Sony's future and possible studio/publisher acquisitions

[ksdixon]

They operate independently at Sony’s discretion.

Not Bungies demand.

When you sell your company 100% you are no longer in a position to call the shots or make demands.

Sony has total control because they totally own Bungie.

If Bungie were so fed up of being tied down by Microsoft and Activision the last thing you do is sell yourself to the highest bidder.

It’s no different to how Marvel and Lucasfilms operate under Disney.

If... Independant running and cross play commitment was written as part of the selling contract and Sony didn't honor those terms, it would cause a shit stir for them legally, no?

 

[thicc_girls_are_teh_best]

MS and Sony said they will continue acquiring (but in the case of Sony, not in the short term). But in the case of Sony isn't likely that they'd acquire big publishers, pretty likely because most of them won't want to sell or at least not to a platform holder.

Bandai or Capcom would be great acquisitions but for them would be better to continue independent and multiplatform.

By this logic then you're saying Microsoft won't be acquiring another publisher then too, right? After all if most of them are unwilling to sell (according to this logic), then that would extend to all platform holders.

BTW I disagree with this idea of yours; you have no way of gauging what conditions a publisher would want to merge or be acquired under, including whether or not they'd take an offer of M&A from a platform holder. We're seeing market conditions that are more favorable to acquisitions than ones that aren't, on average. But I'm just looking to see if your logic is internally consistent here.

Sony makes way more revenue than Nintendo.

I'm talking about the PlayStation subsidiary/division, not Sony as a whole. And, I'm talking about profit, not revenue. Nintendo's gaming profits are like $1.5 billion higher than PlayStation's. Sony's initiatives for the PC ports and GaaS/live-service are not to bolster revenue, but increase PlayStation's profits. Just like what Project Q's is for to an extent, even similar with the rumored PS5 Pro (since that will be sold for a profit, not a loss).

The only reason that prevents Sony having also way more profit than Nintendo is that Sony reinvests all that revenue on future stuff like making a bigger number (and also more expensive games) plus also in growing expanding themselves in many areas.

That doesn't change the fact that Nintendo's gaming profits are higher than PlayStation's, which is what I was saying.

That means Sony will make even more revenue in the future than now. And if they reduce in the future their aggresive invesments then they'll have way more profit.

AKA co-signing the GaaS/live-service software push where budgeting for traditional games barely shifts percentage-wise relative to the former for planned upcoming fiscal years.

To reinvest revenue to grow is smarter and better than to keep it as profits in the bank.

You're saying this like Nintendo doesn't reinvest revenue themselves. They do; how do you think they're making initiatives like Nintendo World and the Super Mario Bros. movie? Switch 2 R&D doesn't come free, either.

If Sony wouldn't have acquired Bungie they'd have posted way more profits. If Sony wouldn't have grown all their teamns they'd have posted more profits. If instead of greenlighting like 30-40 games to be developed at the same time they would have only greeenlighted around a dozen they'd have posted more profit.

But it's a better idea to do what Sony did. And they can do it if they have way more revenue. And that's why companies are analyzed looking at the revenue as main metric and not the profit.

We might have to agree to disagree on some of Sony's software initiatives depending specifically on how things shake out. You're 100% on-board with anything they do so long as revenue and profit increases, clearly. I'm not; I still question the validity of bringing marquee traditional games to the PC long-term without either extending the porting window (to where PC gets the previous entry within a year of the console getting the newest), or Sony establishing their own storefront & virtual platform on PC with subscription tiers (including a free ad-supported one) that basically can simulate the console environment, where shorter or even Day 1 for all games on PC makes a lot more sense for retaining traffic & money into platforms you 100% own in your own ecosystem.

I still question if 10-12 GaaS/live-service games is too much, especially if they are all going to be primarily MP-centric or shooter-based; the former cuts off any server independence and the latter is a heavily crowded space already. I want to see what the variety of those GaaS/live-service games looks like, but so far I can't say Fairgame$, Concord, Marathon or even Helldivers 2 break that trend (and I think Helldivers 2 looks great, BTW).

So I'm not just looking at this from a bottom-line POV; I'm also looking at things from a hobbyist POV and to some extent my own personal tastes.

I didn't mean this. I meant that companies like Kadokawa would focus more on games like Elden Ring, Sekiro or Dark Souls than in games as Love Live! School idol paradise, Metal Max, Root Letter: Last Answer, Relayer, Demon Gaze or more particularly, weirder Japan only games that we don't know at all.

The first group are games which are popular worldwide. The second group are way less popular games worldwidem, specially outside Japan. There's a small amount of people who care about them and only from Japan.

I get what you're saying, and I can agree that Japanese developers/publishers have shifted away from localizing the weirder games these days on console, to the detriment of game variety for non-Japanese gamers IMHO. Western indies fill that void somewhat, but there are still specific quirks and qualities of how Japanese games handle that stuff which Western indies cannot capture.

With older consoles we saw more of those games both because games in general were cheaper to make, and that the quirkier games didn't need that many copies sold in the West to justify the localization efforts. Dev team sizes per game were also much smaller, so companies could afford to have 10-15 people working on a quirky game or two while the others worked on the bigger games simultaneously.

In that sense, the Switch has been a decent proposition for some of those games, at least in Japan, and I feel it gets a bit more of them localized for the West vs. say the PS4/5 and absolutely the Xbox. Otherwise those developers have mainly shifted to mobile.

Microsoft said to the regulators that their gaming division only had 2 profitable quarters in all their history (meaning, since the start of the original Xbox).

Microsoft also said a LOT of half-truths and flat-out misdirects to regulators, or changing the way they reported certain statistics to better suit their case towards them. They wanted Xbox to appear weak and feeble, so of course they would report something like that. Keep in mind that some things they reported were not in a courtroom, so they weren't bound to an oath.

That presentation Brad Smith did for the EC regulators, for example? That was one such thing, right there.

There have been researches that shown that there's a big overlap of PS users who also have Xbox or a gaming PC. The CMA even did a poll for CoD PS players to know if CoD being on PS was a reason of having bought that console or if they would leave if it went exclusive and only like a quarter of them said yes.

Wasn't there also evidence from the FTC hearing showing that much fewer PS users have an Xbox compared to, say, having a Switch? For that poll you're referring to, a quarter is still 25%, that's not an insignificant amount of the people who responded. It is well outside the margin-of-error.

But more importantly than that, I know that the PS CoD MAU is less than 8% of the PS MAU and that Sony is growing in many areas and Sony will market other games instead of CoD, so over time this % will become smaller in the future.

How much of the other 92% PS MAU is generated by the 8% of COD MAU? That's the part you folks need to really be looking at. The MAUs aren't mutually exclusive.

If CoD would go platform exclusive the majority of players would stay on PS, but even if all these players would leave they would have been quickly replaced by other ones thanks to the PS growth.

Majority of console players, or majority of COD players? Because if the latter they absolutely would switch if COD went exclusive to Xbox/PC. Even partial exclusivity of certain content or privileges may convince a lot of them to switch primary platforms.

And well, I also know that Sony and MS signed a deal to keep CoD on PS for at least 10 years and that they'll renegotiate to extend it once it expires. So this discussion is pointless because during at least a decade people will continue playing CoD on PS.

They MAY renegotiate it after the deal expires. But you are still missing the larger point: this isn't about people still being able to play COD on PlayStation. It's actually about Sony now losing a sovereign, independent position in the market to negotiate and do business with ABK on their own terms when it comes to IP like COD. Microsoft have now made themselves the middleman, as well as the last stop.

Any comarketing, co-funding, co-development etc. proposals Sony would've had for ANY ABK game that chiefly focused on PlayStation will no longer be possible. At the very least, Microsoft would want complete parity of content & performance (scaled in the case of Series S) for any such efforts, and may still pursue Xbox/Game Pass-exclusive perks on top of that, something Sony cannot do for their own platform audience.

That doesn't even bring into the picture, that MS still undercuts Sony with Game Pass Day 1 availability of all those games, whereas on PlayStation a person has to shell out $60/$70 on release per game (unless Sony offers a per-game subscription/installment payment model for PS Store purchases).

We don't know the exact numbers, but in any case do you think that the next games being made by Bungie, Firewalk, etc. plus TLOU online and so one for sure they'll sell more than 5 million copies each. And most of them, more than 10. Including a couple of them will sell over 20 million.

You're still just speculating. For one we don't know which ones will be B2P or F2P. If they're B2P then how does Sony address the fact that PS gamers have to pay for online MP while PC players do not, but pay the same price for B2P (or potentially less in the case of PC players)? Something even as small as that, can have a notable impact on sales trajectory among enthusiasts. And if not sales, then revenue.

The previous GaaS games made by the people from Bungie, Firewalk or Haven (Destiny, Rainbow Six Siege, Assassin's Creed, The Division etc) sold way more than these 15-20M and on top of that must have made a shit ton of money with addons. They also have experience on releasing the fastest selling new IPs in gaming history record numbers (AC, Watchdogs, Destiny, almost The Division).

Those are the previous games though; until we see the new games release and see how they perform, there isn't much telling how they actually do in the market in terms of sales and revenue.

Then there's TLOU Online or Deviation, which can also be super successful but are more a question marke.

If anything TLOU Factions 2 has the best chance of success alongside Marathon, given the reception to the first two games and the TV series.

Helldivers 2 is a different case, they are more a Housemarque-like case. A small boutique team that made very good games for a small niche and very successful in that context, that now made the jump to a AAAish size.

And then we have GT7 or MLB, Sony GaaS that already are a big success.

You notice that both of these also have substantial single-player traditional modes/content and also advertised heavily around that, right? Also neither are FPS shooters. If Sony's live-service/GaaS initiative includes more games like these two, then I think I would be way less critical of that strategy for what we know of it thus far.

However, again with the known stuff on slate like Fairgame$, likely Concord, Marathon etc. I just get the current read the initiative will lean completely into MP-centric FPS sci-fi/military esque shooters with no particular focus on a story or traditionally-structured single-player campaign nor content.

That's all I can go off of based on what we know of these games so far.

I think that out of the dozen GaaS there will be at least 2 or 3 super huge hits. Then 2 or 3 flops (case of the Deviation game if canned) and the other ones will perform ok/good (Firewall Ultra, Sony London new IP or Twisted Metal) or very good without being a huge hit.

Jimbo said that out of their dozen GaaS, if a couple of them become a big hit they'll be happy. The majority of the gaming money now is on GaaS. Sony already has a ton of super selling non-GaaS, so in addition to invest more than ever in non-GaaS they are trying to invest in GaaS too.

And this is the other side of the potential issue; just how much money is going to be afforded for non-GaaS titles going forward? I've seen the charts; what I want to know is the hard dollar amounts for funding per fiscal year. Games like HFW and TLOU2 costed $212 - $220 million to produce. On average games of that size and ambition take 5 years to make. This console generation will likely be 8 years in length.

So, a game like HFW that just went into production this year, we won't see it until 2028. TLOU3 is likely one of those types of games, although it could be a 2027 release. Let's say for FY26, the ratio of funding for traditional games drops to 35%, while for GaaS it increases to 65%, but the overall budget only goes up by 10%. And for FY25, I believe the budget comes out to around $2.13 billion, so $852.15 million for traditional games. That's around 3 AAA traditional games on the whole, and those would be PS6 titles.

However, if costs are generally going up, and you need more manpower to build worlds that extract more out of these more powerful consoles, then the budgets go up as well. Let's just assume a 30% budget increase for something like TLOU2 to TLOU3; that's a game which could go up to $286 million for PS5. Now another 30% increase; a PS6 TLOU (as an example) jumping up to $371.8 million.

So that effectively drops the # of AAA traditional games for a FY26 budget ($937.365 million) down from 3 to 2.5, so effectively 2. HOWEVER, I will play devil's advocate here: it seems like TLOU2 and HFW are outliers to Sony's gaming budgets. Uncharted 4 costed about $40 million, while Spiderman 2018 costed around $100 million. We know TLOU2 went through some changes and they probably had to redo a lot of cut content due to script changes (plus changes/upgrades to their engine and likely some of that cost from planned MP content that got shifted to Factions 2). Horizon Zero Dawn's budget was around $50 million; outside of possibly upgrades and changes to the Decima Engine and hiring more Hollywood actors & actresses, stunt coordinators and maybe costs for site telemetry data I can't really figure why Forbidden West's budget ballooned by 4x, even accounting for inflation.

To pay for GPU around $200/year during a generation or so isn't "for free" or cheaper than a single $70 payment + PS Plus Essential.

That's not how casuals are going to look at it, and for COD enthusiasts who actually play at least 3 or so of the other games MS offers, GPU would look worth it over buying each game individually on PlayStation.

Not to mention, you can still "cheap out" with Game Pass with stuff like MS Reward points. Though the $1 conversion deal will be effectively dead once Game Pass Core launches, since that is phasing out XBL Gold, and that deal relied on 3 years of Gold converted to 3 years of GPU for $1.

That part actually just dawned on me as I was typing it. That ResetERA thread is gonna be BIG mad

Yes, the CMA and the EC didn't see any issue with the acquisition regarding consoles, for them would be ok to make CoD exclusive on consoles tomorrow. The only thing that worried the CMA was the cloud gaming market (EC was fine with it like the rest of the regulators).

They are also fine with Bethesda games being exclusive, because they represent a tiny portion of the market, where PS heavily dominates Xbox, and don't affect it at all.

Just remember it was Microsoft themselves who said to regulators like the EC that they would not make Zenimax games exclusive unless they could afford growth for Xbox consoles or Game Pass without leaving money on the table by skipping PlayStation.

Yet that is exactly what they are doing, in their own words, with Starfield. So you need to stop turning to the opinion of the regulators on this because I am pointing out Microsoft's own actions with Zenimax as a barometer to what they intend to do with ABK content, including COD, in foreclosing on PlayStation. You can't on the one hand acknowledge that is a decent probability of something happening, but on the other talk as if Microsoft "obviously won't do it" because of money left behind by skipping PlayStation platforms.

When, again, they are ALREADY doing this with games like Starfield and TES VI!!!

Microsoft, like Sony, Nintendo or any company wants to improve their business getting more revenue, profit, and market share. To outperform their direct competitors. Because they are companies, not charities.

Companies should also be expected to make that growth in markets by actually leveraging the merits of the products in the market segment they wish to grow in. For Microsoft and gaming, that is the Xbox division, and leveraging its market share, revenue and profit channels, etc. Except, Microsoft aren't doing that at all with ABK; the Xbox division cannot afford that type of acquisition. Microsoft is leveraging their entire corporate structure valuation and revenue/profit channels to finance the ABK acquisition.

What part of this do you keep missing? We're talking about these acquisitions on the grounds of the merits of the gaming divisions of these larger companies. SIE/PlayStation leveraged on its own, the Bungie acquisition. Because PlayStation as a division is easily valuated high enough to do so, PlayStation itself brings in more than enough revenue, and brings in annual profits at or near the cost of the Bungie acquisition in the space of a single fiscal year or maybe roughly 18 fiscal quarters.

If a company like Microsoft is going to complain about their position in the gaming market to regulators so as to garner support for acquiring a big 3P publisher, why shouldn't they be held to leveraging and financing that acquisition off of their gaming division's revenue/profit and valuation pipelines? Why are they allowed to utilize their entire weight as a corporation for an acquisition in a market none of the other parts of the company are directly involved in?

And yes, this is much different than Sony acquiring Psygnosis back in 1993 (when PlayStation as a unit didn't yet exist), or doing things like adding Blu-Ray drives into PS3 (not only was this technology available for competitors like Microsoft, Sony putting it in PS3 screwed them over in the short-term WRT pricing compared to 360).

And as part of that, they sign 3rd party exclusives or make acquisitions. Like Sony. But the companies they acquire or 3rd party exclusives they sign represent a tiny portion of the market. They improve their brand and doesn't damage the rival one.

ABK represents 1/26th of the entire gaming market's revenue. With Zenimax added on top, MS have acquired maybe 1/25th or 1/24th of the entire industry's revenue through those two publishers, and Satya Nadella is on record saying they look to acquire more.

You are only looking at short-term, immediate sales metrics to conclude that no damage is done to their rival in making these acquisitions. The fact that MS needed to lobby and assuage to put a friendly face in the EC cabinet, or have a lawyer at the FTC hearing whose son works for them, to get bodies to agree with your conclusion shows that maybe the actual raw metrics don't favor your conclusion, hence certain happenstances needed to come about to offset.

And, again, I'd suggest you read the leaked emails and unredacted documents if you don't think Microsoft's intentions involve damaging a direct competitor like Sony, to the point of spending them out of business. Acquisitions like ABK will fuel that directive.

No, I think MS, Sony, all the regulators and people with functioning brain that MS bought ABK to make more money than they did before. And know that in consoles they make money mostly with CoD, and mostly on PS.

I would suggest you get a CAT exam, and the same to the regulators. MS don't believe this spiel, that's why they expressed their actual intentions in the leaked documents & emails you seem to pretend don't exist.

And once again, you are missing the forest from the trees, about what acquisitions like ABK actually signify to the market.

So considering that it's pretty suicidal to include all their games day one on GP for Xbox and PC, killing a lot of their sales there, to remove CoD from PS would be too suicidal even for MS standards, as would be to remove Minecraft from PS and Nintendo.

A company that has little to no dependence on gaming revenue or profits to continuously make gains in market valuation or grow their corporate revenue substantially, doesn't care about suicidal moves like the ones you describe. In fact, we know now that Phil Spencer wanted to make Minecraft exclusive to Xbox consoles; it was only Notch/Mojang who prevented that from happening.

The failure to make Minecraft exclusive is exactly why they have decided to make all Zenimax games going forward console-exclusive to Xbox, including games like Indiana Jones, which were supposed to come to PS5 until Microsoft decided to renegotiate the original contracts to exclude the platform. There is more evidence to support the idea that, eventually (and sooner than 10 years from now) MS will fully foreclose COD on PS platforms, than not.

Keep in mind a term in those 10-year-deals is that MS can decide to renege the deal for essentially any reason, if they can find a way to justify it with legal lingo.

It isn't good faith, it's business. If to keep CoD and Minecraft console exclusive would generate them more revenue and profits, they'd do so. But isn't, so they won't do it.

This isn't simply about making more money in the short-term for Microsoft. You still aren't getting it.

 

[Muddasar]

If... Independant running and cross play commitment was written as part of the selling contract and Sony didn't honor those terms, it would cause a shit stir for them legally, no?

No it doesn’t.

If Bungie wanted freedom why sell yourself?


Bethesda wanted to remain multi-platform and got shut down at the prospect by Phil Spencer.

Bungie is answerable to Jim Ryan.

He is the boss of Bungie and Playstation Studios.

This whole independent and multiplatform talk is all optics for the public.

In reality Sony can change their mind any time.

 

[DForce]

They operate independently at Sony’s discretion.

Not Bungies demand.

When you sell your company 100% you are no longer in a position to call the shots or make demands.

Sony has total control because they totally own Bungie.

If Bungie were so fed up of being tied down by Microsoft and Activision the last thing you do is sell yourself to the highest bidder.

It’s no different to how Marvel and Lucasfilms operate under Disney.

No it doesn’t.

If Bungie wanted freedom why sell yourself?


Bethesda wanted to remain multi-platform and got shut down at the prospect by Phil Spencer.

Bungie is answerable to Jim Ryan.

He is the boss of Bungie and Playstation Studios.

This whole independent and multiplatform talk is all optics for the public.

In reality Sony can change their mind any time.

Considering what happened with Activision and Microsoft, there would have to be some agreement in place where they act as an independent studio under Sony. This merger would benefit both parties - Sony acquiring Bungie for their expertise and Bungie exploring avenues outside of video games.


If this was a regular acquisition similar to... let's say Insomanic Games, then there would be no emphasis on remaining independent. You can be fed up with being tied down due to creative freedom, but you can agree to be bought based on conditions that are met and kept throughout the merger.

 

[Zzero]

Sony putting Blu-Ray into the PS3 was probably the best corporate decision they have made in the padt 20 years. Led to a bit of short-term pain for Playstation but saved BR (HD-DVD was all set to crush it, otherwise) and even helped the PS division in the end.

Consumers rejoice too since BR was a far superior storage medium.

 

[Yurinka]

If... Independant running and cross play commitment was written as part of the selling contract and Sony didn't honor those terms, it would cause a shit stir for them legally, no?

SIE bought 100% of the shares of Bungie, meaning SIE has full control of Bungie, so Jimbo can do with them whatever they want. If Jimbo wants tomorrow Bungie would work on PSVita exclusive Knack sequels.

But what we know is that what Jimbo wanted was to get money from PC and the other consoles, so thought that it was a good idea to buy Bungie and keep them doing what they already do: to develop games with creative freedom (as also happens with the PS Studios teams) and publish in all platforms with the Bungie publishing label to differentiate them from the console exclusive PS Studios publishing label. Sony also would help Bungie with marketing and adapting their IPs to cinema and tv, while Bungie would support the other SIE teams with GaaS.

And even if they didn't announce it, it's fair to assume Sony would also get exclusivity for things like console bundles, pretty likely exclusivity for inclusion in game subs in case they do it, and to block any exclusivity or similar deal with rival consoles.

then there would be no emphasis on remaining independent.

Sony owns 100% of Bungie, which means that Bungie is 0% independent.

That was only a PR bit to highlight that they will be a SIE subsidiary but won't be under the PS Studios label and unlike PS Studios they won't be console exclusive: they will continue publishing with the Bungie label in all platforms day one.

 

[Danja]

Sony putting Blu-Ray into the PS3 was probably the best corporate decision they have made in the padt 20 years. Led to a bit of short-term pain for Playstation but saved BR (HD-DVD was all set to crush it, otherwise) and even helped the PS division in the end.

Consumers rejoice too since BR was a far superior storage medium.

It was PS3 and the combination of Disney that sealed the deal. But def one of their best investments tho I feel the medium never truly got to penetrate the market it should due to the rise of streaming services

 

[Zzero]

It was PS3 and the combination of Disney that sealed the deal. But def one of their best investments tho I feel the medium never truly got to penetrate the market it should due to the rise of streaming services

Well Disney was either leaning HDDVD or actually on it. Sony putting Blu Ray in the PS3 made them change their mind.

 

[Muddasar]

Considering what happened with Activision and Microsoft, there would have to be some agreement in place where they act as an independent studio under Sony. This merger would benefit both parties - Sony acquiring Bungie for their expertise and Bungie exploring avenues outside of video games.


If this was a regular acquisition similar to... let's say Insomanic Games, then there would be no emphasis on remaining independent. You can be fed up with being tied down due to creative freedom, but you can agree to be bought based on conditions that are met and kept throughout the merger.

It wasn’t regular.

It was 3.6 billion.

Bungie operate independently. They are not independent.

They operate under SIE just like Playstation studios.

Insomniac were different as they were put into Playstation studios.

That’s the only difference.

 

[Yurinka]

By this logic then you're saying Microsoft won't be acquiring another publisher then too, right?

No, you are replying to a post where I say MS and Sony will continue acquiring. They will acquire, but not companies that don't want and don't need to sell to save the company.

After all if most of them are unwilling to sell (according to this logic), then that would extend to all platform holders.

Yes, applies to any companies: you can't buy a company if their owners don't sell it.

BTW I disagree with this idea of yours; you have no way of gauging what conditions a publisher would want to merge or be acquired under, including whether or not they'd take an offer of M&A from a platform holder. We're seeing market conditions that are more favorable to acquisitions than ones that aren't, on average. But I'm just looking to see if your logic is internally consistent here.

When a company has the best finantials this company ever had and are in a multi year trend of growth, it means that super likely will continue growing in the next few years. This means that its value will increase.

So even if you want to sell a company, it's better to wait to sell it because in a few years the value will be much higher so you will get more money when selling it.

On top of that, some companies like Ubisoft or Capcom are family business. Companies founded by the current CEO, and a good part of their board of directors/stakeholders are people from his family like brothers or sons. They have a special attachment to the company and don't want to sell it.

Companies also may decide to sell if who buys them offers them a great synergy that would help them grow in markets where they already aren't and would be difficult to enter without the acquisition or in case the acquirer offers them an invaluable help being part of them. Something that would help them grow their business. Which doesn't match with reducing the revenue of their company by making their multiplatform games console exclusive.

I'm talking about the PlayStation subsidiary/division, not Sony as a whole. And, I'm talking about profit, not revenue. Nintendo's gaming profits are like $1.5 billion higher than PlayStation's. Sony's initiatives for the PC ports and GaaS/live-service are not to bolster revenue, but increase PlayStation's profits. Just like what Project Q's is for to an extent, even similar with the rumored PS5 Pro (since that will be sold for a profit, not a loss).

That doesn't change the fact that Nintendo's gaming profits are higher than PlayStation's, which is what I was saying.

Nintendo had more profit because they are developing way less games, way cheaper, didn't release a PSVR2, didn't push GaaS development, didn't push PC ports, didn't growing all internal studios, didn't revamp their gamesub service signing a lot of games, didn't make acquisitions and investments like Bungie, wasn't working in all the other accesories Sony was working on etc.

Sony generated way more money/revenue than Nintendo, but reinvested most of it in these and other things. Which now are costs, but in the future will produce a ton of revenue more than they did cost. Producing more profit in the long term.

Nintendo decides to keep part of their revenue in the bank as profits, Sony could have way more profit than Nintendo but thinks that it's a better idea to reinvest most of the revenue they make to grow than to keep the money sitting in the bank.

AKA co-signing the GaaS/live-service software push where budgeting for traditional games barely shifts percentage-wise relative to the former for planned upcoming fiscal years.

Very successful GaaS generate way more revenue and profit than very successful non GaaS. The revenue game sales is decreasing while revenue from GaaS addons is increasing and already is the majority of the game revenue.

It would be stupid to don't invest on GaaS and get stuck in non-GaaS only because in the long term it would be a suicide.

So Sony increases their investment in non-GaaS but invested way more to join the GaaS market with some big success.

You're saying this like Nintendo doesn't reinvest revenue themselves. They do; how do you think they're making initiatives like Nintendo World and the Super Mario Bros. movie? Switch 2 R&D doesn't come free, either.

The SIE division budget for this year is the whole revenue they generated last year. And they generated way more revenue than Nintendo.

If Nintendo would reinvest in the same scale than Sony, instead of profits they'd have posted over a dozen billion in loses. But they posted a good chunk of profits, because Nintendo obviously reinvests, but in a way smaller scale than Sony.

Nintendo makes way less games, way cheaper games, spends way less money signing exclusives for their console and game sub, spends less in acquisitions, accesories, on powerfull hardware, etc.

We might have to agree to disagree on some of Sony's software initiatives depending specifically on how things shake out. You're 100% on-board with anything they do so long as revenue and profit increases, clearly. I'm not; I still question the validity of bringing marquee traditional games to the PC long-term without either extending the porting window (to where PC gets the previous entry within a year of the console getting the newest), or Sony establishing their own storefront & virtual platform on PC with subscription tiers (including a free ad-supported one) that basically can simulate the console environment, where shorter or even Day 1 for all games on PC makes a lot more sense for retaining traffic & money into platforms you 100% own in your own ecosystem.

I'm not 100% on board with everything they do. I wouldn't port their games to PC or I'd port less games to PC and would wait more time after the PS release. I'd have acquired Capcom (if Capcom would be open to sell and Sony had the budget to do so) instead of the teams they acquired. I don't like prices rising. I prefer SP non-GaaS games.

But I understand why they do what they do, because it's good for their business and because it's required to keep growing their revenue and profits to be able to pay the budget of their AAA games which every generation skyrocket. So even if I won't buy some of these games, ports and accesories I understand that as a Sony fan they are needed to fund now and in the future the non-GaaS SP games I like.

So I explain that. Explaining why Sony doesn't do something and mentioning that I makes sense doesn't mean I like them to do that.

I still question if 10-12 GaaS/live-service games is too much, especially if they are all going to be primarily MP-centric or shooter-based; the former cuts off any server independence and the latter is a heavily crowded space already. I want to see what the variety of those GaaS/live-service games looks like, but so far I can't say Fairgame$, Concord, Marathon or even Helldivers 2 break that trend (and I think Helldivers 2 looks great, BTW).

They aim to get one or two GaaS super hits, so they bet in many of them hoping that at least one or two will be a big hit and learn some lessons from the other ones for the future. Other GaaS like GT7 or MLB simply are a way to get more revenue from the games to compensate the budget rise from every generation.

I get what you're saying, and I can agree that Japanese developers/publishers have shifted away from localizing the weirder games these days on console, to the detriment of game variety for non-Japanese gamers IMHO. Western indies fill that void somewhat, but there are still specific quirks and qualities of how Japanese games handle that stuff which Western indies cannot capture.


With older consoles we saw more of those games both because games in general were cheaper to make, and that the quirkier games didn't need that many copies sold in the West to justify the localization efforts. Dev team sizes per game were also much smaller, so companies could afford to have 10-15 people working on a quirky game or two while the others worked on the bigger games simultaneously.

In that sense, the Switch has been a decent proposition for some of those games, at least in Japan, and I feel it gets a bit more of them localized for the West vs. say the PS4/5 and absolutely the Xbox. Otherwise those developers have mainly shifted to mobile.

Many of these weird Japanese game will continue existing and will continue to be supported by Sony, but as a self published indies supported by Shuhei Yoshida via PlayStation Indies.

Sony will continue getting more games released on their console than in Switch, including more indie games and more Japanese games.

Microsoft also said a LOT of half-truths and flat-out misdirects to regulators,

Yes, like Sony. Both were simply defending their interests with anything they could find. Sometimes getting pretty ridiculous, but it's normal in these cases.

Wasn't there also evidence from the FTC hearing showing that much fewer PS users have an Xbox compared to, say, having a Switch? For that poll you're referring to, a quarter is still 25%, that's not an insignificant amount of the people who responded. It is well outside the margin-of-error.

Yes, in many of these researches they also compare how many people also have a Switch. And from there appears the idea that a lot of users who primarly play on a high-end console have a Switch as secondary console in a way bigger scale than having both high end consolles. So makes some people think that Switch doesn't really compete that much with the other two and it's a separate compementary market of the high end consoles.

I don't remember the exact %, but I think it was 26 or almost 27%. Yes, it's an important percent. But it isn't a 25% of the PS userbase. It's 25% of the CoD PS userbase. CoD PS MAU was only under 8% of the PS MAU, which is around 110M. Meaning, around 2M PS users would leave if CoD goes Xbox exclusive or wouldn't have bought the console if CoD wouldn't be on PS.

In any case, it was only a poll and was only for UK, a country where PS isn't as dominant as in the rest of EU or in Asia. So we have to take it with a grain of salt, but gives us an idea -or at least gave it to the CMA- that if CoD ever goes Xbox console exclusive won't almost affect PS because losing a couple million users is nothing when a PS console sells more than 120M units.

How much of the other 92% PS MAU is generated by the 8% of COD MAU? That's the part you folks need to really be looking at. The MAUs aren't mutually exclusive.

I don't know, but not much because many CoD players only play CoD. Or play only CoD and another game.

They MAY renegotiate it after the deal expires.

The first report of the 10 years deal mentioned that they WILL renegotiate it once it expires, so in 2033. One of the things Jimbo complained in the first offer was that, to don't limit to a specific period of time, so makes sense that they could have reached to a middle point of giving them 10 years + renegotiation to get more instead of only 3 years.

But you are still missing the larger point: this isn't about people still being able to play COD on PlayStation. It's actually about Sony now losing a sovereign, independent position in the market to negotiate and do business with ABK on their own terms when it comes to IP like COD. Microsoft have now made themselves the middleman, as well as the last stop.

Sony will continue being the console market leader with a big distance. And as does with the rest of big 3rd party AAA games, they negotiate with their owners to have them on PS. That 3rd party for CoD before it was ABK, now will be MS.

Any comarketing, co-funding, co-development etc. proposals Sony would've had for ANY ABK game that chiefly focused on PlayStation will no longer be possible. At the very least, Microsoft would want complete parity of content & performance (scaled in the case of Series S) for any such efforts, and may still pursue Xbox/Game Pass-exclusive perks on top of that, something Sony cannot do for their own platform audience.

Yes, the marketing that Sony spent on CoD now will be spent in other PS games. PS will continue having CoD with same content, features and performance than in Xbox. And well, in the past Sony didn't have CoD on PS+ and now seems that they'll have it (old ones doesn't seem they'll have itt day one).

That doesn't even bring into the picture, that MS still undercuts Sony with Game Pass Day 1 availability of all those games, whereas on PlayStation a person has to shell out $60/$70 on release per game (unless Sony offers a per-game subscription/installment payment model for PS Store purchases).

Yes, in PS players will have to buy it $70+PS Plus Essential.

In Xbox they'll also have to option to rent it for around $200/year.

You're still just speculating.

Yes.

For one we don't know which ones will be B2P or F2P.

I bet they will be as F2P as GT7, Destiny 1&2 when released, Rainbow Six Siege or most Ubisoft AAA games, FIFA, GTAV, etc. To make the jump to GaaS is very big. To make the jump to F2P is way bigger.

For now they are making the GaaS step. I assume they'll take several years testing GaaS with different approaches, learning and mastering it. Once they achieve it, than later some of their GaaS -where makes sense- will make the jump to F2P.

Those are the previous games though; until we see the new games release and see how they perform, there isn't much telling how they actually do in the market in terms of sales and revenue.

Yes, obviously we can't know the performance until they get released. But seeing that the Marathon teaser in the official channel alone got 19M views combined with the success of their Halo and Destiny games, I assume there's a lot of people interested on it, so I think very likely this is going to be a huge hit.

If anything TLOU Factions 2 has the best chance of success alongside Marathon, given the reception to the first two games and the TV series.

Yes, I think they are the safer bets, but I'm pretty confident with what Firewalk and Deviation can do because they have a ton of top tier FPS pedigree there.

You notice that both of these also have substantial single-player traditional modes/content and also advertised heavily around that, right?

And this is the other side of the potential issue; just how much money is going to be afforded for non-GaaS titles going forward? I've seen the charts; what I want to know is the hard dollar amounts for funding per fiscal year. Games like HFW and TLOU2 costed $212 - $220 million to produce. On average games of that size and ambition take 5 years to make. This console generation will likely be 8 years in length.

Yes. Some GaaS have substantial SP traditional modes and content, some other ones don't.

In the case of MLB or GT7, they have it. We'll have to see what the other GaaS Sony games have both at launch and during post launch.

Outside a few games like Street Fighter and Wipeout I don't play MP, so I won't buy any PvP only game. But well, not all Sony games need for me. There are other players who like PvP games, and are a ton.

Sony will increase their bet on non-GaaS traditional games in 1st/2nd party. Non-GaaS are the majority of their games under development. And also having record investment on 3rd party I assume they'll also have more non-GaaS 3rd party exclusives than ever. I will continue eating good.

So, a game like HFW that just went into production this year, we won't see it until 2028. TLOU3 is likely one of those types of games, although it could be a 2027 release.

Yes, but in the past Guerrilla or ND only worked in a single big game at the same time. Now they work in 3 or 4 big games at the same time. They started to follow the Insomniac route: multiple games developed at the same time to alternate releases and keep releasing big games frequently.

Let's say for FY26, the ratio of funding for traditional games drops to 35%, while for GaaS it increases to 65%, but the overall budget only goes up by 10%. And for FY25, I believe the budget comes out to around $2.13 billion, so $852.15 million for traditional games. That's around 3 AAA traditional games on the whole, and those would be PS6 titles.

The $2.13B (300B Yen) figure was the Sony gaming R&D budget for the current FY, which is 40% of the total Sony R&D budget.

This is rougly the money they made from last year after paying taxes and so on: "Earnings before interest, taxes, depreciation and amortization -- or EBITDA -- for the company's game business was about 337 billion yen last fiscal year, up more than 60% from five years ago."

They expect to keep increasing the revenue they make from gaming, and apparently to keep reinvesting it into making more games. Because the budget is also expected to keep growing.

Sony has over 25 games under development (pretty likely around 40) and only 10-12 of them are GaaS. Sony is developing -and will continue developing in a handful years- dozens of non GaaS SP games.

That's not how casuals are going to look at it

Casuals will see that at least just before the PS7 release CoD will continue being released on PS.

Not to mention, you can still "cheap out" with Game Pass with stuff like MS Reward points.

Some people don't like to rent games for almost 200 bucks per year. This is not cheap for them. The average player buys a couple games per year.

Though the $1 conversion deal will be effectively dead once Game Pass Core launches, since that is phasing out XBL Gold, and that deal relied on 3 years of Gold converted to 3 years of GPU for $1.

Yes.

Just remember it was Microsoft themselves who said to regulators like the EC that they would not make Zenimax games exclusive unless they could afford growth for Xbox consoles or Game Pass without leaving money on the table by skipping PlayStation.

Yes, and I think they should be punished for lying to regulators and investors. I'm not an expert, but I assume there should be legal consequences.

What part of this do you keep missing? We're talking about these acquisitions on the grounds of the merits of the gaming divisions of these larger companies. SIE/PlayStation leveraged on its own, the Bungie acquisition. Because PlayStation as a division is easily valuated high enough to do so, PlayStation itself brings in more than enough revenue, and brings in annual profits at or near the cost of the Bungie acquisition in the space of a single fiscal year or maybe roughly 18 fiscal quarters.

Yes, the idea of Sony is to growth their gaming business using mostly the revenue they earn from their gaming business. This is one of the reasons of why I'd be highly surprised to see Sony spending over a dozen billions or so to acquire a big publisher like Capcom.

If a company like Microsoft is going to complain about their position in the gaming market to regulators so as to garner support for acquiring a big 3P publisher, why shouldn't they be held to leveraging and financing that acquisition off of their gaming division's revenue/profit and valuation pipelines? Why are they allowed to utilize their entire weight as a corporation for an acquisition in a market none of the other parts of the company are directly involved in?

Because companies are allowed to get the money from where they can to make acquisitions. The source of the money is unrelated to the job of the market regulators.

What market regulators do is to make sure companies with too much market power in a specific market don't make monopolistic actions in that market.

And yes, this is much different than Sony acquiring Psygnosis back in 1993 (when PlayStation as a unit didn't yet exist), or doing things like adding Blu-Ray drives into PS3 (not only was this technology available for competitors like Microsoft, Sony putting it in PS3 screwed them over in the short-term WRT pricing compared to 360).

Yes, it's very different. Psygnosis and the Blueray were a super tiny portion of the market back then.

ABK represents 1/26th of the entire gaming market's revenue. With Zenimax added on top, MS have acquired maybe 1/25th or 1/24th of the entire industry's revenue through those two publishers, and Satya Nadella is on record saying they look to acquire more.

Gaming revenue in 2022: $183B
Sony revenue last FY: $26.9B (14.7%)
MS+Zenimax revenue last FY: $16.23B (8.87%)
ABK revenue last FY: $8.14B (4.49%)

So MS+Zenimax+ABK will continue behind Sony. And ABK will lose a lot of revenue due to including all their games in GP day one, and also making some games -not CoD- Xbox exclusive, so the difference will be bigger than the current one. And PS will continue growing because they have been investing hard in all areas, so the distance will be bigger.

And Sony isn't the only one above MS in game revenue, there are other ones like Tencent or Apple also in the low tens of market share. Four major players where none of them has even a fifth of the market, followed by several other companies with pretty close market share. The opposite of a monopoly.

And, again, I'd suggest you read the leaked emails and unredacted documents if you don't think Microsoft's intentions involve damaging a direct competitor like Sony, to the point of spending them out of business. Acquisitions like ABK will fuel that directive.

In addition to read the sensationalist, out of context gaming news headers I did read the full mails, in addition to other ones also uploaded there and not highlighted by the press, plus the attached projects.

I'm also familiar with the mail conversations and documents of a big gaming company. And know the difference between a personal opinion or thought in a mail and the strategy of a big corporation, and the difference between a list of top grossing mobile gaming companies and a list of companies that they plan to acquire.

I would suggest you get a CAT exam, and the same to the regulators.

I don't know what a CAT exam is xDD

This isn't simply about making more money in the short-term for Microsoft.

I never said that. I think the MS strategy is to move the focus of the industry from selling games to releasing them only in subs, which would kill most publishers, devs and specially the other platform holders like Sony or MS.

 

[DForce]

It wasn’t regular.

It was 3.6 billion.

Bungie operate independently. They are not independent.

They operate under SIE just like Playstation studios.

Insomniac were different as they were put into Playstation studios.

That’s the only difference.

I said Bungie operates independently under Sony, but we don't know the agreement both parties have in place.

There are contracts and agreements involved, and if something doesn't go Bungie's way, then there's probably an out for them. A

 

[Muddasar]

I said Bungie operates independently under Sony, but we don't know the agreement both parties have in place.

There are contracts and agreements involved, and if something doesn't go Bungie's way, then there's probably an out for them. A

The agreements are at Sony’s discretion since they are the boss.

The out for Bungie is to give the 3.6 billion back.

You don’t sell your ass and expect to run the show at the same time.

 

[Thunderstorm__]

Can somebody enlighten me on how Bungie could split way with Microsoft despite being owned by them? This is still something I do not really understand

 

[Muddasar]

Can somebody enlighten me on how Bungie could split way with Microsoft despite being owned by them? This is still something I do not really understand

They bought themselves back.

Activision on the other hand never owned them. It was a contract to publish their games.

 

[Muddasar]

Can somebody enlighten me on how Bungie could split way with Microsoft despite being owned by them? This is still something I do not really understand

Just wanted to add that the stipulant to Bungie buying themselves back was Microsoft got to keep Halo.

Both parties agreed.

 

[DForce]

The agreements are at Sony’s discretion since they are the boss.

The out for Bungie is to give the 3.6 billion back.

You don’t sell your ass and expect to run the show at the same time.

You don't sell unless you have agreements in place. This is why they have contracts. Bungie has shown they are willing to depart if upper management is forcing them to do things that they're not willing to do.

And they likely still own the Destiny IP as part of this agreement.

So you can repeat sell their ass all you want, but that doesn't change the fact that there are agreements and likely contracts in place.

 

[Muddasar]

You don't sell unless you have agreements in place. This is why they have contracts. Bungie has shown they are willing to depart if upper management is forcing them to do things that they're not willing to do.

And they likely still own the Destiny IP as part of this agreement.

So you can repeat sell their ass all you want, but that doesn't change the fact that there are agreements and likely contracts in place.

You don’t sell if you want freedom and independence to make your own decisions.

What planet are you living on mate?

You ever sold a car or house and still have control over them?

Could you ask the buyer to put that in a contract?

The whole we are independent is optics.

 

[DForce]

You don’t sell if you want freedom and independence to make your own decisions.

What planet are you living on mate?

You ever sold a car or house and still have control over them?

Could you ask the buyer to put that in a contract?

The whole we are independent is optics.

I should be asking you the same thing. This is more complex than owning a car.

Are there merger/acquisition agreements? Yes or no?

The answer is yes. The contracts are agreed upon before selling yourself to another company. If that contract is broken, then so is the merger. This happens. You wouldn't sell yourself unless certain conditions are met. You're overstepping this fact by saying, "They bought it so they have 100% control" and that's not always the case.

If MS buys ABK but with structural remedies, then they don't have 100% control over what they can do.

These contracts exist for a reason, and it's clear Bungie wouldn't sell to Sony unless agreements were set in stone.

I can't sit here and debate if someone is going to repeat the same argument over and over again.

 

[Muddasar]

I should be asking you the same thing. This is more complex than owning a car.

Are there merger/acquisition agreements? Yes or no?

The answer is yes. The contracts are agreed upon before selling yourself to another company. If that contract is broken, then so is the merger. This happens. You wouldn't sell yourself unless certain conditions are met. You're overstepping this fact by saying, "They bought it so they have 100% control" and that's not always the case.

If MS buys ABK but with structural remedies, then they don't have 100% control over what they can do.

These contracts exist for a reason, and it's clear Bungie wouldn't sell to Sony unless agreements were set in stone.

I can't sit here and debate if someone is going to repeat the same argument over and over again.

So the 3.6 billion Sony gave Bungie was goodwill?

You make it sound like it was a marriage contract.

Microsoft are free to turn ABK into dust once they have paid and the acquisition is closed.

It’s their property.

Not wasting my time here. This acquisition must be the most unique in history.

The bought is the one calling the shots and the owner is accepting it.

 

[Vertigo]

They bought themselves back.

Activision on the other hand never owned them. It was a contract to publish their games.

It cost Bungie 100 million to leave the Activision deal.