In a candid discussion about the gaming industry, Sony’s President, Jim Ryan, shared some intriguing insights into the world of Xbox Game Pass and the recent mega-acquisition of Activision by Microsoft.
When questioned about Microsoft’s potential need to provide minimum revenue guarantees to publishers to secure titles for Xbox Game Pass, or if they’d opt for more massive acquisitions like Activision, Ryan didn’t hold back. He suggested that Microsoft had indeed attempted minimum revenue guarantees with publishers, and it had not yielded the desired results. This, according to Ryan, had driven Microsoft towards making monumental acquisitions.
Ryan claims to have engaged in conversations with all major publishers regarding Xbox Game Pass. Surprisingly, he revealed that publishers unanimously expressed disapproval of the service, citing it as “value-destructive.” This sentiment applies not only on a per-title basis but also extends to the industry as a whole. Ryan referenced Microsoft’s announcement of 25 million Xbox Game Pass subscribers in January 2023, expressing his personal expectation of a higher number, considering the substantial investments Microsoft poured into the service. Additionally, he highlighted that PlayStation’s PS Plus boasts nearly 50 million subscribers, suggesting that Sony’s subscription offering holds more significance compared to Xbox Game Pass.
Speaking on Sony’s potential interest in acquiring Activision, Ryan drew a stark contrast between Microsoft’s staggering $69 billion acquisition of Activision and Sony’s more modest $3.6 billion purchase of Bungie. He emphasized that Bungie’s potential contributions to PlayStation could far exceed the value of the Activision deal, even before considering the relative transaction costs.
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As the gaming industry continues to evolve, these insights from Sony’s Jim Ryan offer a unique perspective on the strategies and challenges faced by major players like Sony and Microsoft.
