What you need to know
- A recent ransomware attack led to a tranche of documents leaking from PlayStation developer Insomniac, detailing upcoming projects.
- Included in the files, allegedly, were slides from an internal PlayStation presentation, revealing the firm's true thoughts about Xbox's acquisition of Activision-Blizzard.
- Although they date back to the early days of the acquisition, Sony fears that Microsoft could "leapfrog" the firm via careful positioning of Call of Duty and other Activision franchises.
- Update: It has been confirmed that the slides below are indeed genuine, taken from a PowerPoint presentation outlining Sony's strategic pillars.
Recently, PlayStation developer Insomniac was hit by a huge ransomware attack that has since seen various internal documents, videos, and other files leak onto the internet.
The leak is reminiscent of Microsoft's big court documents snafu from the summer, where Microsoft revealed embarrassing details about its internal thought processes, as well as a roadmap for a potential next Xbox. In this big document tranche from Insomniac, we've potentially gotten a glimpse into how PlayStation is feeling about Microsoft's big Activision acquisition.
In October 2023, Microsoft finalized its deal to acquire Activision Blizzard, giving it control over franchises like World of Warcraft and Call of Duty. Sony identifies the potential threats that it could face in a world where Microsoft owns Call of Duty, but it should be noted that some of these thoughts precede Microsoft's deal with PlayStation to maintain parity for Call of Duty for at least ten years.
Shared on platforms like Imgur, Sony allegedly goes into detail about how it views Microsoft's position moving forward. Described by Sony as "the leapfrog," the slide details how Microsoft is aiming to build a mobile gaming store to compete with Apple and Google, as per previous information. It also details how Microsoft could build a comprehensive ecosystem across mobile, PC, and console, referring to Xbox Game Pass as "GP" throughout. Sony details how its "pillars" are "dated," and behind Microsoft, referring to Microsoft's growing service game portfolio across titles like Sea of Thieves, Halo Infinite, and Minecraft. Sony also notes its need to "respond," although its service game efforts have hit snags recently, with Destiny's upcoming expansion delayed, and The Last of Us Online wholly cancelled.
Elsewhere in the documents, Sony details how difficult it's getting to actually get a return on investment for AAA games — an issue that is plaguing the entire industry right now. Sony expresses how a $500 million game might not break even in the first year, which is upending how publishers are thinking about platforms like PC and mobile as they seek profitability and less risky investments.
To that end, Sony's "strategic pillars" seem to detail an intent to eventually launch games more quickly, or even day one on Windows PCs, as part of its multi-platform pillar.
Even if these particular slides aren't real, the do detail the real-world reality PlayStation now finds itself in. (Update: The slides have been confirmed real, taken from a PowerPoint presentation detailing Sony's investment pillars for gaming.)
Sony is still the second biggest gaming company by revenue despite Microsoft's acquisition of Activision-Blizzard, owing to its near-total global dominance of the console hardware market. Xbox has notoriously struggled to attract the same kind of global attention for its Xbox Series X|S consoles, with many users happy to just stick with Xbox One, or switching instead to the PlayStation ecosystem.
In previous interviews, Xbox lead Phil Spencer lamented that the Xbox One generation caused Microsoft to "lose" the console war, as players became increasingly locked in by their digital libraries. The console landscape is partially what prompted Microsoft to acquire Activision-Blizzard, owing to the firm's strong position in mobile gaming across Diablo Immortal, Hearthstone, Call of Duty Mobile, and Candy Crush Saga. Microsoft also correctly predicted the end of mobile "walled garden" ecosystems, with Apple and Google gradually being forced by regulators to open up their storefronts to competitors. In that universe, Microsoft may decide to build its own mobile gaming store, offering more favourable terms to third-party developers on top of its own offerings.
Sony may have firmly identified that Microsoft is far better positioned to diversify in this evolving gaming landscape, even if its position in console gaming remains incredibly dominant. Sony's games command a level of quality and desirability that continues to elude Xbox, although Microsoft's slate of upcoming Xbox games looks incredibly strong for 2024 and beyond.
Microsoft's strong position isn't a silver bullet
Real slides or not, the industry is definitively shifting. While Microsoft has acquired a verifiable mountain of content and developers, they also face an incredible challenge to truly make use of all that creative capital. Call of Duty: Modern Warfare 3 reviewed incredibly poorly this year, potentially opening it up to modernized rivals like The Finals. Microsoft also stands to lose key veteran developers who may seek to retire following major share pay outs from Microsoft's various acquisitions. We've not seen a peep from games long in development like Everwild, State of Decay 3, or Contraband, and even Bethesda's much-hyped Starfield became the target of derision from certain corners of the press and the content creator sphere.
There's no guarantee that Microsoft's mobile game store will take off, either. Epic Games' store on Windows PC offers developers a very favorable rate, and yet, it hasn't made even the vaguest of dents in Steam. The same is true for PC Game Pass, which offers players hundreds of games for a low monthly fee. Will "Mobile Game Pass" fare any better against Apple's App Store or Google Play?
Either way, Microsoft Gaming is pulling more revenue than it ever has, and is expanding across every gaming pillar at an exponential rate. With Sony's strength in gaming IP, hardware prowess, and retail ubiquity — PlayStation is sure to remain a fierce competitor moving forward.
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Jez Corden a Managing Editor at Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by caffeine. Follow on Twitter @JezCorden and listen to his Xbox Two podcast, all about, you guessed it, Xbox!
Is the INSOMNIAC leak real?Reply
Magic 8 ball says: All signs point that way.
The terms used, pure corporate-speak, and the numbers cited lend it legitimacy.
However, Sony's problems have nothing to do with XBOX or the fanboys "consoe war". They are self inflicted from hanging on to a dated business model.
Point to consider: the console business has three components, hardware, software, and services.
Sony has the lead in *installed* hardware but that lead is only useful to the extent it drives software and service income. The term I remember from the 360 era is "attach rate", at which time it was reported the PS3 during its first two years had an attach rate of less than two and never matched the 360 despite eventually matching the total number of consoles sold. (The primary reasons given were the launch price of the original, gold plated design, and the embedded BluRay drive at a time there were no cheap BluRay players in Japan so the bulk of early PS3 sales were as video players rather than consoles.)
When INSOMNIAC talks of their "Pillars" being outdated they are referring to a lot of things that have nothing to do with competing with XBOX consoles and everything to do with the economics of semiconductors, the cost and limited revenue generation lifespan of the single player/single narrative games they have devoted themselves to (Remember the leaks from inhouse developers griping about being limited to supporting INSOMNIAC and the other big studios?) and, finally, their hardware uber alles strategy that kept them from doing PC ports until recently and still delays the ports for a year or more. They are stunting their exclusives' revenue potential to support their hardware sales. That is definitely dated.
When the INSOMNIAC leak angsts about $1.5B at risk they are worried that their most favored channel status for COD is worth that much dach year because, as exposed in the FTC court case, half of playstation owners only play COD. Biggest undereported revelation because if it is still true, it means the Playstation total game sales potential is about half of what would be expected from the size of their installed base.
COD isn't leaving Playstation but their "most favored channel" status is.
Counting on $1.5B a year from COD is also a dated strategy. That number is going down.
Finally, the high end semiconductor business is changing. It used to be that component prices could be reliably counted to drop year after year. That is no longer true. There is too much competition for the existing high end and midrange chip production. And with the AI explosion getting started it will only get worse. Note the price hikes on Playstation hardware.
Every time I hear the "leaks" and rumors of a PS5 pro with outrageous specs I tend to wonder, what price might it carry if it were real? And what volume will it move? "Better" console hardware isn't going to solve their software or services problem because it won't drive the attach rate high enough to justify the software costs. (That, BTW, is why XBOX SS exists and PS4 is still around.) I am skeptical hardware will solve Sony's near term issues.
They are too far behind the curve and addressing the problems with one of their pillars will hurt the other two. They need day and date to beef up services and PC software sales because AAA games are expensive and getting more so but day and date will reduce console attach rate.
Their hope out of the corner they painted themselves in was investingn in GAAS but that ship has apparently sailed. They are handcuffed to consoles and windowed exclusives. That limits their growth. Today they're still second in revenue...until march. Longer term, one of the three pillars will have to give.
It'll be interesting to see which way they go. (XBOX and NINTENDO figured out their priorities years ago.)
One thing Mr Spencer is right about: SONY is not XBOX's (long term) competition.
From the XBOX point of view, Playstation is a solved problem.
The next bump in the road is APPLE ARCADE.
That war is just ramping up for, say, '25.
I'm not super keen on MS (though more so that 10-20 years ago!) I still loath Sony with their utterly stupid walled garden (with barbed wire on top) approach to everything and everything having to be incompatible with rest of the world... Sony can burn in hell..Reply
You okay with PC?wojtek said:I'm not super keen on MS (though more so that 10-20 years ago!) I still loath Sony with their utterly stupid walled garden (with barbed wire on top) approach to everything and everything having to be incompatible with rest of the world... Sony can burn in hell..
That's likely the endgame dominant platform circa 2032 unless Apple stops being cheap and does some shopping.
There will still be XBOXes but they will be MS branded gaming PCs much like Surface. (Two gens away,methinks.)
First, Sony will have to go day and date on PC, though. They don't have the active inhouse IPs to go down Nintendo's road. They've really hurt themselves selling off EVERQUEST, ETC and deprecating their classic IPs.
fjtorres5591 said:You okay with PC?
Of course! Typing this on my mac and I have steam deck for more laisure gaming :D
fjtorres5591 said:That's likely the endgame dominant platform circa 2032 unless Apple stops being cheap and does some shopping.
Well, they already adopted TheMostStableGameApi... Win32 API via wine (apple gaming tooking), so there's that. So we have PC (win32), steam deck (linux with wine/proton) and macos (with wine/proton/AGT)
fjtorres5591 said:There will still be XBOXes but they will be MS branded gaming PCs much like Surface. (Two gens away,methinks.)
AFAIR Xbox is already to a large degree "a PC"?
fjtorres5591 said:First, Sony will have to go day and date on PC, though. They don't have the active inhouse IPs to go down Nintendo's road. They've really hurt themselves selling off EVERQUEST, ETC and deprecating their classic IPs.
Sony won't ever change... I still remember whole world adopted SD flash cards but no... SONY forced their prorpiatary card system... gamepads? AFAIR you can only use dedicated pades with PS... and vice versa. I have Xbox pad to play on mac/steamdeck and it works perfectly. I once tried to pair PS gamepad and at the end it didn't work...
I'm not so fond that xbox/ms is still being backwards about crossplay (like stony) and while I understand it it would be better to drop it... Guess monopoly does that to you ;-)