How Can Sony Ensure PlayStation Stays Ahead of Xbox After Microsoft’s $68.7 Billion Success?

With the Microsoft-Activision Blizzard deal officially completed, Xbox has $68.7 billion reasons to celebrate. The acquisition faced many challenges but was able to overcome them all. Now Xbox is the proud owner of some of the best game series in the world, such as Call of Duty, Diablo, Overwatch, and many more. However, this deal also instills fear in their biggest competitor, PlayStation.

PlayStation was an active part of FTC vs. Microsoft. This goes to show both gaming giants had a lot at stake over this deal. Further, with the deal now complete, PlayStation will be looking to take some drastic steps too. PlayStation, the leader in the gaming industry for now, has two problems at hand – The growing stake of Xbox after the deal and the impending departure of their CEO.

Xbox vs. PlayStation: pre-merger and post-merger scenarios

The acquisition of Activision Blizzard paints a very different picture of Xbox in relation to PlayStation. In 2022, the revenue of Xbox lagged behind PlayStation with a hefty margin of $8,847 million. But after the acquisition, Microsoft’s subsidiary has received a boost of $6,775 million from Activision, Blizzard, and King. This has placed them close to PlayStation.

Adding to the pile of problems, SIE’s CEO Jim Ryan is officially leaving the company next year. Ryan was one of the forerunners of converting PlayStation into a Game as a Service company. His departure amidst growing troubles for PlayStation can be a warning call for the Sony subsidiary. And the company is in deep waters if you just look at the release timeline of 2023 alone.

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PlayStation is only releasing one AAA title from their end, Spider-Man 2. Apart from this, they only released Horizon Forbidden West: Burning Shores DLC this year. But on the other hand, Xbox had a stellar year with Starfield and Forza Motorsport this year. Furthermore, they are expecting Elder Scrolls VI and Fable to soon arrive exclusively on their platform.

While Phil Spencer has promised Call of Duty will not become exclusive to their platform, he did not promise this about other Activision Blizzard titles. If in the near future, Xbox carries out an exclusivity play, it will lead to heavy damage to PlayStation. But there are some steps that PlayStation can take to stay there. PlayStation is currently battling to keep its top spot from Xbox. But they can extend their lead back again if they get some help from their parent company, Sony.

What steps can Sony take to ensure they remain on top of the gaming industry?

Sony has been a dominant name in the film, TV, and music industry. They can leverage this fact to take a lead over Xbox. According to industry insider Karol Severin, “While Xbox’s future is a cross-platform ecosystem, Sony’s operations in film, TV, music, and games mean it could create a cross-entertainment proposition.”

This cross-entertainment move has probably already begun from Sony’s end. To create more buzz about their PS5-exclusive title Marvel’s Spider-Man 2, they brought the Insomniac Spider-Man into their blockbuster hit animated movie Spider-Man: Across the Spider-Verse. Further, we have already seen PlayStation collaborate with media personalities to strengthen its brand in the entertainment industry.

Ensuring their presence in the entertainment industry with the help of their parent company Sony can be the main play for PlayStation. However, they can also actively look into other studios to acquire. But going the acquisition route will not be a beneficial one for PlayStation. While it did work for Xbox on paper, its acquisitions, namely, Bethesda and Activision, still act as independent entities under the Microsoft label. On the other hand, PlayStation’s acquisitions become more in line with the company, as seen with Guerrilla Games and Bungie.

Will acquisitions be the solution to PlayStation’s dilemma?

If PlayStation still decides to go with the acquisition route, companies like Capcom, Square Enix, and FromSoftware can be looked towards. And Square Enix might be the best option for PlayStation right now. Square Enix’s stock has taken a hit of 33% since May 2023, landing its value at around $4 billion. If the company decides to sell for 5+ billion, it will still be a profitable acquisition for Sony. The success of Final Fantasy XIV on PlayStation can act as a catalyst for this deal.

However, Sony has shown no signs of acquiring a gaming company for now. But one thing is for certain – they will be taking immediate steps to consolidate their top position in the gaming industry over Xbox. What steps they will be taking will become clear in the coming months. The battle between the two gaming giants, Xbox and PlayStation, will be the one to watch in the coming year.

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