.

Probably won't. It only makes MS the 3rd largest publisher. When they buy EA then I could see the European's blocking it.

Damn, schooled consecutively because of weak damage control. 😬

so now nin was the little man back then? they deserve it? did they deserve the fact nin turned them down last min with the ps1?

so explain this little man? nin are the ones that made it hard for third party to make games for nin system having to pay huge money just to put there games on the system.

how about you learn the history of gaming before you say stupid things like this.

if sony did not come in when they did nin would of made the games crash like atari did.

look up the history of nin and why third party flocked to sony system.

sega was almost out before ps1 came along. by making 3do like games.

@ttboy: That's not what happened to Sega 😂. They screwed themselves over and over again with the 32x followed up by the weak ass early launch of the Saturn, they lost the gamers and the developers all by themselves. The Dreamcast was great and ahead of it's time and in many ways, but it didn't have the support of many 3rd party developers and what little it did was forgotten about by the hype of the PS2. Sega killed themselves.

Actually, MS bought a massive staff that is extremely talented, and they are bringing in BILLIONS in revenue.

well, to be honest, I think everyone should be thankful that things went the way they did with nintendo. If nintendo went with discs for the n64 instead of cartridge, either by using sony or going with someone else like panasonic, then sony would not exist. Nintendo was so far ahead of the playstation with the n64, they had 3d gaming, they had analogue stick for modern fps game play. If they had discs too, then pretty much all the games you know, ff7, resident evil etc etc would all have been on the n64.

So sony is alive today because of nintendos choice that one day 30 years ago. We can say its for the best now because there were a bunch of great games released on the playstation consoles over the years, and gaming has been all the better for it.

Edit: I also find it ironic, but now sony is in nintendos shoes 30 years ago. They are resisting the change to digital, and subscription based services because they want to stick with their $70 per game physical disc model. MS is investing in the future. Who do you think will win?

Another ironic twist is nintendo, the same company that refused to go to cds 30 years ago, is now the biggest digital game console on the market with the switch. Though now MS might be in the lead, nintendo isn't slouching either.

Its almost eye opening watching this stuff happen in real time.

@goldenelementxl:

32X and Saturn weren't great (owned both actually). Saturn was good but rushed and had design issues. The point though was that both Nintendo and Sega knew that Sony was much bigger and it would be difficult to compete from a money perspective. This was discussed many times back then. It made Sega overreact and push the Saturn out early etc

Phil finds your lack of faith disturbing....

Kudos to you both, good chuckles. ;)

I don't think they will have the purchasing power to do anything close and anything big to combat the MS Activision-Blizzard acquisition will need to be a mutually beneficial collaboration.

I feel if Sony wants to keep pace they need to make a deal with a digital distributor to bridge the console/PC ecosystem, and really the only path I see capable of achieving this is: (1) Sony makes deal with EGS to make their first party games exclusive to the platform on PC end (2) Sony and EGS will combine their leverage to make EGS/PS timed exclusivity deals with third parties as they often make very similar deals anyways and can have far more leverage working together (3) this move will allow cross platform entitlement and cross-play and cross-system progression (4) this move will allow for broader access to the PS Plus/Now overhauled subscription service so Sony can expand its subscription model beyond console hardware (5) they offer their first party games to the subscription service day one and will have PS/PC simultaneous releases (6) their focus on bolstering their BC catalog availability will allow Sony ability to make its legacy games accessible beyond console hardware for first time and there's lots of it to make a killing on.

Such a move is the quickest way I see Sony closing the ecosystem/service gap. I think Sony who might have laughed at the idea of needing to do anything to respond to Xbox realizes finally they need to do more than they're capable of doing alone. And I am sure EGS would play ball as they seem constantly trying to bring more people into their distribution service and this would bring millions more.

@Zero_epyon: Yes, that would be reason. But as you say, ms buying Activision isn’t cause enough for the deal to be blocked….they’ll still be 3rd in terms of revenue.

LMAO !!!

Anyways ... apparently some folks were thinking that Sony wanted to buy Capcom or Square as a way to leverage, but IMO they both pale in comparison, i don't know that Sony's plan is, but they need one.

They'll throw out a few movie games (the ones they stole studios to get btw) every few years for the casuals and woke reviewers to eat up and pretend everything is going well.

Epic ? I almost forgot about them. You can bet that Phil already has them in the top list to be acquired. MS and Epic are already close and they probably want Epic's unreal tech to add to their line up.

Back to your idea. Its ok, however Sony's problem isn't a game store. The real problem is cloud computing and infrastructure. Only 3 companies in the world have the infrastructure to do what MS is doing on a global scale (and MS is one of them lol). Sony is already using MS Azure but you still need to build an infrastructure on top of it. Its not a matter of just spinning up some VM's :)

Sony would probably be better partnering with Google to give them the platform they need to scale globally.. Unfortunately AWS and Google have their own plans for gaming.

Indeed. Very well played by both. 😂

Sony is likely not going to play the same game as Microsoft because they can‘t. I don’t expect them to buy square Enix or capcom in the near future. They will continue to make deals with companies to make their games exclusive to playstation consoles. They will also continue to buy smaller companies they have a relationship with. I only expect Evo like deals in the future for Sony.

Probably right. I do see them trying to lock up exclusive partnerships but thats not cheap either. Problem is that Sony's budget is measured in Millions while MS's budget starts in the Billions.

The Megaton for Sony is to allow Gamepass on PS5/ future systems :) .... If Gamepass gets over 100 Million + subs they'll probably have to

@ttboy: I don't think MS will try buying Epic, just because right now MS can justify these acquisitions as necessary for growth of its gaming business, and right now they don't have a very big slice of the console market so they can avoid antitrust reviews of these acquisitions. But if they try getting Epic I imagine Valve/Steam is going to make a big stink about it as they are competitors of EGS and they already made a ruckus when MS added the Windows Store to the OS and I don't think they want a repeat of that. Could be more beneficial too if Sony partners with Epic that Valve/Steam could end up reaching out to partner with MS to bridge aspects of their ecosystems as well which would be a softer approach.

On the aspect of cloud server capacities I actually think it would be better for Sony to focus on local support (ability to just download and play) and partnering with a digital distributor would be better than building a larger streaming infrastructure. Sony already has streaming capacity with PS Now and it is available on PC but the service isn't gaining any ground there, so a pivot to local play through expanding digital distribution could provided an avenue for growth across a shared PC/console ecosystem. They will of course need an overhaul of their existing cloud service infrastructure to make it work. Also I believe it was reported sometime back that Sony has actually started utilizing MS's cloud infrastructure to handle the load on some end so there are services the can outsource to for what they can't build themselves, or buy them time while they try building their own.

Valve will probably complain for sure. I don't know if MS will care. They're probably not happy that Valve has so much power with Steam anyway. I think they want to control the entire funnel for PC gaming from selling to monetizing. Owning Epic shouldn't be an issue since Valve owns the market.

From a tooling perspective its probably not ethical but its the same as Nvidia owning ARM. They would probably allow unreal engine to be used by anyone. From a strategic perspective I think Epic is near the top of their list of companies to own.

As for Cloud, Sony is ok in the short term. They can do what you suggest. In the long term its an issue. Cloud development isn't static and won't be the same in 10 years. There will be features MS/Google/AWS develops that they will not give to their clients. Think about AI - Machine Learning - Physics - Heavy computational work that eventually can be handled in the cloud at 60fps.

LOL! Lems are pretty much the clonetroopers of gaming

@ttboy: true, it is probably much better on cloud end Sony collaborate with Google or AWS than be a client, but it's harder to imagine how they can compliment each other's services in a mutually beneficial way, Google doesn't have a service store (in the traditional gaming way) and Amazon Prime membership I just see problems potentially on how they'd split revenues, but then again collaborations don't just have to be between two partners, maybe Sony could best add AWS to such a deal by offering Prime video and music services access to their substantial catalog of movies, TV, and music, I can see that working as a means of also bridging subscription bases and that would be huge

@ttboy: When demand outpaces supply, who is selling more is dumb.

Both consoles are a hit.

The PS5 is not going to start sitting on shelves because of this.

Microsoft should just buy Sony and get it over with already. The ps5 is already looking more and more unattractive, but this activision / blizzard purchase makes it damned near useless.

What if Sony and Nintendo formed the gaming industry version of the Rebel Alliance? By the way, the Galactic Empire's Death Stars were destroyed because the Rebels were able to find a weakness in their designs. Microsoft's rivials will find a weakness in the company to exploit which will prevent it from being unstoppable.

It's still going to be a very attractive console for millions of people but sony definitely needs to diversify their lineup a bit if they want to compete against Microsoft now.

@onesiphorus: Microsoft and Nintendo already found Sony's weakness. We bleeding them dry now.

@ttboy: "a company about 7% as big as Microsoft (a $150 billion market cap versus a $2.2 trillion market cap)."

Just how good/bad Sony's other divisions are doing?

"Sony has a massive collection of must-play first party titles while Microsoft is just starting to build up that kind of roster."

20 years and their now just starting?

I'm so glad to see how Phil Spencer brainwashed his own community and turned them into an Xbox monopolists fans

Xbox is now a monopoly?🤭