Well okay, if we're talking about from the perspective of someone running the PlayStation division, then I wouldn't call this kind of speculative planning dumb. But I guess this is also me having an issue in general when it comes to speculating on acquisitions, because just in general it's not something I like to do. I couldn't of even seen this Activision-Blizzard one coming but if there were rumors beforehand I'd of just dismissed them. Just like how I dismissed the Take-Two ones, in fact.
This is the focus of this thread though. It's literally in the title. You as an executive of Sony, countering Microsoft's latest strategy. Which is acquiring as many developers, publishers and IPs as possible to brute force content output. Making Gamepass seem more compelling than ever with sheer volume and exclusives.
I wouldn't have expected Microsoft to acquire Activision Blizzard either. Solely because anyone smaller than Microsoft acquiring them would just be insane and not a good business decision. But Microsoft does have fuck you money. So even though I didn't see that coming, I was like ye makes sense.
True you didn't specifically mention Sega or Bandai Namco, but I threw them in because with these kind of fantasy acquisition talks they're two names that also tend to pop up a decent bit.
Otherwise again, from a business strategic POV yes it would make more sense for Sony to acquire someone like Capcom if it also hurts Nintendo. That said, you have to understand that this talk about the impact of acquisitions is being done mainly by us gamers, so you have to also understand that many of us would be looking that this from a perspective of how it could impact platforms we play on.
Which TBF is something we've been regularly seeing from people arguing in favor of either Xbox or PlayStation, but Nintendo always gets left out. I think it's down to the assumption that they operate in their "own lane" and their 1P carry them. Those things are true, but not as true or as absolutely true as some might think. Nintendo's still in the traditional gaming segment, so they're still in some way competing with Microsoft and Sony, moreso the latter since there is more overlap between Sony and Nintendo. And regarding the 1P, well definitely Nintendo enjoys more in profits from their 1P than Sony or Microsoft (if you ignore Minecraft), and that's helped by them not having as expensive hardware to manufacture. But we know how Nintendo systems perform when 3P is dead, i.e Gamecube and Wii U. They perform very weak in the market when that's the case.
Bandai Namco and Sega do get referred to a lot by others. But you were speaking about th OP. And in there I never mentioned anything about these 2 parties.
Yes if Sony gets Capcom and makes some current Nintendo games exclusive it will hurt the gamers. But that's the name of the game. Every company needs exclusives. Fans would have to take either or then. But most Nintendo games will still stay on Nintendo anyways. Only the IPs that Capcom owns would be exclusive to Sony (going by the assumption that we discussed earlier).
It's logical Nintendo often gets left out of most discussions. That's because Nintendo has no direct competitor. Their target audience is way different compared to Sony and Microsoft. Nintendo has done it themselves. They carved out a niche of which works perfectly well for them.
The overlap between Sony and Nintendo are marginal. Nintendo targets a way younger age group even though some of their games still speak to adults. Sony titles speak to some Japanese gamers mostly because of their 3rd party titles. Look at the best selling 1st party titles of Sony and then look at the best selling 1st party titles of Nintendo. They can't be further from each other. Now look at the best selling 1st party titles of Sony and that of Microsoft's. Much more similar right?
Remember, the 1st party exclusives are where the big 3 make the most money with. The way you use a Switch compared to the PlayStation and Xbox is also vastly different.
In the world of entertainment, content is king. If Sony or Microsoft were to wanna compete with Nintendo directly they would first need a console that plays similarly to that of Nintendo's. So you would need to make an extra console. Not only that but then you'd need to make titles that are comparable to that of Nintendo's. Both Sony and Microsoft made the right decision to not compete with Nintendo as they'd spread themselves way too thin then. They are having a tough enough time competing with each other. Now imagine doing that times 2. It would be nuts. It would be chaos and they would both lose their brand identity, even if they were to have enough studios to make Nintendo-like games.
This is probably where you and I are going to differ when it comes to what Sony's response should be. You want them to go tit-for-tat with Microsoft in big publisher acquisitions. This will eventually kill Sony, because they can easily lose focus of their core, and they wouldn't be the only ones eying the companies you mentioned, anyway, therefore driving up their purchasing cost, in some cases over 2x their market cap potentially. Microsoft already has to pay a 38% premium on Activision-Blizzard and that's a company mired in controversy which affected their stock price, and likely had at least another suitor (at least before the board members approached Microsoft with an offer...probably also before the controversy really started to affect their stock value).
Imagine what the selling price would be for the companies you mentioned, which aren't mired in anywhere near that type of controversy, some of which have a good deal of very strong IP, and would be valued by other companies like Tencent, Embracer Group, etc. for purchase. Zenimax sold for 2x their market cap as just an example. I'm not saying Sony doesn't have the money to acquire such a publisher, it's just that they may not have as much of that money when all's said and done if other bidders are raising the price during the process with their own bids. And that could quickly shut Sony out of the process unless they want to take out loans or mix in stock options which, depending on the seller, may not be desirable if other bidders can pay in pure cash assets.
Simply put Sony can't compete with a company like Microsoft when it comes to these type of acquisitions if a company like Microsoft are actually interested in the purchase. Now that's not me saying they're interested in ALL of those companies; Microsoft acquiring a Japanese publisher in the future isn't out of the realm of possibility but I strongly doubt it would be one such as Square-Enix or Capcom (in fact given their history I think that it would be Sega but I'm not here to speculate like that); they're not out to destroy Sony or Nintendo for that matter. So it's very likely if Sony wanted one of those publishers, they could get them, but if those publishers put themselves out on the market do you think other companies like Tencent wouldn't try getting in on that action? At which point, once you're talking the biggest conglomerates, it's a question of which one's the least of those "evils" (hate this term, just can't think of a better one) and generally speaking that ends up being Microsoft when considering willingness to work with other platform holders and still distributing owned content in other ecosystems one way or another (as well as funding and growing acquired talent and letting them have a fuller range of creative development).
If Sony's going to have a response, it's going to be them doubling down on what makes them great. They'll probably create a few more internal teams for some of their bigger studios like Naughty Dog, and will keep looking to bring several gaming properties into other media ventures prominently. I wouldn't be surprised if there's ever a God of War television series or movie in the future, for example. They'll look to bring that media content as benefits to the gaming side through subscription perks when they launch Project Spartacus, and they'll look for a way to bring more 1P content to PC including Day 1, probably by expanding out with a PC launcher and storefront they can monetize and provide subscription tiers to with perks equivalent to PlayStation owners of the service. As long as they do that and find ways to support PSVR2, they will be more than fine.
What a lot of these speculative acquisitions for Sony sound like to me, is them being reactive, and that's the worst thing they could do. Being in a position where you're simply reactionary means you don't have control, and it also means you can easily lose focus. That's exactly the problem Sega had when Sony came on the scene with the PS1, in fact Sega had that problem with the 3DO and Jaguar too (the 32X was a reaction to those, particularly the Jaguar). They tried going tit-for-tat with Sony, despite Sony having a lot more resources and money than them, and it hurt Sega very, very badly with the Saturn. Meanwhile Sega's real answer was right there the whole time, in tightly merging their arcade and home system markets into more of a whole not just technologically but perk/benefits-wise for arcade and home gamers. But they were too divided internally and too distracted by reacting to the market instead of being united and focusing on their strengths.
If you want Sony to have the same fate, then by all means keep asking for them to escalate into a massive acquisition war with companies 3x to 13x their size. It won't end well for them. It's clear Sony's acquisitions have been targeted towards either upstarts or teams they've worked with for a very long time, that for other companies might not bring a lot of value on their own but for Sony bring value in portfolio diversity for their ecosystem as well as sales in a lot of cases when paired with the right IP that Sony might have rights to (such as Spiderman). That's not to say Microsoft haven't been doing similar; their relationship with Bethesda goes back decades, for example. It's just that in their case those relationships happen to be with historically bigger developers who in some cases also became publishers.
You get me wrong, and you'd know if you read exactly what I said. The ones I want Sony to acquire if I were to be a Sony executive are the ones that are way smaller, with way less bloat and are the ones that are upstarts. I'd want them to acquire key individuals together with the people they work the best with. Aside from Capcom I don't want Sony to acquire any publisher. How's that going tit for tat? The acquisitions I calculated cost 7.7B, nowhere close to the 77B that Microsoft put on the table.
I gave the companies pretty generous valuations, in reality the total valuation of the actual acquisitions themselves are therefore pretty damn close to the 7.7B I mentioned. It will probably go towards 9B max. Which Sony can definitely afford. The risk wouldn't be too big. If they lose all of that it would set them back a little bit more than half a year, and that's only if they lose it all. Which let's be real, the hype alone would not make that happen. And even if it did, the positive buzz would also add valuation to Sony. It would add to Sony's public perception and image. Even if that can't always be put into numbers, that stuff is invaluable.
The selling price of the devs I mentioned will again probably be max 9B. Remember that I gave them super generous valuations. And even though they aren't mired in any way shape or form, they are upstarts with limited cumulative sales. Whereas Activision-Blizzard has proven over a decade long without fail that they are one of the best in the game sales wise.
As said previously, companies aren't static assets. People work there. People have preferences, dreams and aspirations. If people dont agree with the huge companies you mentioned who are able to make bigger bids, they will eventually leave. What will you have bought by then by overbidding? A shell of a company that basically is nothing more than just a name and showing how big your dick is. Game Science, the studio behind Black Myth: Wukong left Tencent to work on their own stuff. You can say all you want about Sony, but very few publishers give their devs almost free reign to what they develop. That and Sony being seen as this prolific publisher, offering the highest quality that people have ever experienced would want to make devs and companies join them. Many devs want to improve. Within Sony they can. It's no secret many studios share their tech and ideas with each other within Sony.
Isn't Sony acquiring the devs I mentioned and making them make great quality games not them doubling down what they are already doing? In contrary you just mentioned the idea of Sony putting their 1st party games on PC day 1 with a PC launcher. How is that even doubling down on what they are doing? They've never done that before. Plus this would not only make them compete with Microsoft, this will also make them compete with Epic Games. I imagine Sony would want to keep Epic Games as their ally and not their enemy. Making them your enemy might make you lose out on their Unreal Engine 5, which everyone is so impressed by. That would definitely hurt Sony in some areas. Sony just made an effort to strengthen their relationship with Epic Games, it makes no sense to create that relationship and then instantly destroying that. You would've been basically investing into that without reaping any rewards from that. That's just not a good business move.
Oh yeah, staying complacent and not doing anything when your competitor just acquired one of the biggest publishers ever and hoping for the best gives you control. Like how's that even logical lol. If Microsoft can buy Activision-Blizzard, they can buy any other publisher. Sony's stock dropped 20B in a day time. Not acquiring anything would put them on the spot where they will have less and less choice of the ones they wanna buy, it would only mean it's harder for them to hire any new talent. Not to mention they risk of getting their stock value drop more and more while the competition is getting stronger and stronger. Sony now just lost 20B with nothing gained. Better to spend that 20B and get something in return wouldn't you say?
I don't know why you gave that example, that was a different time with different circumstances. It's really not comparable by any means.
Your last paragraph just described what I said earlier. The acquisitions I mentioned are all devs who have a good relationship with Sony and aside from Capcom, they are all quite new. Some of them havent even put out a game yet. Also what I mentioned just means they are doing exactly what they are doing now, they would just be more aggressive about it and speed up the process they were going towards anyways. I never said they should change their approach, unlike you did. For example putting their 1st party titles on PC with a PC launcher. They've never ever done what you suggested. If they followed your approach THEN they'd be changing their ways of how they tackle things now.
you did it man
