"Today, PlayStation revealed that its PS5 has sold 40 million units. Microsoft doesn’t share hardware numbers typically, but court documents, math, and slides from an ID@Xbox in Brazil seem to suggest the Xbox Series X|S line-up is around 20-23 million units sold globally. That essentially puts the PS5 at a 2:1 advantage against Xbox, but perhaps the split is even worse than that beneath the surface. "
That is true, but maybe it’s all the more reason to wait and see what they can do with the whole publisher they already have before they buy another.
If I’ve got money to invest now, I’m going to invest in two things that are likely to make money rather than waiting to see if the first one makes money over a couple of years. Especially when ActiBlizz was on a fire sale.
I’m not saying Microsoft itself should have been the one to decide this.
Do you think the Bethesda acquisition by itself, before Activision, would have been enough to turn PlayStation’s 2:1 market lead into something far more even? Because I don’t. And I think that’s why the deal didn’t get blocked. There’s also tons and tons of third party competition in the gaming industry worldwide, so I don’t think they’re a threat to competition there either.
I believe this framing is misleading to begin with. Not only Microsoft as a whole is already a much larger company to Sony, so the whole idea that it deserves a boost to catch up is missing the forest for the trees. On top of that, it seems like a remnant of Console War mindset to consider the ideal of the market to be a 50/50 or a 33/33/33 split.
It is better for the industry to have more publishers and studios which are beholden to no platform owner. The idea that whoever is below the top 3 is entitled to swallow up everything under them so that they get a chance to reach #1 is a convoluted way to justify consolidation. It’s not fine just because Microsoft is #4 rather than #2. Being #4 is not such an insignificant position in first place, and it’s weird that it’s assumed that Microsoft is owed an even position.
And I’m sorry, if freaking Microsoft can’t use the many studios it already has to make their platform they have appealing, the issue is not lack of studios and IPs. I don’t think the “competitiveness” of taking games that already could be available to everyone and locking them to a platform is actually making the market any better (no, not even when Sony does it). It’s a net negative for everyone except the acquiring company itself. If they want to make their platform more appealing, they should make better games for it.
> > > Not only Microsoft as a whole is already a much larger company to Sony > >
With regards to this industry, it really doesn’t matter.
> > > On top of that, it seems like a remnant of Console War mindset to consider the ideal of the market to be a 50/50 or a 33/33/33 split. > >
That is the ideal. It means each one has to try their damnedest to earn the dollar of their consumer. Like you, I’d prefer that it was achieved by any means other than exclusives, but as long as it’s a legal business practice, it will be an effective one.
> > > It’s not fine just because Microsoft is #4 rather than #2. Being #4 is not such an insignificant position in first place, and it’s weird that it’s assumed that Microsoft is owed an even position. > >
They need to be successful enough that they don’t leave the console market entirely. Otherwise you create a monopoly in that space. There are some industries that are just colossally difficult for a new competitor to enter, and the console market is one of them. If you lose a competitor, it ruins the market for everyone.
> > > If they want to make their platform more appealing, they should make better games for it. > >
Yeah, they’ve got this game Starfield coming out, plus Hellblade II, Fable, Clockwork Revolution, South of Midnight, etc. But games just take so long to make that it takes forever to make up for a deficit they created last generation. It doesn’t make the market better for the customer, but it’s far worse if Sony’s lead is so immense that a console manufacturer doesn’t profit from making consoles. That is, unless the entire console market disappears, but I don’t think that’ll happen for several decades at the earliest.
> > > > > > > Not only Microsoft as a whole is already a much larger company to Sony > > > > > >
> > > With regards to this industry, it really doesn’t matter. > >
Yes it does matter. It still gives them advantages, from the wealth and influence their other endeavors amass as well as technology being directly related to gaming. These matters don’t exist in isolation.
This makes it harder for upcoming innovators to compete, when that is what they have to face (or be bought out by).
> > > > > > > On top of that, it seems like a remnant of Console War mindset to consider the ideal of the market to be a 50/50 or a 33/33/33 split. > > > > > >
> > > That is the ideal. It means each one has to try their damnedest to earn the dollar of their consumer. > >
It’s shortsighted to assume Sony, Microsoft and Nintendo is what this industry will ever be and it’s the most competitive we can expect it to be. In fact, letting them gobble up any other significant publisher is an obstacle towards more competition. Nevermind that even among those three, third-party developers create an incentive to make their platforms appealing beyond simply being the only place that has that game. Features and services.
> > > Yeah, they’ve got this game Starfield coming out, plus Hellblade II, Fable, Clockwork Revolution, South of Midnight, etc. But games just take so long to make that it takes forever to make up for a deficit they created last generation. > >
That is the business that they are in. Lets see how they are doing and how much they need more when these come out. Why should they acquire more if it isn’t even proven that they are handling the others well? If anything, those layoffs are not a good indication.
> > > It doesn’t make the market better for the customer, but it’s far worse if Sony’s lead is so immense that a console manufacturer doesn’t profit from making consoles. > >
Worse for who? Nintendo’s consoles are profitable and Microsoft can definitely afford to sell units at a loss so that they can sell games, which is the same that Sony does. And is it better for Sony and Nintendo customers if they lose access to third-party games because Microsoft gobbled them up? Sure it would be better for the customer if Microsoft made good games that made their consoles a more appealing option, but gating existing franchises isn’t helping them in any way.
I see a lot of these arguments are ultimately taking pity on Microsoft, for being behind, because it should do what is more profitable to it, but they don’t actually help the customer any. It’s funny to see this “poor little Microsoft, they have it so hard” when Nintendo is a smaller company with a weaker console under the same difficulties and they are doing better than them. Of course you don’t hear of big acquisions from Nintendo because they don’t have as much spare money as Microsoft does, which it can take from profits of other segments.
> > > Yes it does matter. It still gives them advantages > >
Which haven’t manifested in market share.
> > > This makes it harder for upcoming innovators to compete, when that is what they have to face (or be bought out by). > >
> > > It’s shortsighted to assume Sony, Microsoft and Nintendo is what this industry will ever be and it’s the most competitive we can expect it to be. > >
No, it’s the only thing one can reasonably expect short an absolutely unpredictable paradigm shift. The longer this market has existed, the more difficult it is for a competitor to get into because the stakes and production values have been raised so high. There’s a reason you don’t see companies lining up to get into the microprocessor business, and it’s because working with silicon requires an enormous capital investment. The only new players who emerged in this industry did so when mobile processors became that paradigm shift to shake things up. While these things are pretty much inherently unpredictable, the only one I can see happening is if consoles disappear entirely in favor of a more unified, open format akin to a PC, which means these three players are no longer in the industry for the reasons they are now.
> > > That is the business that they are in. Lets see how they are doing and how much they need more when these come out. Why should they acquire more if it isn’t even proven that they are handling the others well? > >
The fact that they didn’t become a runaway success immediately after acquiring all of those other companies, including Mojang and Bethesda, is why the merger was allowed to go through. If we’re talking about breaking up Microsoft, as a non-expert, I imagine the gaming arm of it stays in one piece.
> > > If anything, those layoffs are not a good indication. > >
Everyone in tech had layoffs. Not only is it common after a merger, it’s also common when credit becomes more expensive and the economy contracts.
> > > Worse for who? Nintendo’s consoles are profitable and Microsoft can definitely afford to sell units at a loss so that they can sell games, which is the same that Sony does. > >
It’s worse for the consumer if Sony doesn’t have a Microsoft to keep them in check. Now if you want a console that plays Grand Theft Auto VI, there’s one place to go (because you’re not playing that game on a Switch). The market is cornered. Microsoft can only sell consoles at a loss and stay in the market if their install base is large enough to make that money back later. No one knows what their break-even point is, but if they don’t sell enough consoles, they’re not getting enough game sales or Game Pass subscriptions to make that math make sense, and they have no incentive to continue producing consoles.
> > > I see a lot of these arguments are ultimately taking pity on Microsoft > >
Don’t mistake anything I’m saying as pity for Microsoft. They are where they are in the market because they tried to sell a horrible product back in 2013, for more money than their competitor did, and they divested themselves of a lot of studios that, long-term, could have dug them out of that hole in favor of some bad bets for where the market was headed. Also, I’m a Linux nerd. I could hardly be less interested in seeing Microsoft succeed. What I would hate more though is if Sony ran away with an entire sector of the market when they’re doing a lot of nasty anti-consumer stuff too, including trying to acquire exclusivity of a lot of the stuff Microsoft just bought.
Once again you talk about it like the are owed the #1 place rather than having to, you know, compete for it. Are you going to tell me that they didn’t get any market benefits from, say, experience with OS and the hardware architecture as well as the networking and cloud technologies that they use? It would make more sense to assume that if not for this they could be even further down, but you are not even counting it because they are not exactly on par with Sony. You gotta do better than to just dismiss this.
By the way, a paradigm shift is already happening. For a lot of people their phones are their primary computing and gaming platform, and while I’m not a fan of the practices in it, a significant change in the market is anything but unpredictable. The second largest gaming company is Tencent, a mobile-focused one. Mobile revenue has surpassed consoles.
But that says nothing of the consoles that we could have tomorrow. It used to be that SEGA was one of the biggest console manufacturers and Sony wasn’t even in the market.
> > > It’s worse for the consumer if Sony doesn’t have a Microsoft to keep them in check. > >
Sure, but what is the point here? The question here is whether Microsoft should acquire ActiBlizz. If it has enough capital for that, it’s not going bankrupt. It would be a false dichotomy to treat acquisition and leaving the gaming market as the only two options. After all, aren’t all the other companies they already acquired appealing enough? Or weren’t they worth it? And if they weren’t, why would this fix anything?
Even if Microsoft is not so interesting a platform right now, Sony cannot relax or they could catch up, like they did in the 360 era. The only thing lacking here are Microsoft’s own efforts.
> > > What I would hate more though is if Sony ran away with an entire sector of the market when they’re doing a lot of nasty anti-consumer stuff too, including trying to acquire exclusivity of a lot of the stuff Microsoft just bought. > >
Well if you are concerned that the top player resorts to anti-consumer tactics, you shouldn’t be defending that the playing field is “levelled” (only between two large players) through more anti-competitive and anti-consumer tactics. If you think it’s shady that Sony paid to have FF16 as an exclusive, why are you defending that Microsoft does that to Starfield? At least when it comes to Sony, Microsoft could have outbid Square for exclusivity
Which I want to make clear, it can do. Because it has a lot of money, enough to buy Activision Blizzard, the 6th largest game publisher. It could be funding new studios, it could be playing from Sony’s handbook, but they decided to one-up them instead by consolidating the market and taking away options from everyone else in a far more concrete way.
The ideal solution here, is that Microsoft’s acquisition should be blocked but Sony should also be punished for anti-consumer tactics.