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Jim Ryan, CEO of Sony Interactive Entertainment, believes that cloud gaming won’t start to become a major part of the gaming industry for at least a few years, and maybe not another decade.
He also said he didn’t think Microsoft’s decision to make Starfield an Xbox exclusive was uncompetitive (although ” [doesn’t] like this”), Activision’s current deal only keeps Call of Duty on PlayStation consoles until the end of 2025, and that it believes Microsoft will use the best-selling shooter series to “weaken the Playstation”.
Ryan’s comments on cloud gaming come from his pre-recorded testimony as part of this week’s hearing between the Federal Trade Commission and Microsoft.
The legal dispute is whether the FTC should grant Microsoft a hold for completing its acquisition of Activision Blizzard before its August hearing with the committee’s administrative judge.
On the subject of cloud gaming – which has become a sticking point in Microsoft’s proposed takeover, forcing the UK competition regulator to block the deal (pending an appeal from Microsoft and Activision) – Ryan said agreed when asked if it was difficult to build a robust cloud platform And explain how PlayStation sees this technology.
Cloud technology will become a significant part of how gamers access games between 2025 and 2035.
“We consider this to be a component of the PlayStation Plus service,” he said, adding that the current PlayStation Plus cloud gaming component “has been around since last year.”
When asked how long Sony had operated its cloud gaming service – the lawyer referring to the announcement of PlayStation Now in 2014 – Ryan said that PS Now predated the PS Plus renewal of the last year of “a few years”.
He said that before folding over to PS Plus, PS Now had a “three million subscriber base”, but added that this was not very much “in the context of our business”.
When asked how long it would take for cloud gaming to become a commercial success or a significant part of PlayStation’s business, Ryan said, “Obviously the answer to that question depends on how you define importance, but I would argue that cloud technology will become a significant part of how gamers access games between 2025 and 2035.”
He added, “We are making significant investments in the cloud in hopes that it will become a very useful way for gamers to access game content. »
As has happened throughout the process since Microsoft first offered to acquire Activision Blizzard, the possibility of Call of Duty becoming an Xbox exclusive was discussed at length throughout the session.
Ryan told the court that Xbox chief Phil Spencer’s initial proposal for a deal to keep Call of Duty and other Activision games on PlayStation did not adequately address his concerns because it focused on catalog games.
“We think it didn’t make sense,” he said. “In our view, this list represents a select group of legacy titles that will remain on PlayStation. For example, Overwatch is there but Overwatch 2 is not, which is the current version of the game.”
He said Activision Blizzard has a “very strong portfolio of games,” including Call of Duty, Overwatch 2, and Diablo, and commented on how unique Call of Duty is in the AAA space.
” The way in which [Activision has] They manage to organize themselves to release new games every year, and the games are different and unique. “There’s nothing like it in the industry,” he said.
He continued: “The closest analogy would be the annual releases of major sports franchises, but this is a very different situation as developers gradually build on the previous release. [of those games]. Activision sort of releases a new game every year, so it’s the same every year. »
Much of the session was spent in downplay when his concerns about Microsoft owning Activision first surfaced. When the deal was first announced, Ryan said, “He was hoping we could get a deal between PlayStation and Microsoft,” and he continued to believe that after Phil Spencer’s original written proposal.
This belief persisted until August 26, 2022, when an email from Spencer “really rings the alarm bells” – although the content of that email was not discussed, and Ryan argued that it was just a ‘significant factor’ in escalating his concerns.
Ryan reiterated Sony’s belief that Microsoft intends to use Call of Duty “to harm PlayStation in terms of the availability or the way the game is made available to PlayStation consoles and to direct PlayStation gamers to Xbox platforms – especially Game Pass”.
Asked about the result on PlayStation, he said: “The key feature in terms of appeal to people making games is the level of its installed base and the kind of fertility of its user base. The people who make games to monetize…if that’s a significant number of those [players] Going from PlayStation to Xbox… it would definitely hurt gamers.
“It is very important that the version of Call of Duty available for PlayStation games is equivalent to the version available for Xbox, whether in terms of release date or quality of play… and there are other vectors like that . »
He added that a portion of PlayStation gamers in the United States use their console solely or primarily to play Call of Duty, and that if Activision were to be acquired by Microsoft, “that group would be at risk.”
Ryan said even a partial lockdown of Call of Duty on PlayStation would be detrimental to Sony’s business as it would “result in a degraded experience for PlayStation gamers”.
“It is very important that the version of Call of Duty available for PlayStation games is equivalent to the version available for Xbox”
The SIE chief was also asked about comparisons to the ZeniMax acquisition, as he acknowledged that Microsoft had honored the original PlayStation exclusive deals implemented at Ghostwire: Tokyo and Deathloop.
He pointed out that while[doesn’t] I liked the Xbox exclusive of Redfall and Starfield, he said it was “essentially [has] There is no disagreement” with the first, and for the second he “does not consider it anti-competitive”.
Ryan was asked about interactions with Activision Blizzard CEO Bobby Kotick regarding a meeting with the European Commission on February 21, 2023. According to Ryan, the Activision President said “he would like to have some discussions on the negotiation of an agreement”.
“I told him I thought the deal was anti-competitive and I hope the regulators do their job and stop it,” he said.
However, he countered that this meant turning down a potential deal with Activision Blizzard.
“I think there’s a lot of confusion here. My comment was specifically in the context of Microsoft’s acquisition of Activision. I think what Bobby wanted to do was cover himself by expanding the marketing collaboration between Sony and Activision in case he didn’t follow through. . »
He later confirmed that Activision Blizzard’s current commitment to keep Call of Duty on PlayStation extends “until the end of 2024” and that he did not require Activision to put new versions of Call of Duty. of Duty on PlayStation Plus.
” [Because] Our PlayStation Plus model is for catalog games, and we knew Bobby was so outspoken in public that he didn’t see this as a path he wanted to eliminate from Activision Blizzard. »
Discussions also took place on the definition of key companies and their place in the market.
While acknowledging Microsoft is technically a publisher, Ryan insists it’s “essentially a platform operator” just like PlayStation.
“That’s why this deal is so difficult,” he added. “There’s quite a difference between Activision’s incentives and what Microsoft might get after its acquisition. »
Additionally, he touched on the case of Nintendo, which was considered part and separate of the console market at various times during these hearings.
“Nintendo sells consoles, so it’s in the games console market but it’s not our direct competitor. »
You can catch up on everything we learned from the FTC vs. Microsoft hearing in our informative roundup.
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