Jim Ryan: 'Our Business Would Never Recover' If Microsoft Degraded Call of Duty on PlayStation - News
by William D'Angelo , posted on 06 April 2023 / 15,392 Views
Sony Interactive Entertainment President and CEO Jim Ryan in the company's response to the UK regulator, the Competition and Markets Authority (CMA), Addendum stated PlayStation "would never recover" if Microsoft were to release a degraded version of Call of Duty on PlayStation if its acquisition of Activision Blizzard were to be approved.
Ryan said a degraded version of Call of Duty on PlayStation would "seriously damage our reputation. Our gamers would desert our platform in droves and network effects would exacerbate the problem. Our business would never recover."
Sony says the Addendum from the CMA ignored this testimony from Ryan and assumed that even a degraded version of the series on PlayStation would not cause gamers to switch from PlayStation to Xbox.
"The Addendum appears to ignore this testimony, together with other evidence showing the sensitivity of gamers, and assumes that, even though Call of Duty is acknowledged to be important for console competition, it could be degraded without causing gamers to switch," reads the response from Sony Interactive Entertainment. "This speculation is unsubstantiated, inconsistent with the facts, and cannot rationally support a decision to find that no SLC will arise in consoles."
Sony concluded that the "Addendum does not justify the CMA’s U-turn on the consoles theory of harm. The revised LTV model is vitiated by errors that bias the model to finding no incentive to Microsoft to foreclose. The Addendum jettisons, without sound reason, the PFs’ thorough analysis of other evidence establishing Microsoft’s incentives. And the Addendum’s partial foreclosure discussion is based on pure speculation, rather than evidence. To reach a robust decision, the CMA should revisit its analysis of Microsoft’s incentives and partial foreclosure, correcting for the errors identified in this paper."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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lol that's a pretty bad admission when you say not even losing a single series but just having degraded versions of a single series would kill the Playstation brand. Playstation CEO basically just admitted Playstation is the weakest brand in gaming. Nintendo pretty much ONLY gets degraded versions of AAA third party games these days (though actually mostly they don't even get the games at all) and they are flourishing...and Playstation CEO is saying his brand would collapse if that happened to a single series lol
GTA would be the game changer
I think he is exaggerating delibrately in order to prevent Microsoft from acquiring blizzard
I agree with you. But I don't understand why they keep taking public relations "L"s like this, when there's no way to prevent Microsoft from acquiring ABK, if Microsoft is determined to do it.
It's almost certain the courts will approve this acquisition, as they almost always allow horizontal mergers to go through (and this merger is largely horizontal). So Microsoft's choices are to make concessions with regulators so that it can go through more quickly, or to refuse to make concessions and it will take longer to go through.
Jim Ryan trying to stop this acquisition from going through makes as much sense as him trying to stop the sun from rising tomorrow. So making yourself look weak in the public's eye, for no benefit? Bizarre strategy on Sony's part.
MS claimed CoD is irrelevant generic game, even though they are buying it...
Microsoft at no point has said that CoD is the primary reason they're buying ABK. They've identified the Blizzard portfolio as being important to them (and rumour has it they intend to roll the WoW subscriber base into Game Pass in some fashion). They've identified King and Candy Crush as being important to their mobile ambitions. So, you're right, but that's not necessarily a contradiction.
How about you focus on NOT degrading your PC ports before jumping on others thinking they would do the same.
OOOooooohhh!
sick burn!
This statement is saying one of two things. Either PlayStation management is totally incompetent and has failed to create a viable ecosystem that is not dependent on a single product that is provided by somebody else, or they are lying to the regulators. There's no other possibility. (It's clear to apparently everybody except Sony that they are lying to regulators.)
Also, this argument doesn't make any sense. It might hold some water if Microsoft were trying to somehow forcibly steal a property that was controlled by Sony now. But that's not the case. Activision controls Call of Duty now. Sony doesn't have control of it to start with. So they're not losing anything. It's just that the party that controls this thing on which Sony is apparently so dependent is going to become somebody else.
If we follow the example set by Sony (and everyone else), it would be fine for Microsoft to pay for console exclusivity for Call of Duty. That should have the same impact on Sony as Microsoft buying Activision, according to Sony. But, Sony has made clear that paying for console exclusivity is an acceptable business practice.
And if we consider all of that, Sony would actually be in a better position if the Microsoft deal goes through, as Microsoft is guaranteeing Sony they will continue to get access to Call of Duty. Sony does not have that guarantee today. Activision could stop releasing on PlayStation whenever Microsoft decides to write them a big check for it.
Basically, this whole thing is ridiculous. I don't know how these guys can look themselves in the mirror at night.
I always thought there was no incentive for Sony to pursue any negotiation with Microsoft. You put things very well here and, while it is not really your point, it makes me think actually it may make sense for them to negotiate with MS, especially if the deal is very likely to go through with the regulator. Their current access was never guaranteed and MS could moneyhat too without acquiring. I think a lot of people didn't look at that angle enough.
Yes, I think It probably makes sense for Sony to negotiate and try to get something like 12 years guaranteed instead of 10. The problem is that Sony has lost most of their leverage, because the regulator that appeared most likely to cause problems for the deal has now said they don't see a problem for competition in the console space. So, Sony's argument has mostly already been dealt with.
That said, Sony coming out in support of the deal would be helpful to Microsoft. At that point, I think every one of the big players in gaming would either be neutral or supportive of the deal. I don't recall any objections from Tencent or Bytedance, correct? Anyway, they still have a little bit of leverage. But I think they would have been better off to negotiate something 6 months ago.
There are lots of things Sony could negotiate. They could try to negotiate 12 years, as you say. They could try to negotiate better financial terms than Nintendo, Nvidia, etc., are getting because PS is such a big part of Call of Duty's sales. They could try for guaranteed access to the rest of ABK's portfolio (Crash, Spyro, Tony Hawk, Diablo, etc.).
Heck, if it helped the deal get done, Microsoft might actually be willing to extend Sony's current deal with Activision that gives them exclusive benefits (Microsoft may be willing to play ball further into the PS5 generation on this point, but definitely not into a theoretical PS6 timeframe).
There's so much Sony could try to get, in exchange for dropping their objections. What a short-sighted approach Sony's taken.
Ok I'm a PlayStation user and fan and even I want Jim Ryan to stop his whining already!! It is pasrt the point of being embarassing now
Do you smell that?? The indistinguishable whiff of desperation.
Japanese support
Loads of moneyhats
Decades of brand awareness and accolades
Great first party games
We’ve been lead to believe these are why PlayStation is in the position it is in. Apparently we were wrong and Sony says it is all Call of Duty.
Microsoft you know what to do, besides they have no legal obligation to release COD on PS to begin with.
Nintendo has been doing just fine with not even a degraded version of call of duty
So umn... how about that recent TLOU PC port release then, Sony?.
Well, Nintendo also never recovered because of the lack of CoD. ... Wait...
The Real question is will PlayStation survive this degraded version of the PlayStation CEO.
So what is everyone playing? I've been in a Berserk kinda mood so I replayed Soulstice and Sword of the Berserk Guts Rage on Dreamcast and now playing Berserk on PS4. Not the best mousou game. Still more interesting than yet another Jim Ryan Cod whatever.
Replaying South Park The Stick of Truth for a 3rd time, while also doing my daily and weekly challenges in Halo Infinite and Overwatch 2 right now. Will play Ghostwire Tokyo once it hits Gamepass on the 12th, and then Dead Island 2 later this month.
talk about exageration.
If PlayStation is largely reliant on one massive multiplat IP to stay lucrative, they seriously need to look in the mirror and have an overhaul of their brand.
Sounds like Jim and PlayStation are just desperate to get as much money from COD as possible and overexaggerating its importance.
Of all of Sony’s lies, this one is true you guys, I swear. 🤣🤣.
Jim Lying has in his whole series of lies, not once mentioned how much Sony gets profit from call CoD.
its about 300-400 million per year. PlayStation itself made 24 billion in revenue last year. Look it up.
You know why Jim lying won’t tell you these numbers, because it shows what a gigantic liar he is.
That a company that made 24 billion in revenue last year, would be at risk of collapse after losing only 300 million for CoD, is clearly absurd.
Talk about a drama queen. Every time you make someone exclusive you're going to lose some gamers. Losing Call of Duty would make Xbox more competitive sure. But it wouldn't kill Playstation.
Yawn.....
This idjit knows that PlayStation existed before CoD right? PS2 was the best selling console of all time without CoD as well. It got 1 cross-gen game right at the end of its life cycle, that's it. If you're seriously telling me Sony are now completely dependent on that 1 3rd party franchise to maintain their business... then Sony must've been run by incompetent fools for the last 15 years. Not something you should really be admitting when that would make you one of them...
Well, I guess that’s ’your’ problem, Jim.
this just makes me want to see Microsoft doing exactly that. And get FIFA exclusive for 3b Dollars a year while you are at it.
Then Perish
Fear mongering at it's best.
Sad thing is, Jim's probably right. I just remembered Sony's claims that CoD sales on PlayStation help fund their first-party releases. I thought they were being overly dramatic, but talk about putting yourself in a bad position if that's completely true.
Some of these statements don't feel very meaningful.
"CoD sales on PlayStation help fund their first party releases"
This is pretty much the norm. Third party licensing/owning the store is a big deal. Apple gets billions of dollars of free money off owning the store. It's most of Valve's business.
Nintendo still makes money off third party sales, but they are probably the most independent.
For MS and Sony both, there are a couple of third party titles that pretty much by themselves make an absurd chunk of their platform usage. And either of them would see some amount of harm to their bottom line if they were to lose those titles. If Fortnite or CoD left a platform, whatever platform holder they left would lose hundreds of millions of dollars of practically free profit. Just off the one game, they might end up losing 10 or 20% of their profit.
Jim Ryan is also concerned about the sharing effect. A lot of people buy a particular platform to play games with that other person. Person B might not play CoD, but they play FIFA with person A who bought an PS for CoD. So Person B will end up getting an Xbox instead to play FIFA with their CoD friend for example. That effect is probably unknown, even to analysts.
On the other hand, Sony and MS are both less dependent on third party than they've ever been. But they both still rely a lot on third party. There are tons of gamers who buy a PlayStation for God of War, Uncharted, The Last of Us. I don't think either of them are quite at Nintendo's level, where 100 million people buy their console pretty much exclusively to play Mario/Mario Kart/Zelda. But they're both much closer than they've been.
Overall, Jim Ryan is probably wrong about how big the effect would be. It would definitely be a bad hit for any publisher, but I think SIE will be fine.
It was claimed By Yoshida when he was head of SWWS that the money that's returned to development from Sony's top 1st party games means besides funding their next game each top 1st party contributes on average to an extra 7 first party games per AAA game being funded thus helping ensure the PS libraries variety and Shue was also at pains to point out that the majority of those funded games either break even or make a profit, and lets not forget that first party sales have skyrocketed since that statement, so that and history shows there's no way that Sony needs COD to finance it's first party games.
Sure it would hurt the back pocket but it isn't essential and talking about back pockets it should be remembered that COD not being on PS hurts MS too, its just a scare campaign to try to stop the acquisition or more likely at this point at least make it hard for MS to get much in the way of any other big gaming deals beyond ABK. through the door.
