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Forums - Sony Discussion - How much Sony will loss from Activision?

Illusion said:

Really stupid question here. I don't pretend to know a whole lot about the PS/Xbox universes but are we sure that Activision will stop releasing content on the PS5? I mean, Microsoft acquired Minecraft but the games still came to the Wii U and the Switch. Banjo Kazooie and Goldeneye (rumored) are also making appearances again on Nintendo consoles. For MS to ban Activision from releasing content on the PS5 when the PS5 comprises a huge chunk of yearly CoD sales seems like a questionable business decision even if MS and Sony are direct hardware competitors.

The only way that it would make sense for Microsoft to bar Activision from releasing games on the PS5 is if MS thinks that it can squeeze Sony out of the console market completely. I doubt that this will happen given how powerful the PS brand is. Even if Microsoft was in a position to do this, given that company's history with antitrust issues I am not sure that they would even want to try this given the public optics. It makes sense to me that Microsoft will still want to profit from the extremely large PS5 user base. I think that Microsoft will, at worst, continue to release the big titles on PS and XBox but hold back a few features for the XBox audience or maybe release COD a month earlier or something on XBox. I wouldn't see this as catastrophic for Sony or the PS5.

There is also the possibility of talent leaving Activision and forming new studios like what happened to Rare around the time that Microsoft bought it. Sony has a good relationship with third parties and not every top developer wants to work for a massive company like Microsoft. I am sure that Microsoft has been well-advised not to shake things up too much with the acquisition.

I wouldn't call your question stupid but it is extremely biased toward Sony. Microsoft is not banning or barring anything from Sony. What they did was make a major acquisition to strengthen their Xbox gaming division. Why are you still going back to the Minecraft acquisition when the Bethesda acquisition makes a lot more sense for comparison again bias toward wanting games to remain on your favorite console. 

It's pretty clear that with this acquisition that won't close till early 2023, there will be a game-by-game decision again on if those new entrants will be exclusives to Xbox or if there is an existing contract. Even if the game is not exclusive the simple fact that most of the future Activision's games will come day and date on Game pass will result in massive loss of software sales on Sony consoles.  

Microsoft did not make these acquisitions to boost their sales on Sony consoles. I'm not sure where you guys are getting this pointless argument that Microsoft would care about profit from selling to Sony since that profit would be 5X greater if they can take a customer away from Sony. They lost the last generation and are trying to grow their userbase to match or surpass Sony this generation.  

It's funny that you would mention Microsoft being afraid of talent moving from Activision and going to Sony. When in reality Microsoft now has 30 gaming studios to Sony's 17 gaming studios. If anything Microsoft with all the recent growth has been poaching all of the Talent available in the industry to staff their new studios. Many of the studios under Microsoft's umbrella with the new funds have been able to grow their studios and have needed much more staff. Besides, Microsoft has embraced allowing their studios to keep their identity and operate separately under their Xbox gaming division. In your statement, you failed to realize that Sony is also a massive corporation that has faults of its own and you seem to think everyone would rather work for a Sony studio, that's simply not reality. When it comes down to it people work where they live and for the most compensation. Major purchases like these come with lots of potential rewards like stock options, new opportunities, and new roles for employees. Games are made with 1000s of game developers and it's not the move of one or two key personnel that will impact that game creation. 

You are clearly misinformed when it comes to Sony's current position in this generation. The last generation Sony outsold Microsoft consoles 2 to 1. But, this generation Sony lead has shrunk quite a bit and this 68 billion dollar acquisition is trying to make sure that the gap between the two is even smaller. 

The real impact here is not how much Sony loses on royalties from selling Activision games but rather how much consoles sales will they lose by not having Activision's games. These mega acquisitions are all meant to grow Xbox gaming divisions and in that nature Xbox console sales. This explains why sony stock dropped by 20 Billion after this announcement. This is a mega acquisition that is intended to change the current landscape in the console market and gaming sector. 

Last edited by yvanjean - on 21 January 2022

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yvanjean said:

Even if the game is not exclusive the simple fact that most of the future Activision's games will come day and date on Game pass will result in massive loss of software sales on Sony consoles.  

Microsoft did not make these acquisitions to boost their sales on Sony consoles. I'm not sure where you guys are getting this pointless argument that Microsoft would care about profit from selling to Sony since that profit would be 5X greater if they can take a customer away from Sony. They lost the last generation and are trying to grow their userbase to match or surpass Sony this generation.  

When it comes down to it people work where they live and for the most compensation. 

You are clearly misinformed when it comes to Sony's current position in this generation. The last generation Sony outsold Microsoft consoles 2 to 1. But, this generation Sony lead has shrunk quite a bit and this 68 billion dollar acquisition is trying to make sure that the gap between the two is even smaller. 

The real impact here is not how much Sony loses on royalties from selling Activision games but rather how much consoles sales will they lose by not having Activision's games. 

How do you figure Sony is losing a lot of software sales from a game releasing day 1 on GP? Has that happened with any 3rd party release so far? Did that happen with Sony's own MLB release? I'm curious where figures show that Sony is losing out big time here, because nothing I can tell so far suggests this is the case at all.

And no one is suggesting that Activision is making these plays to keep pumping out games on PS5. The Bethesda deal clearly shows, to most people, that MS will keep the vast majority of what they release exclusive.

And yes, there are myriad reasons why someone might choose to work at one place over another. Nothing suggests that staff are going to stick around with an MS owned company either. I highly doubt there is any data to suggest what employees will do because their choices are based on many things. Talent moves. That's the reality of the industry.

Amphere Analysis has shown the PS5 outselling XSX in all 3 quarters that they have been out. Last numbers had them at 12.8m (PS5) to 6.7m (XSX). Their 2022 outlook has them surmising that the PS5 outsells at 2:1 (18M:9M). Suggesting that Sony's lead has 'shrunk quite a bit' is disingenuous to say the least.

I also don't think that hardware sales are the key factor here for Sony. Sure, they're bound to lose on all fronts, but hardware is not their major revenue driver: it's digital software. And this acquisition stands to hit their digital software revenue, as Vanguard appeared in the top 10 selling PSN games for both PS4/ PS5 in both US and EU (Black ops appeared in 3 of those 4 items). As an MP heavy game, this will also effect their subscription revenue (which at times is greater than that of hardware). 

Of course, it's far too early to tell what affect this is going to have on Sony. This year might see some interesting trends with their quarterly updates for their 2022 financials. That should start to give us some evidence of how they'll be affected.



MS is going to win North America if they pull it from PS5 for starters.



Its not just about the royalties Sony loses (although those will be a lot). It's that Call fo Duty was one of the main reasons PS4 sold as well as it did. Between 2017 and 2020, the most downloaded game every year was the newest Call of Duty game. This was even more than Marvel's Spider Man and God of War in 2018 (they were actually number 3 and 4 respectively). Despite what many people claim here, Sony's first party games are not the main driver of hardware sales. It's mostly third party titles, including Call of Duty, GTA and FIFA. Sony can't draw people to their systems in the same way Nintendo has been able to do. Beyond just Call of Duty, it hurts shooters in general, since most people will get an XBox for FPSs now, since CoD will be the home of XBox. The truth is this is a catastrophic hit that could jeopardize the PS5. Sony has been relying on third parties to push the hardware, and often has made exclusivity deals to keep games of competitors consoles. Now, Micorsoft can just buy up the publishers, which makes it harder for Sony to compete, and their first party line-up isn't up to snuff to keep the system going. Combined with the chip shortage and poor software sales, the Playstation could be in serious trouble.



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At the very least they should still hit 100 million PS5s. I say this because PS1 PS2 sold over 100 million without any COD or TES and FO



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VideoGameAccountant said:

Its not just about the royalties Sony loses (although those will be a lot). It's that Call fo Duty was one of the main reasons PS4 sold as well as it did. Between 2017 and 2020, the most downloaded game every year was the newest Call of Duty game. This was even more than Marvel's Spider Man and God of War in 2018 (they were actually number 3 and 4 respectively). Despite what many people claim here, Sony's first party games are not the main driver of hardware sales. It's mostly third party titles, including Call of Duty, GTA and FIFA. Sony can't draw people to their systems in the same way Nintendo has been able to do. Beyond just Call of Duty, it hurts shooters in general, since most people will get an XBox for FPSs now, since CoD will be the home of XBox. The truth is this is a catastrophic hit that could jeopardize the PS5. Sony has been relying on third parties to push the hardware, and often has made exclusivity deals to keep games of competitors consoles. Now, Micorsoft can just buy up the publishers, which makes it harder for Sony to compete, and their first party line-up isn't up to snuff to keep the system going. Combined with the chip shortage and poor software sales, the Playstation could be in serious trouble.

All these Sony doom and gloom posts always seem to be based on a reality from like a decade ago. It's all very similar to those constant posts about how important Japan was for hardware sales, and how Sony could sell immensely well if they just dedicated money to funding JPN centric games. Whether it's the former or the latter, the current climate seems to always be largely ignored. 

Like, few, if any, people actually believe that Sony's own games are the main driver for hardware. Seems likes you're just very clearly misrepresenting an argument to try make yours seems more valid. No one is going to disagree that 3rd party software is integral to the overall structure of PS. But your rather flippant regard that Sony's own software have not become a pillar of the PS identity is just wild to me. Sony's own software might not be the main appeal of owning a PS console, but it can't be denied that the very strong sales we've seen from their games are playing a role in hardware adoption. 

In terms of Sony content in the top 10 NPD for 2021 on PS consoles, we have:

Spider-man appearing in all 12 months (6th overall for all platforms in 2021 being a 2020 game)

Ghost of Tsushima appeared in 9 months (and is a 2020 game with a re-release)

mlb for 5 months.

And Ratchet for 4 months.

In previous years, you'll see other Sony games doing the same (just as you mentioned with GoW and SM in 2018). This suggests that indeed PS owners are actively buying Sony software. Where you get 'poor software' from is in itself pretty bizarre. 



I think the damage Sony is going to suffer is going to vary by region. In North America, the news is nothing short of devastating for Sony, because we have seen over and over again for 25 years that North American console buyers do not have brand loyalty and they follow the deals and the games. North American COD fans will switch to Xbox without a moments hesitation.

Outside of North America it gets a bit harder to predict. Even in the darkest days of the PS3 there was still a faction of buyers in the EU that still obstinately refused to buy an Xbox 360. But to think that 0 will change over I think is also optimistic on Sony’s part



There is still two years of CoD on PS platforms and who knows what will happen between them and now. And even if the next CoD (2024) is Xbox console exclusive they still have Warzone 2 on PS platform alongside other massive games like Fortnite, PUBG and Apex Legends for competitive shooters.

Its hard to predict. For all we know some other IP could take the helm as the casual FPS for the masses. Like how Fortnite came out of nowhere and dominated the BR genre. Though Sony's will feel it in the coming years maybe PS users will shy away from the annual/bi annual COD's and look elsewhere for their shooter itch - there's a few alternatives out there.



CoD will continue releasing on Playstation for at least a couple more years. The loss/departure in potential sales/players (2 million units/ 6 million players lifetime) will probably be offset by growth elsewhere including a number of wild cards. The last thing you want to underestimate is Sony's ability to foster their studios/partners (2nd parties) and create new huge IP's, this time they're investing heavy on MP games and should be expected to succeed in making at least one big MP IP. Until mid 2018, no one could foresee Sony having multiple 10 million+ series, let alone 20 million+. I'd only start to worry if Horizon 2, GT7, and Ragnarok notably underperform (and even then, that could be explained by the new pricing model, and the majority of players wanting to play them on the scarce PS5).

I'm in the opinion that CoD needs Playstation much more than Playstation needs it. CoD by itself is not a threat. The threat is the combined impact of those acquisitions (Take Two may be next for all we know) + the promised Game Pass value. Now if CoD was pulled BEFORE the start of the generation, that could have spelt trouble, but this isn't what's happening.



aTokenYeti said:

I think the damage Sony is going to suffer is going to vary by region. In North America, the news is nothing short of devastating for Sony, because we have seen over and over again for 25 years that North American console buyers do not have brand loyalty and they follow the deals and the games. North American COD fans will switch to Xbox without a moments hesitation.

Outside of North America it gets a bit harder to predict. Even in the darkest days of the PS3 there was still a faction of buyers in the EU that still obstinately refused to buy an Xbox 360. But to think that 0 will change over I think is also optimistic on Sony’s part

Agreed with this which is why I also think BC will be important. You want people who are thinking of leaving to have to really lose something and losing all the games you built up over the ps4ps5 generation isn't something everyone will want to do.

Hell just me having to leave my achievements behind on 360 when I switched to PS4 was hard.