An internal Sony document has leaked, revealing how the company now considers Microsoft’s successful acquisition of Activision Blizzard King as a serious threat to their business.
Jayrock shared two slides on Twitter with some interesting assertions. To be clear, some of Sony’s claims dispute what Microsoft has claimed. The seeming goal of this document is for investors to consider the merger a threat to their business, as well.
We will focus on the second slide, where Sony refers to the threat of Call of Duty in 2027. By saying this, Sony implies that Microsoft will not renew their promise to bring Call of Duty games after the current five year contract. Subsequently, they come to several conclusions after that, such as that future Call of Duty games will be Microsoft exclusive, and could be on Game Pass.
Notably, Sony refers to this as a “massive threat to PS+ (upwards of $1.5B of annual revenue threat, gap to fill). They also share a formula of 45m subs x $ 12 monthly x 12 months x 20 % MP 3rd party. Presumably, this is where they got the $ 1.5 billion dollar figure.
So Sony is telling their employees and investors that the company recognizes future Call of Duty games as a threat. We don’t know the full context, but they may be planning on making new games to rival Call of Duty as a result.
In other parts of the second slide, Sony criticizes Microsoft’s game subscription approach, referring to a perfect game sub model as elusive. Sony claims that game subs are unsustainable, because it creates expectations for a constant stream of ‘free,’ best-in-class games. This perhaps explains why Sony doesn’t pay for a lot of AAAs to come to PlayStation Plus, especially debuting them day one on the subscription service, themselves.
Sony also says that a unified PC, console, and mobile experience doesn’t exist, and that Sony’s own premium sales model is their own impact in the industry.
We should remember that these details are not ad copy that Sony put out to convince people to by consoles, or for fans to discourse over. This is an internal document, so these are arguments the management is making to convince the employees and/or investors of a certain argument.
That argument seems to be that Sony is still steering in the right direction, but they acknowledge Microsoft could do serious damage to their video game business. We do expect that messaging to be self-serving, but the fact that it’s argumentative seems to indicate not everyone at Sony is convinced management is making the right decisions.
In any case, we now know Sony will be spending the next five years strategizing vs their perceived threat from Call of Duty, which was previously their cash cow. It will be interesting to see if Sony will create their own annualized military shooter franchise. Could they revive SOCOM or Resistance for this purpose? Or do they have a new IP in mind? This seems to be the looming future of the video game industry.
