Xbox and Activision: Sony says it fears Call of Duty and Xbox Game Pass in a document | Xbox One

Occurred at the beginning of the year, the acquisition of Activision Blizzard by Microsoft for 70 billion dollars was a real earthquake in the industry. The transaction is now confirmed, many steps still need to be taken before Activision Blizzard is finally under the leadership of Microsoft, and the acquisition must be approved by the regulatory authorities of the competition around the world. The results of one of the commissions based in Brazil have just been revealed and it contains a lot of interesting information related to the opinion of the major groups in the sector in obtaining questions, especially at Sony.

For Sony, Microsoft should start with this acquisition

A Brazilian law firm was responsible for this survey of several tech multinationals, all of whom answered a dozen questions. The documents, written entirely in Portuguese, have just been made public and we are sharing Sony’s words with you today.

The Japanese giant, Microsoft’s main competitor, has been in the spotlight for months after announcing this record acquisition, but also following other takeover rumors in the video game industry.

First, Sony talked about the difficulty of making one of the big-budget, AAA games as popular as Call of Duty in the video game industry. Such developments require a huge budget of several hundred million dollars and according to Sony, there is no current player in the industry that has the possibility to create a potential rival to Call of Duty, which built over many years.

“Making a high-end AAA game (like Activision’s Call of Duty) requires a budget of hundreds of millions of dollars and thousands of employees. »

“Competitors of Microsoft and Activision in game development and publishing include SIE, Nintendo, EA, Ubisoft, Epic Games, Riot Games, Warner Brothers Interactive, Rockstar and Take-Two (owner of Rockstar and 2K). But , apart from Activision, there are few developers/publishers capable of producing AAA games, such as EA (FIFA), Take-Two/Rockstar (Grand Theft Auto) and Epic Games (Fortnite). in development, and fanatical following. And despite the big budgets and resources, none of these developers could create a franchise that could compete with Activision’s Call of Duty, which stands as a game category in his own right.”

So Sony admits that the presence and cultural impact of Call of Duty in video games and popular culture gives it a unique and almost impossible place to get in this sector. The license benefits from a loyal and hardworking community that will not abandon ship even if another studio has the possibility to offer an FPS equivalent to Call of Duty.

Later in the document, Sony discusses Xbox Game Pass and the place of subscription services in video games today. This evolution of video game consumption has created real competition in the sale of games that are bought complete, at a time and in reality, with a severe reduction. Sony believes that the lower cost of subscription services will be anti-competitive against publishers who can recoup large investments in games by selling them for an upfront cost. By extension, Sony considered that it could negatively affect the quality of video game creations.

“Over the past five years, Microsoft’s Game Pass has grown to capture approximately 60-70% of the global subscription service market. This share is even higher in Brazil, where Game Pass accounts for about 70-80% of the PC subscription service market. When Microsoft announced that it would acquire ZeniMax in 2020, Game Pass had almost 10 million subscribers. Even if each subscriber bought the cheapest level ($10 per month), that equates to over $1.2 billion in annual subscription revenue. As the graph below shows, when Microsoft announced it would acquire Activision in 2022, Game Pass had 25 million subscribers – a 38% increase since January 2021 – doubling the Game’s annual subscription revenue. Pass to at least $3 billion. »

Ultimately, Sony attributes the success of Xbox Game Pass to its ability to offer very different games to target a wide audience. Acquiring studios with different skills has been very useful for Microsoft and the Japanese giant takes the example of Double Fine, Obsidian Entertainment, Ninja Theory and Bethesda. By adding Activision to the equation, Microsoft could create a turning point in the video game industry and mark a huge lead over its competitors.

“Content, as the main driver of purchase decisions, is the most important barrier to establishing a digital distribution channel for PC, console and mobile games. A successful distribution channel -digital distribution must offer a wide variety of content (for example, different genres and different prices). One of the reasons that Microsoft’s Game Pass has grown so quickly is because Microsoft has acquired many third -party studios since 2017, including Double Fine, Obsidian Entertainment, Ninja Theory, and Bethesda, and they have added their content to Game Pass. Such acquisitions give Microsoft a greater content – even without Activision games. Add Activision games to that and the content represents a turning point.”

Now, Sony says it will take a potential competitor to Xbox Game Pass several years to become a worthy rival. While Call of Duty still represents an important source of revenue for Sony, Microsoft’s acquisition will hurt Sony’s growth.

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