A friend asked whether Sony has taken a backseat in gaming (even though he admitted he feels they’ve still been delivering an incredible library for a while). So despite observing that Sony’s quality is still there, in the mind of a consumer it still prompted the question of whether something was missing, and where the company stands after Microsoft’s announcement to acquire Activision-Blizzard for $69bn.
Consumer sentiment is mixed, some thinking that Microsoft will magically fix issues that plague popular titles like Call of Duty, others thinking that “this is the end of Sony.” It’s fascinating to see people associate splashy acquisition headlines with a guarantee of positive change/results.
Not all M&A transactions are consummated successfully. Post-acquisition, an integration process takes place — there are often full teams dedicated to this transition, and it can get complicated very quickly. So much has to go right for ATVI, and all of its IP, to be successfully subsumed into Microsoft.
The reality is that Sony is just different in the way they conduct acquisitions. They are more focused on pre-integrating before making a move — “try before you buy.” For example, it’s probably not commonly known that Sony Interactive Entertainment made five acquisitions in 2021. For undisclosed sums, they acquired Bluepoint Games (Demon Souls), Nixxes Software, Housemarque (Returnal), Firesprite (The Persistence), Valkyrie Entertainment. Additionally, the team absorbed Team Asobi (Astro’s Playroom) into PlayStation Studios. In 2019, the team made a substantial acquisition of Insomniac Games (Spider-Man) for $232.5m.
The truth is that Sony has just been very intelligent in acquiring studios, but it doesn’t carry the same “wow” factor of an acquisition that breaks records. It will take Microsoft a long time to realize the full value of its investment. Sony, on the other hand, is building relationships with studios early. As a result, they can acquire assets cheaply and consistently deliver world-class content. That is why I believe they still have a practical edge in content deployment.