Sony worried about Activision Blizzard acquisition

Sony has spoken out about the acquisition of Activision Blizzard from Microsoft and is clearly concerned.

Sony is telling regulators that it’s not possible to develop a triple-A franchise that can compete with Call of Duty and that it would take years to compete with Xbox Game Pass, but let’s start from scratch.

Microsoft is buying Activision Blizzard, which is the biggest news in gaming history for the current generation of consoles to date. The takeover should be dry and dry by July 2023 and various test procedures have already been initiated in various countries.

The supervisory authority in Brazil is particularly open and relies on transparency. This means that everything is visible, including the companies surveyed and their answers, with confidential details blacked out.

Idas, a member of the Resetera forums, has now taken the trouble and collected some interesting information. You can find the full article here.

Idas announces in advance: “I have prepared a summary of the questions that were asked of the third parties and their answers. The original documents are in Portuguese, but I’m a native Spanish speaker so they’re easy to understand (google translate was very useful too). I have also practiced IT law as a lawyer for almost 14 years, including M&A litigation (so I know these things).”

According to the report, numerous companies were asked what they think of the acquisition and Sony, of course, as a competitor to Microsoft, has expressed its concerns extensively.

Idas translated Sony’s response:

“SONY: You say that from a development/release perspective, game development typically involves an early, platform-neutral phase before the game is adapted for one or more specific platforms.”

“In her opinion, all games compete for player engagement. Players choose their gaming platform based on price, technical features, and available game types. The content available is the most important factor in choosing a platform.”

“They say there are few barriers to entry when developing and publishing games for PC. Only one developer can create an indie game and distribute it online, but developing a top-tier AAA game (like Activision’s Call of Duty) requires a budget of hundreds of millions of dollars and thousands of employees.”

“They say that there are few developers/publishers capable of producing AAA games besides Activision, such as EA (FIFA), Take-Two/Rockstar (Grand Theft Auto) and Epic Games (Fortnite). These games tend to be long-lived franchises with big budgets, multi-year development cycles, and large fan bases.”

Despite all of this, Sony believes that none of these developers can create a franchise that can compete with Activision’s Call of Duty, which stands out as a distinct gaming category. That’s why they believe Call of Duty is so popular that it influences console choice. In fact, their network of loyal users is so ingrained that even if a competitor had the budget to develop a similar product, it would not be able to create a rival.”

“They talk about the time, money, staff numbers, millions of followers, revenue and other data related to Call of Duty to show that it is a unique franchise that cannot be replaced .”

“You agree that subscription services compete with games that are purchased for a one-time fee. However, they believe that the low initial costs of subscription services could be anti-competitive compared to publishers who recoup significant investments in games by selling them for an upfront fee. They also believe that this could hurt consumers because the quality of the games will drop.”

“In the last five years, Game Pass has captured about 60-70% of the global subscription services market (in Brazil, that market share is even bigger, where Game Pass accounts for about 70-80% of the PC subscription services market there).”

“They believe it would be several years before a competitor — even with significant investment — could create effective competition for Game Pass.”

“Call of Duty represents a major revenue stream for PlayStation (data has been provided but has been redacted) and is one of SIE’s largest revenue streams from third-party providers.”

It remains to be seen to what extent Sony’s statement – which itself has just taken over Bungie with Destiny – will have an impact on the takeover of Activision Blizzard from Microsoft.

Of the other companies, Warner Bros., for example, has not expressed any concerns. Ubisoft is also neutral and believes that there is no video game that does not have some form of direct competition. Bandai Namco said something similar and added that the competition for Call of Duty is getting stronger and bigger, with games like Valorant, Battlefield and Destiny being mentioned.

Riot Games added a whole list of Call of Duty competitors: Apex Legends, Rainbow Six, Battlefield and many more. Likewise, even games like Candy Crush have direct competition: Cookie Jam or Bejeweled were listed here.

Apparently, Sony responded with the most negative response to the poll, while Amazon, Apple, Google and others have not shown much interest, while Warner Bros., Ubisoft and more have no concerns whatsoever.