As investigations continue into Microsoft’s bid for Activision Blizzard, the inner workings of the game industry surface with new information about platform banning and which company is winning the cloud gaming battle.
According to a combined 133-pages from both Microsoft and Sony regarding arguments for and against the acquisition of Activision Blizzard, Sony is claiming that the success of Game Pass is yet another reason for regulatory bodies to nix the deal.
The tacit admission that Game Pass is out ahead of Sony’s revamped PS Plus offering arrived in its arguments to the UK’s Competition and Markets Authority (CMA) against Microsoft and Activision wherein the company argues that Game Pass adding 4M more subscribers to its previous 25M in under a year is a threat to its current 45.4M PS Plus user base.
Sidestepping Sony’s fuzzy math, the company’s real argument is on display in previous quarters where PS Plus sat with 47.4M users, which highlights a 2M user loss over its Q2 FY22 reporting. It isn’t that Microsoft is raging ahead of PS Plus, but with only two other major competitors in the market, it’s easy to draw a line from Game Pass’ user growth to Sony’s recent losses. Another nuance in Sony’s reporting is that the company doesn’t break out the number of subscribers to its various tiers within PS Plus.
While Game Pass is an upfront subscription service and represents a 1:1 for paid monthly user numbers, Sony’s PS Plus includes an Essential, Extra and Premium tier. Within context, it now makes sense why Sony’s mixed 45.4M user base may not be as competitive as Microsoft direct pay 29M Game Pass crowd.
Microsoft’s response to the notion that Game Pass is a threat to Sony’s gaming position could be summed up as, “We’re seeing success in day and date releases, you should do that too.”
Further, even if Microsoft succeeds in growing Game Pass with the addition of Call of Duty, the CMA also would have to satisfy itself that Sony could not respond through investments or improvements in its service. It is clear that Sony has a range of options to maintain or improve the competitive position of PlayStation Plus. “At a minimum, Sony could include additional first- and third-party releases in PlayStation Plus on the ‘day and date’ release. Sony’s first-party exclusives not currently included in PlayStation Plus include prominent titles such as The Last of Us, God of War, Spiderman and the Final Fantasy VII Remake. The inclusion of such titles would be beneficial for gamers.
Unfortunately for Sony, first-party exclusives make the company a ton of money. Sony’s recent God of War: Ragnarök shipped 5.1M copies in the five days, but if Sony followed Microsoft’s suggestion it would be jeopardizing a potential $350M in sales by putting the title on its PS Plus on day one.
During an investors meeting, president and CEO of Sony Interactive Entertainment used a myriad of euphuisms to justify why following Microsoft’s Game Pass model would be a disadvantage to the company’s bottom line.
We are in a virtuous cycle where success has allowed investment, which has generated more success, which is allowing us to invest more and will hopefully generate yet more success. “That virtuous cycle, we feel that if we were to move to a different model, which involved putting our AAA games into a subscription service on day one, we feel that there is significant risk that the virtuous cycle that we’ve established so successfully would be compromised and potentially broken.
From the looks of it, Sony was, and arguably remains, in the position to squelch Microsoft’s Game Pass trajectory if it could detach itself from the customary front load of cash from console exclusive titles.
However, that isn’t the only issue Sony has with Microsoft’s Game Pass or Xbox as more documents in its fight to sideline the Microsoft Activision deal reveal that it may have attempted to put PS Plus on its rival’s console.
While Sony does not point to a specific date, time, representative statement or platform policy that can back up the claim that PS Plus isn’t allowed on the Xbox, the company has stated that Microsoft blocked PS Plus from appearing on Xbox. Presumably, Sony is using the claim of PS Plus being blocked from Xbox as a counter argument to Microsoft’s claims that it has tried to bring Game Pass to PlayStation with no success.
As of now both claims from Microsoft and Sony appear to be rhetorical jockeying for favor with the CMA with only the anecdotal evidence that neither are currently represented on each other’s platforms as further fodder for their own arguments for and against the Activision deal.