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PlayStation's spending spree is radically different to Xbox's

3liteDragon

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The company's recent spate of acquisitions is in-keeping with what it's always done.
PlayStation's recent acquisitions may look like a reaction to Xbox, and in some ways it is. Sony has a number of close independent partners across the industry, and with leading games companies running around buying up all they can see (and not just Microsoft, but Tencent, Embracer, Zynga, EA...), it's important for Sony to protect its interests and ensure that its key partners stay around. But Sony's acquisition strategy is more considered than a lot of the mergers and acquisitions (M&As) happening in games today, and certainly in marked contrast to what Xbox is doing.

Microsoft's acquisition strategy is almost frenzied in its approach to buying the best talent available. Bethesda was the big headline purchase, and one that sent shockwaves through the industry. It has added significant strength to Xbox's first-party output and is a major boost for the Game Pass subscription service.

It has never been the company's style to go out and drop billions on a Bethesda.
Yet it was also an acquisition that didn't fit with what Phil Spencer and Matt Booty had been talking about in interviews. They were looking for studios that could add new types of games and appeal to different audiences. We had talked about family games, Japanese games, games for Asian markets... what they didn't need were more RPGs and shooters, but that's exactly what they bought. That's not to dismiss the value Bethesda brings to Microsoft. If you like shooters and RPGs, then Xbox is really the home for that stuff now, more than ever before. It's a deal that adds significant depth to Xbox, but not breadth.

By contrast, Sony's recent acquisitions are more strategic and far less dramatic. Housemarque is a long-term partner that took a real step up quality-wise with Returnal. Sony has played an active role in developing that studio, and it is the inevitable culmination of that relationship. Nixxes is another strategic acquisition. PlayStation has seen big success on PC by porting some of its legacy titles. It's seen its brands reach new heights already on PS4, and PC is making those IP even more significant. Buying a specialist in PC games allows Sony to deepen its exploration of that market without impacting its existing first-party teams.

Then there's Bluepoint. The studio wasn't bought by Sony last week, despite a tweet from PlayStation Japan that seemed to announce it. However, if it did (or does) happen, it would represent another considered move from the company. Bluepoint is also a long-term partner, but specifically it is the master of remasters. PlayStation has long leaned on legacy games to fill gaps in the release slate to strong effect. Demon's Souls was the best received game at the launch of PS5, whereas the PS4 remaster of The Last of Us remains one of the console's most successful early titles. So it makes sense to bring in a team famed for such work.

Housemarque is typical of how PlayStation acquires companies. They go on a few dates, which can evolve into a relationship and then, if all goes well, they get married. Already this year PlayStation has announced it's dating three new companies in Haven Studios, Firewalk Studios and Deviation Games. These are completely new AAA developers that nobody had heard of before they'd partnered with Sony, but the talent behind them have created games like Assassin's Creed, Destiny and Call of Duty.

Sony has invested in Haven (Jade Raymond's new studio) and is publishing the first games from the other two. All three will have access to PlayStation's internal resources and will be supported by PlayStation Studios boss Hermen Hulst. Like any date, things won't necessarily work out or run smoothly. But if they do, then we should anticipate these things to blossom in the way things did between Sony and Naughty Dog, and Guerrilla, and Media Molecule, and Sucker Punch, and (eventually) Insomniac.

That's not to say PlayStation won't invest in companies that can plug gaps in their skills and knowledge base. It's made acquisitions like that frequently. Nixxes has added PC development expertise to the business, Gaikai taught PlayStation about game streaming, whereas the recent acquisition of EVO gives the firm a foothold in esports. Ultimately, this is how Sony has historically bought games companies. It's either the inevitable result of a successful partnership, or a strategic move that allows it to explore another area of the business. It has never been the company's style to go out and drop billions on a Bethesda or to rush out and buy anyone who may be for sale.

In a year where M&As are dominating the GamesIndustry.biz newsletter, we should expect Sony to keep spending money. Just don't expect it to get drawn into the sort-of frenetic activity that we are seeing from some of the other video game giants.
 

Zones

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Are you seriously trying to convince me that buying Nixxes which owns zero original IP for maybe $5 million is not exactly the same as the $7.5 billion acquisition of one of the major gaming publishers?

Get outta here with that fanboy BS!
 

Methos#1975

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The real question is, if Sony had the resources at its disposal that MS had, would it still be following its present strategy or would it mirror that of Microsoft? History points to it prehaps being more along the lines of Microsoft, there was a time when Sony was also quick to snap up studios as well. Sony's strategy is let's be real, a matter of reality versus what it prehaps would like to do.
 
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reksveks

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Still waiting on Switch Pro, Playstation's summer show and its not even a Wednesday yet for MS to buy SEGA
There is a world where Nintendo deliberately announces the Switch Pro just after Sony announce a MGS remake by a new Sony Studio Bluepoint in their summer show. I would love to see Nintendo be 'ruthless' as an observer of the industry.
 

mejin

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The real question is, if Sony had the resources at its disposal that MS had, would it still be following its present strategy or would it mirror that of Microsoft? History points to it prehaps being more along the lines of Microsoft, there was a time when Sony was also quick to snap up studios as well. Sony's strategy is let's be real, a matter of reality versus what it prehaps would like to do.
MS strategy is a culmination of 20 years of failures.

Sony is coming to its 5th gen after being market leader in 3 generations.
 

Captain Toad

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Are you seriously trying to convince me that buying Nixxes which owns zero original IP for maybe $5 million is not exactly the same as the $7.5 billion acquisition of one of the major gaming publishers?

Get outta here with that fanboy BS!
I don't think Nixxes is really being included here, as that's more of a special case that isn't a studio to actually make games, just handling ports.

I assume this revolves around Insomniac, Housemarque and likely Bluepoint. Those are three studios that Sony has been building relationships with for quite a while and then eventually got moved in-house.

I can't really think of many more that would fall into this category going forward, unless Sega were to sell off Atlus or something.
 

Lanrutcon

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Lord,

As your humble servant I ask: how long must the front page suffer for the purchase of Bethesda? How many Playstation threads must we endure to placate the weeping masses? Surely you did not put this generation in place, only for us to suffer under the yoke of 10 damage control threads per week? I understand your plan is beyond us, but send us a sign that this dark time will end.

Amen.
 

Methos#1975

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MS strategy is a culmination of 20 years of failures.

Sony is coming to its 5th gen after being market leader in 3 generations.
And so? It's inarguable that Sony's strategy is just as much dictated by reality and the fact that it doesn't have the means to enter into a money war with MS as it is anything else. Does anyone here honestly believe Sony wouldn't be going after bigger studios and exclusives if they could? I certainly don't. I mean why wouldn't they?
 

OmegaSupreme

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And so? It's inarguable that Sony's strategy is just as much dictated by reality and the fact that it doesn't have the means to enter into a money war with MS as it is anything else. Does anyone here honestly believe Sony wouldn't be going after bigger studios and exclusives if they could? I certainly don't. I mean why wouldn't they?
Why would they? Why spend money when you don't have to? MS has to. They have no choice if they want to stay in the game.
 

Methos#1975

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Sony's strategy in acquisitions is just matter of financial capabilities. It they could, they would try to buy Bethesda in a whim. But they can't overpay Microsoft and that's just a fact.
Exactly.
Why would they? Why spend money when you don't have to? MS has to. They have no choice if they want to stay in

Because shoring up deficiencies is always a good thing and even Sony has such deficiencies. Take WRPGs for example. There is a pretty reasonable fanbase for such games and now MS for better or worse owns the high ground when it comes to that genre and that fact is going to sway a segment of gamers to the Xbox platform. If I was Sony I wouod absolutely be interested in shifting some of that momentum by purchasing Larian studios or buying exclusive rights to Balders Gate 3 on console.


There is also the long game, purchasing such studios now prevents MS or God forbid, Amazon, Google, etc from purchasing them in the future which is a danger that is becoming increasingly more possible.
 
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mejin

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I don't think Nixxes is really being included here, as that's more of a special case that isn't a studio to actually make games, just handling ports.

I assume this revolves around Insomniac, Housemarque and likely Bluepoint. Those are three studios that Sony has been building relationships with for quite a while and then eventually got moved in-house.

I can't really think of many more that would fall into this category going forward, unless Sega were to sell off Atlus or something.

It should be included. Nixxes is going to join PlayStation Studios Technology, Creative & Services Group, which focuses on technical and development capabilities to support Sony's games development studios.

To make impressive games is not just about money.
 

GHG

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Sony's strategy in acquisitions is just matter of financial capabilities. It they could, they would try to buy Bethesda in a whim. But they can't overpay Microsoft and that's just a fact.

They have enough cash on hand to make that kind of acquisition but it's a question of whether or not they need to.

Xbox's first party problems are well documented, an acquisition of bethesda/zenimax's size was not only required to try and remedy their first party situation but also from a long term strategic standpoint for gamepass.

The ideology that it's all about cash is a misguided one. If that were the case then why haven't the likes of Amazon and Google gone and bought a bunch of major publishers? Why did it take Microsoft so long to make an acquisition the size of Zenimax/Bethesda? It's not as simple as throwing money around. Once you acquire the company and it's assets they are your responsibility and burden.

You need a clear strategy on how to integrate that business and how to allow them to create a sustainable ROI without needing to spend more money and time in order to get them aligned with your existing business. If that fails then the acquisition is not only a waste of the billions you spent initially, it ends up being akin to paying child support for a child you never even wanted.
 

ZehDon

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The article missed the forest for the trees.

PlayStation's "spending spree" of two whole acquisitions is formalising its long-standing partnerships as first party endeavours. While this allows Sony to invest deeply into proven talent they know will be at home in the PlayStation family, it doesn't change anything - and just adds yet another studio making yet more third person action adventure games, which is what the vast, vast majority of Sony studios already make. They're quality titles, no doubt, but if you're looking for literally anything else, Sony simply doesn't have an offering. If Microsoft's Zenimax purchase was apparently lacking breadth, Sony's purchases are borderline myopic.

Microsoft's purchase of Zenimax is something Sony wishes it could afford - Sony was apparently after a timed exclusivity deal for Starfield - but the result is a pretty massive change in Xbox's first party long term growth and support systems. If all you see is generic "RPG" and "FPS" then you're simply not paying attention. In Arkane, they've scored the best immersive sim studio on the planet. In Id, they've secured the legendary technological expertise of one of gaming's most storied developers. In Bethesda Games Studios, they've secured a company whose titles sell with borderline Nintendo legs. In Zenimax Online, they secured one of the few studios who made a fantasy MMORPG that has truly thrived. In Machine Games, they scored a developer who's proven they can achieve the impossible: resurrect an outdated IP long thought dead. These acquisitions should - in theory - allow Xbox as a whole to lean into and learn from this talent to push what its first parties can do over the next generation. Its not about owning "DOOM" - it's about bringing the minds that created it and kept it relevant for thirty years to bolster the entire Xbox brand.

Sony bought a PC porting company and made a second-party developer first party. Cool. Literally nothing changes. Xbox bought a deep bench of talent that should help its entire first party to deliver better quality exclusive games. Time will tell if they can actually pull it off - its been well over a generation since Xbox was really able to deliver truly industry-leading exclusives.
 

Methos#1975

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The best take I take from here is that since Sony would buy big publishers if they could, that makes it ok for MS to do it. :pie_roffles:
No one has said that, but the reality is that they are so at some point Sony might have to follow suit. Gaming is becoming much like the film industry now with all the big studios merging together. And that isn't a good thing at all, but it's where we are at unfortunately
 
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FranXico

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No one has said that, but the reality is that they are so at some point Sony might have to follow suit. Gaming is becoming much like the film industry now with all the big studios merging together. And that isn't a good thing at all, but it's where we are at unfortunately
That point of view I definitely relate to. Nobody in their right mind would assign virtue to a corporation, and expect the those with the most power to behave ethically. The only thing we can count on to keep them in check is circumstances.
 

FranXico

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If Sony could afford zenimax the way MS can they would have tried to buy them too. Anyone saying anything different is clueless. Sony just don't have the money that MS do.
Indeed, and nobody said differently.

What would be best for consumers, though?
That both had that kind of money, or that neither had that kind of money?
 
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MrFunSocks

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I say different. I also laugh my ass off anytime one of you say "MS has all money" Sony can't compete!" MS's money doesn't come from Xbox. It never has.
Who said MS's money comes from Xbox? I certainly didn't. Xbox's money, however, comes from MS - MS who are worth $2 trillion dollars. What's Sony worth? Nadella has basically given Spencer the cheque book, and has made it one of the key pillars of Microsoft now.

Could sony have bought Zenimax for $7.5bil? Because MS did.
 
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FranXico

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Who said MS's money comes from Xbox? I certainly didn't. Xbox's money, however, comes from MS - MS who are worth $2 trillion dollars. What's Sony worth? Nadella has basically given Spencer the cheque book, and has made it one of the key pillars of Microsoft now.

Could sony have bought Zenimax for $7.5bil? Because MS did.
Oh wow LOL.

My dad can buy your dad!
 

Shmunter

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If Sony could afford zenimax the way MS can they would have tried to buy them too. Anyone saying anything different is clueless. Sony just don't have the money that MS do.
Zenimax has got the IP, but im not convinced Sony could tolerate the inherent level of jank and lack of polish. Things would require significant overhaul and much further investment.
 
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SpokkX

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The real question is, if Sony had the resources at its disposal that MS had, would it still be following its present strategy or would it mirror that of Microsoft? History points to it prehaps being more along the lines of Microsoft, there was a time when Sony was also quick to snap up studios as well. Sony's strategy is let's be real, a matter of reality versus what it prehaps would like to do.
Yeah
There is no alternative for Sony really

They simply cannot afford a big publisher so their strategy is really the ONLY viable one

not really news
 
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yurinka

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The real question is, if Sony had the resources at its disposal that MS had, would it still be following its present strategy or would it mirror that of Microsoft? History points to it prehaps being more along the lines of Microsoft, there was a time when Sony was also quick to snap up studios as well. Sony's strategy is let's be real, a matter of reality versus what it prehaps would like to do.
Sony has the resources to buy a Bethesda sized company. In fact, in recent times spent a more or less similar amount of money but to grow their internal studios, to buy Housemarque and several other strategical acquisitions: this guys to port stuff to PC, some hardware companies for VR related camera tracking, eSports stuff like EVO for fighting games, anime stuff, increased their spent on 2nd party and 3rd party exclusives.

Sony's exclusive games already dominate the GOTY awards lists, sell better than ever and way more than the MS ones, which are way less. Sony's overal gaming strategy is way more successful if we look at their revenue and profit. So MS needed to grow and improve their amount of quality 1st party studios, it made sense for them to purchase companies like Zenimax and so on. Sony instead prefers to reinvest their money in smaller quantities here and there: growing their already existing internal studios to face a next gen that as always requires more workforce than the previous one, expanding to PC, eSports or mobile, next gen VR stuff and to partner with strategic existing and new 2nd party and 3rd party teams.

And 20 year later, Sony continues as the market leader and MS continues as a distant 3rd, so MS resources don't mean a shit.

Nintendo says hi.
Sony gaming division makes way more money than the Nintendo one because Sony sells way more games for their consoles and their consoles sell more because -in addition to other reasons- they stay in the market getting games for a longer period of time.
 
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vaibhavpisal

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Sony has the resources to buy a Bethesda sized company.

Sony has the resources, sure.

But it's shareholders would expect massive return for such an investment.

For Microsoft, they even kept Bethesda purchase separate from Xbox so it doesn't weigh down xbox books, making it loss making division.

Microsoft has purchased bigger companies than this, and shuttered them down for good for various reasons without even blinking.

They don't even care if xbox makes 7.5 billion back. It's future is safe regardless.

This is something Sony can never do. So they will never make the purchase. It's too big a risk for them.
 

Dr Bass

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The real question is, if Sony had the resources at its disposal that MS had, would it still be following its present strategy or would it mirror that of Microsoft? History points to it prehaps being more along the lines of Microsoft, there was a time when Sony was also quick to snap up studios as well. Sony's strategy is let's be real, a matter of reality versus what it prehaps would like to do.
Sony makes a good profit with its games department.

I don’t think spending 7.5 bil on an older publishing company that was pulling 400 million in revenue or so at the time fits that model.

So no, I don’t think Sony would be making similar decisions at all.
 

yurinka

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Sony has the resources, sure.

But it's shareholders would expect massive return for such an investment.

For Microsoft, they even kept Bethesda purchase separate from Xbox so it doesn't weigh down xbox books, making it loss making division.

Microsoft has purchased bigger companies than this, and shuttered them down for good for various reasons without even blinking.

They don't even care if xbox makes 7.5 billion back. It's future is safe regardless.

This is something Sony can never do. So they will never make the purchase. It's too big a risk for them.
Xbox hasn't been a success for MS in 20 years, and there have been periods where stakeholders asked to shut it up. In recent years Xbox spent over $10B on acquisitions and on top of that their Gamepass strategy is a money sink, decisions that are bold and a bit crazy in business terms, so they better do a good job justifying these investments soonish with other than MAUs, showing that the money is coming back.

PlayStation instead (excluding the PS3 generation where Sony fucked it up and all 3 ended pretty close) has been always a market leader, so successful that now it's the most important part of Sony. Which means their stakeholders must be confident with PS and if their gaming division thinks they need some important investment they'll allow them to do it. In fact, PS can afford these investments themselves with the revenue they generate.

Sony doesn't make giant gaming acquisitions because they don't need them. They prefer to invest smaller quantities on stuff that strategically is more important for them: to don't lose certain long time, successful partner. To grown their internal, super successful teams. To invest on stuff that will allow them grow like PC ports, eSports, VR, streaming, plus cool 2nd party and 3rd party stuff, plus Asian specific stuff to grow there (anime, JRPG exclusives, fighting game exclusives etc), bringing top gaming IPs to movie and cinema (Uncharted, TLOU, MGS...) etc.

I think their next acquisition may be Arc System Works and Bluepoint.
 
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