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Tom Warren

Tom Warren

Senior Correspondent

Senior Correspondent

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    Tom Warren
    Tom Warren
    Sony’s hedge against Game Pass.

    We’re now looking at notes from a meeting with Fidelity investors in February 2022. Jim Ryan discussed the importance of first-party content to fend off competition from Game Pass:

    “One of the reasons why we are investing massively in first-party development and publishing is to provide us with an edge against pressure on a historic business model. Having a business model where you own elements from top to the bottom increases your ability to be self-determinant.”

    Microsoft lawyer: Do you think it would be better if Microsoft kept Activision games on PlayStation?

    Ryan: Yes, I do

    Microsoft lawyer: So you do believe it’s in Microsoft’s best interests to make Activision games available on multiple platforms?

    Ryan: No, I don’t agree with that

    Microsoft lawyer: So if you were running Xbox, would you recommend making Call of Duty and other Activision games exclusive to Xbox and PC?

    Ryan: That’s a hypothetical question that I don’t wish to answer

    Microsoft lawyer: So you don’t get to answer?

    Ryan: I don’t have enough knowledge to answer that question

    Tom Warren
    Tom Warren
    The Sony bombshell email is back.

    Microsoft’s lawyers bring up the email between Jim Ryan and Chris Deering, former CEO of Sony Computer Entertainment, discussing the announcement of Microsoft’s Activision Blizzard deal last year.

    “It is not an Xbox exclusivity play at all. They’re thinking bigger than that and they have the cash to make moves like this. I’ve spent a fair amount of time with both Phil [Spencer] Bobby [Kotick] over the past day and I’m pretty sure we will continue to see Call of Duty on PlayStation for many years to come.”

    Deering replied.

    “This deal would cement Microsoft as a player in mobile games. It strikes me as more of a king play than Call of Duty.” Ryan didn’t disagree.

    Tom Warren
    Tom Warren
    Jim Ryan confirms he told Activision he wanted the deal blocked.

    Microsoft’s lawyers bring up Jim Ryan meeting with Activision CEO Bobby Kotick on the same day as the European Commission on February 21st. We’d previously heard Ryan had said to Kotick “I don’t want a new Call of Duty deal. I just want to block your merger.”

    Jim Ryan confirms the meeting and what he said:

    “I told him [Bobby Kotick] that I thought the transaction was anti-competitive, I hoped that the regulators would do their job and block it”

    Ryan says Kotick wanted to “cover himself” with an extended Call of Duty deal with Sony:

    “What Bobby wanted to do was cover himself by extending the marketing collaboration between Sony and Activision, in the event of the transaction not proceeding.”

    Tom Warren
    Tom Warren
    What does Sony think about Starfield?

    Jim Ryan is asked if there’s anything wrong in Microsoft doing exclusives like Redfall. He says “I don’t like it but I fundamentally but have no quarrel with it.”

    What about Starfield?

    “I don’t like it, but I don’t view it as anti-competitive.”

    Tom Warren
    Tom Warren
    Sony’s alarm bells started ringing in August, apparently.

    Jim Ryan says an August August 26th, 2022 from Phil Spencer “really set alarm bells ringing” inside Sony. Up until that point Sony hadn’t negotiated an access agreement. Microsoft argues Sony didn’t have any initial concerns after a January 31st proposal email and calls to the Sony CEO and Jim Ryan.

    “I wasn’t particularly happy with the January 31st proposal, but hoped that it was an opening salvo,” said Ryan. “I believe this transaction is bad for competition.”

    Asked about whether Sony’s meeting with UK regulators in the summer of 2022 was before or after Spencer’s email, Jim Ryan can’t recall. “We certainly had one meeting with the CMA over the summer,” says Ryan.

    Tom Warren
    Tom Warren
    Sony is worried about Call of Duty on Xbox Game Pass.

    Sony PlayStation chief Jim Ryan says the company is worried about how Microsoft will use Call of Duty:

    “We believe that Microsoft intends to use Call of Duty to disadvantage PlayStation in terms of the availability or the manner in which the game is made available on PlayStation and to drive players to Xbox and specifically Game Pass.”

    Ryan then goes on to describe how PlayStation players could switch to Xbox:

    “A critical feature of a game console in terms of its attractiveness to people that make games is its level of install base. “If a meaningful number of people switched from PlayStation to Xbox... that most certainly would hurt gamers.”

    In a private email Ryan from last year, he said he wasn’t concerned about exclusivity. “They’re thinking bigger than that and they have the cash to make moves like this. I’ve spent a fair amount of time with both Phil [Spencer] Bobby [Kotick] over the past day and I’m pretty sure we will continue to see Call of Duty on PlayStation for many years to come.”

    Tom Warren
    Tom Warren
    Microsoft only offered older Activision games.

    Xbox chief Phil Spencer sent Jim Ryan a commitment list of games last year that would remain on PlayStation after the proposed Activision Blizzard deal closes.

    The list included Overwatch but not Overwatch 2. “Other Activision games on PlayStation must be sufficiently broad, to fully align with gamers expectations,” said Ryan in the email. He calls it “not a meaningful list” in his deposition.

    Tom Warren
    Tom Warren
    Sony is wary of sharing PS6 info with Microsoft.

    Sony’s PlayStation chief Jim Ryan says the company is wary of sharing dev kits and next-gen console information with Microsoft for their games:

    “We simply could not run the risk of a company that was owned by a direct competitor having access to that information.”

    Sony made the decision to delay supplying PS5 devkits to Microsoft for Minecraft:

    “The development kits allow developers to have visibility and to work on the feature set that our new console will deploy. It would typically mean a developer may bring its content to the new platform later than would otherwise be the case. The commercial risks associated with the knowledge of these feature sets leaking to our principle competitor is not something we’d rely on any contract to enforce.”

    Tom Warren
    Tom Warren
    Why is it beneficial to have third-party exclusives on PlayStation?

    Sony’s PlayStation chief Jim Ryan says it’s beneficial for third-party developers to sign an exclusivity deal for PlayStation because “development efforts required to make that game reduces.”

    The FTC has been arguing that exclusives are bad for competition and that Microsoft purchased Bethesda and kept games like Redfall, Starfield, and the upcoming Indiana Jones off PS5. Ryan expected these games to remain on PlayStation:

    “I think that pretty much every Bethesda game was multi-platform prior to the acquisition.”

    Tom Warren
    Tom Warren
    Jim Ryan believes Nintendo is in a different market.

    The FTC and Microsoft have been battling over whether the Nintendo Switch is a game console and whether it competes with the PlayStation and Xbox. Sony’s PlayStation chief Jim Ryan says “we consider Nintendo to participate in a different market segment to Xbox and PlayStation.” When asked to expand on that, he says:

    Nintendo’s hardware technology is of a much less sophisticated nature to PlayStation or Xbox. Its hardware typically retails for a cheaper price and its audience is aimed rather younger.

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