Why are you putting Microsoft's results on Sony as if things would be in a similar state if Sony acquired the studios & publishers Microsoft have? That doesn't make any sense, it's like you're intentionally ignoring the actual results Sony's acquisitions have historically fostered, versus Microsoft's. I understand your concerns being expressed here but even you seem to indicate an understanding of the results Sony have gotten with their acquisitions compared to Microsoft.
I'm just comparing the result of both console makers making acquisitions.
Sony focused on acquiring talent and MS focused on acquiring brands.
It did work way better for Sony, the studios got more successful than before their acquisitions and did help Sony grow in some areas. While MS bought some big brands that didn't shine as before their acquisition (Halo, Gears, Rare stuff etc) or didn't manage well the talent they acquired -like putting Rare to make Kinect Sports and so on-.
So my point is that seeing these results, Sony's strategy seems to be better.
What makes you think Sony would suddenly fumble and struggle to get results if they also targeted a larger 3P publisher for acquisition of both talent and notable IP?
The opposite, I say that the reality is that Sony is the market leader in console and his distance from MS is so big that they don't need to react to the Bethesda and ABK acquisiton by acquiring big publishers, because these publishers represent a very small part of the market and won't change much the Sony vs MS competition.
And if they would want to do it and had the budget to try to get EA, Take 2 or similar they could face bigger troubles with regulators than MS had. Because Sony is the clear market leader, have way more market power in everything related to consoles, which means that in the eyes of the regulators, the same move made by Sony and MS would be seen as more anticompetitive and abusive in Sony's case.
Then the regulators would be idiots. Because that's them operating on an idealistic interpretation of how these markets work, instead of the reality. Their way of viewing a maturing market like gaming WOULD have been suitable if this were in the '90s or whatnot, but we are dealing now with Big Tech companies actively leveraging the massive market strengths in non-gaming markets, TO buy their way to bigger market share in gaming.
You cannot ignore the connection there nor act like one isn't actively enabling the other!
Yes, both are major tech companies. And are free to make acquisitions as long as they do it in a fair way, without monopolistic or abusive tactics.
You're wrong about all of this, because we have regulators like the CMA & FTC who are actively looking at the ABK acquisition from the POV of Microsoft as a total corporate entity leveraging their full corporate weight to make potentially anticompetitive (or anticompetition-enabling) moves in the gaming space with acquired assets. Why do you think the trail has also called into question cloud concerns? Why do you think those cloud concerns have also involved Azure? No not "Azure" as in simply Azure's presence in the gaming market, but Azure as a whole being used for enabling a facet of Microsoft's gaming division in ways potentially unfair to direct competitors?
If some of these regulators were doing as you described, we would not see cloud SLC arguments being infused with console SLC arguments. Even if they are different, unique markets, a competitor with significant resources & vertically integrated power in both can leverage one to unfairly empower the other, and that's particularly true in Microsoft's case because they have a history of such tactics.
No regulator raised any concerns about cloud market, which isn't related to videogames but to general servers services instead.
They raised concerns about cloud gaming potential future and the asshole tactics MS had in cloud gaming like letting them have CoD for some years but without paying them the 30% of the game and DLC sales on that platform and instead giving them 0%.
As far as we know none of the cloud gaming rivals need or use Azure servers.
No, this is a dumb argument. You're unironically expressing talking points Xbox fanatics have been using to downplay any attempts by Sony to make another publisher acquisition.
It isn't a dumb argument, it's the explanation of how market regulators work. Market regulators take care that companies with too much market power don't make monopolistic abusive actions to prevent others being able to compete against them.
So in a market where someone has >66% of the console market share and other has <33% market share (global, in EU they are 80% vs 20%) they are more strict with the one who is the clear market leader. Because an acquisition that represent around 4-5% of the total (not only console) gaming market -as ABK- when it's done by the one who is the clear market leader it hurts a bit the competition while when done by the one with less market share it improves competition.
You don't seem to understand that "fair" monopolies do in fact exist.
A monopoly, technically speaking, is simply any competitor in a space with 51% or more of the market share in that space.
Wrong, go to a dictionary to see what a monopoly is. To have over half of the market share is having a majority of the market share.
A monopoly is to have all or almost all the market share to a point where they are gatekeepers of that market, their market power is so big that they can take monopolistic actions to prevent others compete against them.
Market regulators are supposed to fight that. Monopolies and monopolistic actions can't be fair. They are always bad, and this is why there are regulators to avoid them in all markets.
But you can achieve that simply by either offering a better competitive product that the market's customers reward your efforts with (fair monopoly), OR by performing anticompetitive practices that harm direct competitors and in doing so happen to put you as market leader (unfair monopolies).
Wrong, you just made up that. I explained what monopolies are above.
To grow by focusing on investing on making your existing products better to a point they are better than the competition is organic growth. To grow by focusing on acquiring other people/products of that market that someone else made is inorganic growth.
Both are fair ways to compete and grow and they are welcomed by regulators, as long as these acquisition doesn't mean the creation of monopolies (removing/blocking the competition in a market) or allow them take monopolistic actions (actions of someone with enough market power that block the rest of being able to compete against them).
Regulators don't care for monopolies if they are earned through fair competition,
The don't care if someone gets the totality -or almost- of a market through fair competition as long as that player doesn't take actions that prevent others to compete there (monopolistic actions, something market regulators are supposed to fight).
but fair competition suggests the end customers of that market choose that product,
Not true, exclusives always existed everywhere (not only in gaming). They play an important part on competition.
How is Sony buying a publisher an anticompetitive action? Just because they're in 1st place? A 1st place they earned by competing the best in a fair market, BTW? You are effectively punishing them for their success and that regulator would be rigging the market to force a balance instead of letting actual competition play its way out. The regulators (or in the context of this FTC trail, the judge) would be stipulating the existence of an unfair market by punishing a competitor for being "too good" and artificially letting another competitor boost up to a level not based on the merit of their performance in a fair market, because they weren't good enough.
That is antithetical to the very idea of actual fair competition.
And yes, I know some people would try turning this into an argument for Microsoft, that if they get ABK denied they are being "punished" for their success as a corporation. But there is a massive difference, IMHO. Microsoft's "success" is in markets completely aside from gaming. Their gaming market performance is not enabling the ABK acquisition, so if the deal is denied, they aren't being "punished" for anything outside of maybe being an underperforming competitor in gaming. But you don't actually compete by purchasing big 3P publishers and fusing their revenue to your gaming division's as a stimulus for growth, especially with money and market valuation that doesn't come from your gaming division.
If in Europe the high-end console market share is 80% PS and 20% MS, the acquisition (and potentially making their games console and gamesub exclusive) of a company that represents the 5% of the whole gaming market revenue improves or damages the competition depending on who buys them.
If bought by the ones who have 80% it would make way harder to compete with the market leader and that would help them closer to get a monopoly. If bought by the ones who have only a 20% market share it would improve the competition, making easier to fight against the market leader.
And if they did what you suggested in terms of investing in smaller entities for their talent, while ALSO investing in or acquiring larger entities like a 3P publisher...they still wouldn't (or shouldn't) have an issue with regulators.
They should have issues with regulators if the acquisitions imply unfair monopolistic actions / tactics or if these acquisitoins reasonably lead to think they will create a monopoly (getting mostly all the market to a point it makes others impossible to compete against them).
Again, some of these regulators are already taking Microsoft's full corporate power into consideration of "just" a gaming acquisition.
What they took into consideration is if this acquisition and its potential consequences creates a monopoly or involves monopolistic actions that damage competition in this market (gaming) and related submarkets (mobile, PC, console, game subs, cloud gaming). Since consumers are benefited from having good competition, they are supposed to defend it.
After watching all the evidences and market data, all of them were ok with the acquisition, with the exception of CMA who blocked it for its potential effect on the hypothetical case of cloud gaming market getting meaningful in a distant future, and the FTC (who thinks "MS could withhold or degrade Activision's content in ways that substantially lessen competition including competition on product quality, price and innovation. This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry").
They'll do the same with Sony, yes, but Sony can easily point to the merits of PlayStation unit's own market performance historically, its profits and revenues as well as market strengths thanks to providing the best solutions that the market preferred to purchase & work with as a result, as counter-arguments.
This doesn't matter. What matters is if an aquisition meaningfully damages competition in a market or not, and if there are monopolistic actions involved or not.
They can also point to what a significantly larger corporate entity who is a direct competitor in the console gaming market (Microsoft) is already doing and already intend to do with acquired 3P content/assets to leverage against them, acquired assets in MS's case purchased on the strengths of them mainly outside of gaming market performance merits.
In essence, Sony can do both. Even if they run into some poorly-defined challenges from certain regulatory bodies or (if it gets to that point) judges, they can easily explain around them.
Console makers acquired 3rd parties and made them exclusive or moneyhatted 3rd party games make some of their games exclusive since almost 40 years ago.
This isn't an issue as long as these acquisitions represent or affect a small enough portion of the market to don't meaningfully affect/block competition.
Have you literally just ignored the emails with Phil Spencer confirming they intend to make all new Zenimax games Xbox console-exclusive, despite promising case-by-case to regulators for approval of that acquisition?
No. I assume they may face legal issues for lying to regulators and investors. And after reading that mail I assume that their plan for Zenimax and ABK is to make all their games console and game sub exclusive as soon as their existing deals with Sony and the others expire.
But I know that ABK represents now a 4-5% of the gaming revenue, and will be way, way smaller once they stop releasing their games on PS and start giving them away on GP day one on XB and PC. Same as Zenimax, whose market share was way, way smaller. I think after all this happens ABK+Zenimax will only represent 2-3% of the whole gaming revenue combined.
I think that even if they would manage to acquire ABK (including CoD) and make all Bethesda and ABK games console and gamesub exclusive it wouldn't meaninfully change the market because most of the games sold in PS and Switch aren't made by them and around 90%+ of the PS MAU don't buy the yearly CoD games. And if they go exclusive, most PS CoD players will continue in PS.
Just because Sony are 1st in the console gaming space doesn't prevent them from choosing a similar strategy, when they're dealing with a much larger corporate competitor, and have earned their 1st place spot on the merits of their continuous value & quality offerings to gaming customers, developers and publishers as well as retail and distribution partners.
Did Sony cheat to get that better hand? Did they rig the deck? Did they steal money to play with it? No. So whether they have more chips, and the better hand, isn't so much important as is how they got more chips & the better hand.
And if they got those through the merits of being a better player at that specific game, why are you wanting to punish them by saying "No, these other guys who aren't playing as well need to be given an artificial boost!"?
Market regulators defend the consumer rights by ensuring a fair competition, in theory blocking monopolistic actions, actions that may meaningfully would damage the competition.
If Sony does that kind of actions would be blocked, independently of how they reached to that market power position. And well, they and any other company are supposed to be on their position by doing legal stuff. Same goes for MS or any other company.
The problem isn't MS trying to get an ace card, it's HOW they're trying to get it.
The problem isn't getting that card or how they got them. The problem could be if them getting that card allows them to cheat others and block others for winning and even to continue playing.
What makes you think they didn't consider the "key players" because they weren't in the market for a potential acquisition? Maybe they are/were, but Microsoft didn't think they'd have a good enough shot at acquiring them, so they decided on "non-key" players instead?
Maybe they want to work their way up? That's been the trajectory of their acquisitions so far TBH.
There are some key players (meaning, top performers in the areas they were looking to improve) as EA, Take 2, Ubisoft, Bandai Namco, Valve and many others that would be better for them than many of the ones listed.
If they aren't in the list, looking at the Bethesda and ABK acquisition pricing, the problem wasn't their price. So the only reason I can think of to don't include them there is that MS know they don't want to sell or at least not to MS, and if they know it was because they tried it, probably before trying to acquire Zenimax.
Then there are other ones that are Chinese or are owned or invested by Tencent or other top Chinese companies. Who won't sell to MS.
Satya Nadella is on record (not in court testimony, but in public interviews) saying that they would not be done with acquisitions even if they get ABK. They would look to make more, and thanks to redacted email leaks, we know that would include more 3P publishers.
I know, Phil also said it. They'll continue acquiring, just like Tencent, Sony or Embracer.
No we don't. Because Microsoft's acquisition strategy is a lot bigger than "just" ABK. It includes Zenimax. It includes the 2018 studios. It includes 3P publishers leaked that they've openly considered or have approached with offers to, like Sega/Atlus and Square-Enix.
If you can't see the long-term plans they are trying to accomplish with this strategy, that many targets (including even smaller ones like Housemarque) were very clearly aimed at cutting Sony off from key 3P partners over the long-term to choke them out of content and "put PlayStation out of business", then I don't know what else to tell 'ya. You're just being willfully ignorant at that point, or maybe you didn't look at the redacted leaks showing actual intentions with acquired content.
I know their long-term plan, which is to continue growing (in their case mostly inorganically, mostly via acquisitions) and outperform their competition. Just like any other big company.
But this trial and thread is about the ABK acquisition. Regulators analyze this acquisition and its effects on potentially damaging competition. In potential future big acquisitions, if they ever exist, they will have separate similar investigations.
I'm sure the scrutiny MS are going through here has played a part in that regard, but I'm also certain redacted information they've come across over the course of this trail has at least in part convinced Sony to adjust certain plans WRT acquisitions, to accelerate some. Or accelerate certain partnerships and investments, etc.
A few weeks ago Sony announced that they paused acquisitions delaying them for the mid to long term to wait for more favorable market conditions and a better timing.
I assume part of it was they didn't expect regulators being that harsh with big gaming acquisitions and that they are afraid regulators could be harsher with them, specially now that they have a lot of Sony data that shows that they dominate MS in many markets/submarkets.
I assume other things may be expectations regarding inflation or yen valuation, plus also knowing that they'll get a lot of cash in 2-3 years thanks to selling most of their banks division.
They can't just solely wait on the results of MS/ABK before planning to do their own thing. They can't be completely reactionary, that would spell disaster. If they can see Microsoft's true intentions as clearly as most of the rest of us can, then they need to make some very specific & big investments/partnerships/share purchases/acquisitions among both 3P devs AND publishers, regardless if MS do or don't end up acquiring ABK.
Because if it's not Microsoft, it'll probably be some other big corporation wanting to secure that 3P content and distribution for the chief benefit of their own ecosystem, at the expense of companies like Sony. That could be 10 years from now, 5 years...2 years, even?
It's always better to be proactive rather than reactive. Always.
Sony is happy with their own numbers, are better than ever and are growing more than ever in most areas, which means their numbers will keep improving.
They are not worried about MS, because PS dominates them in basically every single meaningful area with a big distance. Particularly, where MS is focusing more is in gamesubs, where Sony have a big distance and not only that, in recent times the distance instead of decreasing due to MS acquisitions got bigger with Sony highly increasing their gamesubs revenue due to the merging of PS Plus and PS Now.
Regarding exclusives catalog, Sony is making the biggest effort they ever made: they increased/are increasing the headcount of all their teams to help them release more games and faster, acquired more dev teams and support teams, and invested more than ever in 2nd party and 3rd party deals, both big and small, for this gen. They also expanded to MP, GaaS, PC, mobile and movies/tv shows and also invested more in accesories and eSports stuff like EVO.
So they won't miss catalog, will be bigger than ever. And these decisions weren't reactive to MS, all or amost all were previous to the Bethesda acquisition, a few even were taken before Jimbo and Hermen got promoted.
I'm sure that following their current strategy Sony will continue improving and will increase their market share vs MS. Even if MS ends acquiring ABK/CoD (something I think won't happen) and they make all future ABK and Zenimax console exclusive and day one in GP asap after the acquisition.
I'm also pretty sure Sony thinks the same (remember they had a graph where they said they had 45% console market share -including Nintendo- in PS4 and with PS5 they plan to grow to >55%). But defending their own interests Sony will try to do whatever they can to make regulators block the acquisition.
More random Korean studios that don't help their console business at all.
Neowiz is Lies Of P but why are you wasting time with this when FROM is right there?
They already are investing in From and have a deal with Kadowaka. Pretty likely they didn't get a bigger stake or bought it because Kadokawa doesn't want to sell a bigger stake.
Sony wants to invest in more companies, it wouldn't make sense to invest only From. There are other Korean games with potential for console, like Stellar Blade.
And well, they want to grow in Asia and many of the most successful devs or publishers there are from Korea, so they'll invest in Korean companies.
Not only for PS, but also for PC and mobile because PC and mobile make way more money than PS so they want to grow there too.
