Microsoft CEO Satya Nadella is downsizing Microsoft’s gaming division, Xbox, for strategic reasons. And Sony and its PlayStation are suddenly going big. At the end of the day, it’s all about Call of Duty and billions of dollars.
This is what the head of Microsoft says: In a statement to the side Bloomberg Microsoft Chief Executive Officer Satya Nadella talks about the size of Microsoft’s gaming arm, the Xbox. He says:
“Microsoft is either #4 or #5 in the video game industry. It depends on how you count. Sony, on the other hand, is the ‘number 1 player’. “
Sony would have bought “several companies” recently. Nadella apparently means Destiny developer Bungie.
So when it comes to having competition, let’s have competition.
Microsoft CEO wants to avoid the impression of dominating the market
Why is he downplaying the Xbox? There are strategic reasons for this.
Microsoft made a takeover bid for Activision Blizzard in January 2022. It’s about $69 billion.
Such a purchase must be approved by regulatory authorities worldwide. Because there is a danger that such a gigantic corporation will emerge that it will assume a monopoly position and endanger free competition.
Currently only Saudi Arabia has given the green light – in the EU and Great Britain the authorities have announced that they will examine the purchase more closely. They want to find out whether a merger “would substantially reduce competition”.
Sony has expressly welcomed this investigation.
Microsoft boss is “very, very safe”; that the purchase of Activision goes through
Does the deal go through? When it comes to Microsoft’s CEO, he feels very confident:
“Of course every purchase of this size is thoroughly investigated, but I feel very, very much that we can get away with it.”
What is Sony’s problem? Sony apparently fears that Microsoft could bring Activision’s “Call of Duty” brand to Xbox Game Pass at no additional cost or delete the series on Sony’s PlayStation. That would be a major disadvantage for players, in their view.
That’s why Nadella makes it so clear that Microsoft is just so small in gaming and Sony so big to underline: hey, we need the purchase for there to be any competition at all.
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