"MICROSOFT VS SONY"
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Description
Investors fear Microsoft's announced acquisition of Activision will bring more competition to Sony's PlayStation division and take away key games from the Japanese giant's platform. Key Activision games like Call of Duty could help power Microsoft's Xbox Game Pass subscription service. One analyst said the market "overreacted" with the 12% stock drop and that Sony will continue to pump out "blockbuster" games due to its investments in gaming studios. investors likely fear rising competition to Sony's PlayStation division as well as the potential for Microsoft to pull some popular games from the Japanese entertainment giant's platforms. For some time, Sony has been ahead of Microsoft with its portfolio of first-party games, allowing it to stay ahead in the console wars. But should Microsoft close the acquisition of Activision, it will have a strong portfolio of hit games from the Call of Duty franchise to World of Warcraft. That content can help power Microsoft's subscription strategy around Game Pass, a pay-monthly service that allows users to access a library of games across different devices. It is a rival to Sony's "PlayStation Plus" and "PlayStation Now" services. When console makers own the gaming studio, they often make those games exclusive to their platforms. Games like Call of Duty are currently available on both PlayStation and Xbox. But investors fear Microsoft could take those games off of PlayStation's platforms, giving the U.S. company more attractive content to rival Sony. "There is no doubt that this deal weakens Sony position in the market," Piers Harding-Rolls, games research director at Ampere Analysis, said in a note published Wednesday. "Whether or not Activision Blizzard's content is progressively made exclusive to Xbox platforms and services, inclusion of new releases into Xbox Game Pass for several major games franchises, including Call of Duty, will undermine Sony's third-party business. Sony has benefitted from the ability to negotiate timed exclusive content for Call of Duty but this is now under threat." --- Support this podcast: https://anchor.fm/masseffect/support
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