Where Does The Microsoft-Activision Deal Leave PlayStation?

The news that Xbox intends to acquire Activision Blizzard raises many questions. One of the biggest: what does this acquisition mean for PlayStation and its still-unannounced Game Pass competitor? Let’s talk about it.

Oh, to have been a fly on the wall at PlayStation last night. A moment of reckoning almost a decade in the making has arrived.

When Sony asserted itself and its dominant PlayStation 4 as the home of high quality, exclusive games, it set a cowed Xbox on a new path. Xbox stopped trying to compete on exclusives and focused on a new, third-party centric goal. If Sony staked its model on games you couldn’t play anywhere else, then Xbox would become the best place to play everything else.

As time has gone on, that strategy hasn’t changed much. Game Pass has proven popular, and a hungry beast. To position Game Pass as its entire platform moving forward, Xbox must now regularly shovel content into its video game furnace. The best way to do that is to ensure as many studios as possible are creating content expressly for Game Pass. And so, the battle comes full circle. Weirdly and unexpectedly, exclusivity has once again become the industry’s central battle.

It is exceedingly rare to see Sony caught behind the eight ball like this. When the Xbox Series X|S launched in the same window as Sony’s PlayStation 5, Sony seemed confident it had everything it needed to battle back its competitor for another generation. It seems to have miscalculated how far Xbox was willing to go. Sony has made it clear that it intends to get a Game Pass inspired platform off the ground, but nothing has emerged yet. Every month it spends building that service is a month Xbox can spend courting more talent.

Sony can’t really afford to delay its Game Pass competitor much longer. The thing about having a Game Pass style subscription service is you need content to put on it. This is why Xbox is on a shopping spree. Between Bethesda and ABK, Xbox has now locked up two of the largest third-party publishers in the industry. Only three other AAA publishers — Electronic Arts, Ubisoft, and Take-Two Interactive — now remain. All three have content deals with Game Pass. Take-Two cycles 2K and Rockstar titles on and off the service regularly. Ubisoft will launch Rainbow Six Extraction on Game Pass this week, but its Ubisoft+ platform remains separate. EA has walked up to the acquisition line but has not dared cross it. Its full EA Play library is now bundled into the Game Pass Ultimate subscription.

And so, Sony’s third-party options grow thinner. It could always license titles from Xbox studios for its platform, but that allows Xbox to hold all the cards on content. That’s ground Sony is not used to ceding. Knowing that, could PlayStation make a move on one of the remaining AAA publishers? Possibly. What if Xbox cuts a deal and gets Cloud Gaming up and running on the Nintendo Switch? PlayStation will look worse for wanting to protect itself because the optics will suggest it doesn’t want to partner up.

It has all the drama of one of Shakespeare’s histories. An old foe it had considered insignificant has staged a carefully plotted coup. And it’s working.

So what can PlayStation do? My expectation is they’ll try to match it.

If I had to pick one of three companies above most likely to cop an offer from PlayStation, my money would be on Take-Two. It would be a costly venture, perhaps pricier than the A$100 Billion Microsoft paid for ABK. Such a deal would make Rockstar and its invulnerable Grand Theft Auto IP a PlayStation exclusive, and that would have to be an attractive prospect.

The other alternative is that Sony pushes harder into indie territory, making its platform a curated library of smaller titles by smaller studios and publishers. Given Sony’s uneven history with indies, this seems unlikely but it is a move it could make.

Regardless of the move it makes, another question arises: what then? What can PlayStation do now to make any approximation of Game Pass stick? The answer is to buy and buy big.

To be clear, this all sucks. This kind of consolidation is not only bad for the games industry, it’s bad in any part of the entertainment world. It does little for creativity, and it drives huge piles of money into fewer and fewer hands. Is Xbox Game Pass a ripper deal at a purely retail level? Absolutely. But will we still be saying that in four years when the buying spree is complete and these megastudios are shuffling around inside a single ecosystem, trying to stay out of each other’s way so as not to step on Microsoft’s bottom line? Time’s gonna tell on this one.

For more, Kotaku US’ Luke Plunkett wrote a great piece on why all this is awful and will only continue. I recommend you read it.

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