DonFerrari said:
chakkra said:
Err.. I actually said that I would like for this deal to get blocked.
The reasons why I would like for this to get blocked?
1) I don't think Activision is worth $70b and I think that GamePass gamers could be getting a lot more for that amount of money.
2) The whole media (and Sony fans) are acting like getting this deal blocked would be a victory, and I would like to see their reaction when they finally realize that this deal going thru might very well be the best case scenario for Sony (and Playstation gamers).
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I fail to see how ABK deal would benefit Sony and PS gamers.
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it's not that the ABK deal benefits Sony his saying that the drawback of this deal for Sony might be less than those caused by other possible action by MS for this amount of money.
The most likely though is that investor won't make the $69B available for Xbox to use right away for many reasons and Xbox will need to fight for this amount to be converted into others Xbox investment.
That's said lets entertain the idea that MS is fully committed to Xbox because they have a lot of faith in GamePass and see an urgency to act fast and secure this market and so they actually make the whole $69B available. Which you know ain't out of the realm of possible.
There's a lot of way that Xbox may use this amount of money that will end up impacting Sony a lot more than the ABK transaction directly or indirectly. In fact there not much Xbox can do besides organic growth, acquisitions, contracted development and hat deals and all have there impact on Sony and others. Anyway here what I find to be realist in this hypothetical scenario.
Organic growth: ($10B over 10 years)
Because talent acquisition is hard and creating studios from scratch is even harder and takes a lot of times and MS should already have budget for their existing studios expansions it is not realistic to use $69B in this manner. Both Sony and Microsoft have only build 2 new studios in the last 10 years (Team Asobi, Pixelopus, The Initiative and World's Edge) none over 100 employees today. $10B over 10 years may be used on this and even then it's seems like a stretch.
Impact on Sony:
MS would likely be Poaching talent left and right to grow it's internal studios/build new one. This may result in a talent drain for Sony and force them to raise salaries across the board causing both delays and increasing development cost for their own titles.
Studios acquisitions:(~$15B over 10 years)
No description needed but this is probably a low end figure, MS already stated they weren't done with acquisition despite de $69B deals so you would have to add to this figure the investment they were still going to make anyway. So in reality you need to probably double this to $30B/10 years.
Impact on Sony:
Reduce output and revenue from 3rdparties, reduced capacity to make deal with 3rd parties
Increase in 2nd party 3rd party Dev contract:(~$24B over 10 years)
This is not about money hat just fully contracted game dev to 2nb/3rd parties like Sunset Overdrive. AAA budget typically range from 30m to 300m+ nowadays but the later has more to do with sequels of popular Ips that bare low to no risk. When contracting though it will cost you more than inhouse dev so let's say an average of $150M/ titles that's 130+ titles over 10-15 years which can literally saturate this market.
Impact on Sony:
Reduce output and revenue from 3rd parties, reduced capacity to make deal with 3rd parties
Hat deals:(~$20B over 10 years)
The last know big hat from MS was Tomb raider for $100M I believe. This is a great example cause it highlights a deal on a very popular franchise witch Sony did let go. I'm sure game like Ghostwire Tokyo and Deathloop being new Ips would not have have been as expensive to MS and were probably even less expensive to Sony but let's just use the $100M as average. That's 200 AAA third party hats /10 years
Impact on Sony:
Reduce output and revenue from 3rdparties, reduced capacity to make deal with 3rd parties
Now Sony would not be standing by doing nothing, they would need to react and make investment own there own to keep there position but this would mean Increase spending and reduced profits margins.
Now compare those impacts vs simply allow MS to acquire ABK and sign the 10 years CoD deals. Furthermore, I believe if Sony was willing to sit with MS they could use the challenge regulator pose to MS to make a 10 years deal not only CoD but every ABK franchise worth mentioning (Diablo, overwatch etc...) witch I fully believe MS would be forced to accept.
So Sony could almost completely negate direct impact of the deal to themselves and the only impact the would still exist are:
- No more CoD marketing deal. This is mitigated though by the fact the 10 years deals completely remove such practice from the franchise so it's not like MS is gaining this back
- No More New Ips game from ABK. But ABK isn't known to produce new Ips and it will be many years before such impact manifest itself
- GamePass may become a juggernaut. This is probably the single most significant reasons Sony try to stop the deals but that ship has already sailed IMO. if the deals fails that's not a blow to GamePass/Xbox ambition only a short term slowdown.
Last edited by EpicRandy - on 01 March 2023