Reaction: What Happens to PlayStation if Microsoft Buys Activision Blizzard? 1
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Well, then – here we are. As perhaps even eternal optimists may have anticipated, US regulator the Federal Trade Commission has lost its case against Microsoft, meaning there’ll be no preliminary injunction to prevent its Activision Blizzard acquisition from closing before its 18th July deadline. And in dramatic fashion, the house of cards has subsequently collapsed, with the UK’s Competition and Markets Authority effectively admitting that it’ll return to the table to renegotiate with the Redmond firm.

While we’re still sceptical of speaking in definitives – this entire saga has brought about more twists and turns than a sensationalist Netflix documentary – it’s looking like the $69 billion buyout is now on the precipice. And therefore it’s probably an appropriate moment to consider what the deal closing would actually mean for PlayStation, and what its next moves are likely to be. After all, we’re all viewing this deal through the lens of being PS5 and PS4 owners, so it’s worth discussing.

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In the short-term, the answer is fairly obvious: very little. Even in the unlikely event of the deal closing tomorrow – and it won’t, because the Xbox maker still needs to work through those aforementioned issues with the CMA – it’ll take a considerable amount of time for the publisher to be integrated under Microsoft’s umbrella. Moreover, Sony still has marketing rights to this year’s Call of Duty game, and the Redmond firm has obviously committed to ensuring the franchise remains multiformat for at least a decade.

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That means even in 2033, you’ll still be able play Call of Duty on PlayStation – and that’s assuming the franchise retains its enduring popularity, because there’s obviously no guarantee it will. As for other Activision Blizzard titles, Crash Team Rumble, Diablo 4, and Overwatch 2 have all just launched – and it’s unlikely any changes would be made to in-development projects, so you can certainly expect continued PS5 and PS4 releases from the publisher for at least the next 18 months, if not more.

It should be noted that despite its monolithic scale, Activision Blizzard doesn’t actually release many games outside of Call of Duty, and there’s a reason for that: the first-person franchise has slowly consumed all of its development resources, with dozens of teams now assigned to sustaining the series. There’s some hope from the most enthusiastic Xbox fans that this acquisition will usher in a new era of output from the legendary publisher, but it seems hugely optimistic to us – especially if the notoriously resource heavy Call of Duty is, as promised, now going to release on more platforms, like the Nintendo Switch.

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But if not much is going to change for PlayStation in the short-term, then where’s the fire? Well, it’s the precedent that this acquisition sets – and the context in which it’s unfolding. It’s important to remember that Microsoft has already purchased one traditionally third-party publisher in Bethesda, and now it’s on the cusp of blowing $69 billion on the industry’s biggest. We know it’s had its beady eyes on others like Square Enix and SEGA, although ultimately didn’t follow through.

Sony’s business model relies on strong third-party support, as it’s through these games that it earns the vast majority of its revenue. In fact, increasingly PlayStation is earning more and more of its money through microtransactions, with in-game purchases driving its income to record levels. It’ll continue to make a substantial chunk of change from Call of Duty for the next decade at least, but its traditional business model is under threat if more third-party franchises eventually end up exclusive, and it’s going to need nous to navigate these turbulent times.

The reason for this is because, despite being an organisation of considerable wealth, the Japanese giant simply doesn’t have the financial resources to compete in the playground that Microsoft’s engaging in. That means retaliatory acquisitions are simply out of the question, and therefore there is a very real danger other publishers could be snatched away. While it’s admittedly unlikely, it’s a potential risk that PlayStation may need to plan for if it intends to remain solvent for decades to come.

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Sony’s current business model operates on razor thin margins, where it spends extraordinary sums of money on marketing to expand its install base and drive further revenue. In this scenario, it should be underlined that many of its first-party projects also act as a form of brand advertising: recent documents revealed that exclusives like The Last of Us: Part 2 and Horizon Forbidden West cost over $200 million to develop – and those figures are only going to rise.

PlayStation invests these extraordinary sums into first-party development because these games help to sell PS5 and PS4 consoles, but its business model only works with the revenue it’s generating from third-party games to prop it up. This is the potential pitfall that Sony now faces: the Activision Blizzard buyout alone is unlikely to dramatically impact it, but if it sets a precedent where other publishers fall, then the platform holder could be in trouble.

Many have argued that PlayStation could simply follow Nintendo’s route, where it’s historically been able to sell systems on the strength of its own software alone. But, with the greatest of respect to the Mario maker’s output – and regardless of which games you personally prefer to play – there’s a gulf between the production values in, say, Pikmin 4 when compared with God of War. Sony’s entire publishing output is defined by its big budgets.

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And there’s another wrinkle to this which is proving a major threat to the status quo: Microsoft wants you to play its games as part of a subscription. While there’s no evidence that the scales have reached tipping point just yet – in fact, consumer adoption of services like Game Pass has stalled in the United States – there is a danger that it could eventually impede the sales of full-price games. At which point, PlayStation could find itself in a position where it has no other option but to launch its games into PS Plus – further compounding the issues with its business model.

Of course, all of this is hypothetical – and potentially years away at that. It also assumes any purchased publishers would follow in Bethesda’s footsteps and largely transition to Xbox exclusivity, where there’s no guarantee that’ll necessarily be the case. The positive for PlayStation, regardless, is that it has time on its side: its highly successful business model is not going to collapse in the next five to ten years – if it even does at all. And if there is a scenario where some of the outcomes outlined in this article come to pass, it has plenty of time to create contingency plans and pivot accordingly.

So in the here and now, PlayStation is unlikely to be affected by Microsoft’s big money purchase of Activision Blizzard. However, the organisation is going to have to be aggressive, nimble, and smart if it’s to overcome the very real challenges it faces. Hopefully it can come out of this scenario stronger and continuing to deliver the type of games we all know and love – but it’d be naïve to assume it’ll be all plain sailing from here onwards.

What do you think Microsoft’s proposed purchase of Activision Blizzard means for PlayStation? Are you concerned for the future of Sony’s gaming brand? Do you think everything will be hunky-dory regardless? And what should the Japanese giant do if the deal goes through? Let us know in the comments section below.

Is Microsoft's proposed purchase of Activision Blizzard a concern for PlayStation? (3,148 votes)

  1. Yes, it'd be naïve to assume this won't impact Sony's business51%
  2. Maybe, but it could take years before we see any real impact33%
  3. No, this won't affect PlayStation in the near or far future16%