Console War: Recent Developments and Future Implications

Summary

1 – No, the “console war” is not over

The ongoing competition between Sony and Microsoft in the gaming industry has not come to an end, despite lasting for over 17 months. Recent developments, including the lawsuit between the FTC and Microsoft, have escalated tensions between the two companies. Jim Ryan, the head of PlayStation, has accused Microsoft of harassment due to their document requests. Ryan also revealed that he rejected a partnership with Microsoft for Call of Duty and criticized the Game Pass for devaluing games in the eyes of players.

2 – Microsoft wants to become the leader of the video game world

In the lawsuit between the FTC and Microsoft, it was revealed that Microsoft aims to become the dominant force in the gaming industry. As part of this goal, they plan to double their revenue from $16 billion to $32 billion over the next 7 years. Microsoft intends to achieve this by increasing the adoption of Game Pass among PC and mobile players and pursuing acquisitions. For more details on their revenue doubling strategy, watch the video accompanying this article.

3 – Gaming will now be more scrutinized by the powers that be

Microsoft’s pursuit of the most expensive tech takeover in history, the acquisition of Activision Blizzard for $69 billion, has attracted the attention of regulators such as the FTC, the CMA, and the European Commission. This event could set the stage for further major takeovers where regulatory agencies will play a crucial role. Additionally, concerns have been raised by American politicians about Sony’s business practices in Japan potentially hindering US companies’ ability to compete in the Japanese market. The future may bring increased scrutiny of Sony due to its perceived violations of the 2019 digital trade agreement between the US and Japan.

4 – If validated, Microsoft will become the No. 1 publisher of PlayStation consoles in the USA

If Microsoft’s takeover of Activision Blizzard is approved, they will gain ownership of over thirty first-party studios, including those behind the successful Call of Duty franchise. This would have significant implications as Call of Duty games have been top-selling titles on the PlayStation Store in recent years. For more information on the financial success of Call of Duty, watch the accompanying video.

5 – Exclusives remain central, and Xbox intends to have fun

In the past, Microsoft was criticized for its limited focus on exclusives compared to other gaming companies. However, Phil Spencer, the head of Xbox, has stated that exclusives will be considered on a case-by-case basis. The acquisition of Bethesda has already resulted in exclusive titles like Starfield and Redfall, and leaked documents from the FTC and Microsoft lawsuit reveal more Xbox and PC exclusives from Bethesda’s studios. Despite tensions around exclusivity, Microsoft has promised to release the Call of Duty franchise on multiple platforms. The European Commission has stated that even if Microsoft were to remove Activision’s games from PlayStation, it would not significantly harm competition in the console market.