Microsoft wants to define the metaverse: Tech analyst
Sony Group Corp. shares fell as much as 9.6 per cent, their biggest intraday drop since March 2020, after PlayStation rival Microsoft Corp. announced a US$69 billion deal to acquire games publisher Activision Blizzard Inc.
The sizable acquisition escalates Microsoft’s spending spree to secure intellectual property assets for its Xbox Game Pass service, which has been adding paying subscribers by offering them a growing portfolio of games to play. This challenges Sony’s traditional console business model that combines high-profile exclusive titles with hardware sales to earn revenue. Games and network services account for about 30 per cent of Sony revenue.
Microsoft announced Tuesday that it has more than 25 million Game Pass subscribers and “will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass,” spanning both existing and new titles, according to Xbox chief Phil Spencer. Call of Duty, Diablo and World of Warcraft are among several highly successful franchises developed under the Activision Blizzard umbrella.
“Sony will have a monumental challenge on its hands to stand on its own in this war of attrition,” said Amir Anvarzadeh of Asymmetric Advisors. “With Call of Duty now most likely to be added exclusively to the Game Pass roster, the headwinds for Sony are only going to get tougher.”
Sony has maintained a strong lead in sales and exclusive IP over Microsoft’s competing offerings across several PlayStation and Xbox generations. Now that its Redmond, Washington-based rival has signaled its determination to spend freely to close that gap, Sony will be under pressure to respond.