The new console generation is taking shape, and it promises to be more competitively fought than the last generation where Sony was able to run away the winner with more than 115 million PlayStation 4s sold, to Microsoft’s estimated 50 million Xbox Ones sold. Square Enix remains one of Sony’s biggest partners, and rumors of a buyout troubled PlayStation fans last week.
Recently, Microsoft delivered the biggest punch so far by acquiring Bethesda and all its IPs. Sony, on its part, still has its formidable library of IPs, that include The Last of Us, God of War, Horizon, and the Uncharted Series. However, Microsoft’s Bethesda move ensures that some of the biggest third-party sellers of the last decade are now Microsoft exclusives.
Microsoft’s move will pay massive dividends over next 6-10 years, and if recent developments are a sign of things to come, Sony might find itself fighting off the back foot for the first time since the early PlayStation 3 days.
Is Square Enix an Important Player in 2021?
Logic would dictate that yes, maybe not as big a player (in terms of recent sales trends) as Bethesda (Skyrim alone sold more than all Final Fantasies released in the last decade), but a massive one, nonetheless. This is especially true if you are Sony. Microsoft acquiring Square Enix would do damage to Sony’s console business over the next decade. Therefore, when Bloomberg of Japan spread a rumor last week that there were potential suitors for Square Enix, social media went ablaze.
Considering that Square Enix also owns huge IPs like Dragon Quest, and Tomb Raider, the company would sell for a substantial amount of money (perhaps even higher than Bethesda), and Microsoft, as opposed to Sony, would be the one suitor with pockets deep enough to make such a buyout a reality.
Sony paid Square Enix money for Final Fantasy XVI’s timed exclusivity which should soften the blow for PS5 owners who will have to look from the other side of the fence as Xbox owners and Game Pass subscribers play the next Elder Scrolls, and the next Fallout in the competing console. But beyond Final Fantasy XVI, and the current FFVII Remake (which remains confined to Sony hardware), a theoretical buyout of Square Enix would leave PlayStation 5 owners devoid of the two biggest JRPG franchises today in Dragon Quest and Final Fantasy.
Such a move would force a good chunk of PlayStation gamers to shift towards Microsoft’s much greener (at that point it would be a near monopoly) Role-Playing Gaming pastures.
After all, can you imagine all future Final Fantasy, Tomb Raider, and Dragon Quest installments free of charge, from day one, within Xbox’s Game Pass Subscription? I can, and it wouldn’t look good for Sony and the PlayStation brand.
Are the Rumors Valid?
Square Enix shot down the rumors two days ago by releasing the following statement:
Bloomberg has reported today that there is interest from several buyers to acquire Square Enix. However, this report is not based on any announcement by SQUARE ENIX HOLDINGS CO., LTD. We do not consider selling off the company or any part of its businesses, nor have we received any offer from any third party to acquire the company or any part of its businesses.
So, officially at least, there are no negotiations for a buyout going on, and no one has made any offers for the company. For the time being we will take Square Enix’s word for it, but as we know, negotiations in the business world take place behind closed doors, and it wouldn’t be shocking if tomorrow Square Enix reverses its stance.
One thing is for sure, if Square Enix were to be up for sale, Microsoft would be a very interested party in the company, and Sony would lose one of its important Japanese “Partners”.
Sony Shut Down Japan Studio, and Has Put Stricter Measures on its Western Developers
PlayStation fans (at least some of them) were not happy about Sony’s decision to shut down the iconic Japan Studio in favor of Western development. But last week, news broke out that Sony Bend was told that Sony wouldn’t fund the sequel to their new, and somewhat commercially successful IP, Days Gone.
Sony told Bend that the game would not be greenlighted based on the poor Metacritic (71) reception that the first title got, and its troubled long development. Despite the rumored sales of 3-4 units, Sony found the game to be a risky endeavor. While 3-4 million units sold sounds like a great number, most of those sales came when the game was on “Sale” at $9.99-19.99 price points.
The ordeal led to some of Bend’s top talent to leave the company, and John Garvin (Days Gone’s creative director) had a few issues to discuss with gamers that bought Days Gone on “Sale” on Dave Jaffe’s Podcast (April 17):
“I do have an opinion on something that your audience may find of interest, and it might piss some of them off. If you love a game, buy it at fu—ing full price. I can’t tell you how many times I have seen gamers say ‘Yeah, I got it on sale, I got it through PS Plus, whatever.’
Whatever the case it seems that Sony is now more reserved than ever in choosing which properties it will invest its money into, and when that line of thinking (cutting costs) starts to happen, one must wonder how healthy the company’s finances are.
Days Gone is rumored to have cost $150 million dollars to make. Clearly, by not green lighting its sequel, Sony is sending a message to its studios that AAA games will not be funded unless they have been part of IPs that are critical, and commercial hits.
It remains unclear what their stance will be with new IPs, I assume that trusted developers like Naughty Dog will have a better chance at introducing new properties.
This is why it is important for Sony that Square Enix maintains its autonomy, Square’s lineup will be important for the PlayStation 5’s success.
PlayStation 5 Winning the Short Term Battle, but Microsoft is Expected to Make a Mid Generation Push
The PlayStation 5 remains the hottest, and most wanted console by consumers out there, but there are a few issues. Sony’s main problem right now (apart from shortages) is that said consumers can’t find the console as scalpers have been nabbing them before they can in online shops.
The PlayStation costs more to make than it costs at retail. This wouldn’t be a problem if actual gamers had the console on their hands because money would be made on software sold. PlayStation 4 software is still selling well which should help Sony cover any costs incurred by the PS5 launch, and its shortages.
Sony will do well at least for the first half of the generation, its studios are already gearing up for Horizon Forbidden West, and God of War: Ragnarok releases over the next two years, while Microsoft’s big hitters (apart from this year’s Halo Infinite) are scheduled to arrive in 2023 and beyond.
Microsoft has a more compelling line in the long run, and it remains to be seen if Sony without its Japan Studio, and their new ‘conservative’ approach to new IPs will help them succeed in a way that it can counter what I think will be a strong Microsoft mid to late gen push. Sony has also failed to provide a viable alternative to Microsofts’ fast-growing Game Pass and given their financial budget, I really don’t expect them to enter competitively into that particular arena.
Breaking: Sony Backtracks on Closure of the PS3, and Vita Stores
Sony took a lot of criticism for its scheduled closure of its PS3, and Vita stores. Apart from hinting at the company’s new stance of cutting costs, it also gave the PlayStation brand an “Un-realiable” reputation given that many gamers had spent hundreds of dollars in said stores.
If there is something Microsoft has done well is in preserving the media acquired through its online shops, by contrast Sony’s stance in closing those stores was seen as tyrannical in some circles.
It seems that the company heard the consumer’s pleas and has decided to reverse the decision for the foreseeable future:
“Upon further reflection, however, it’s clear that we made the wrong decision here. So today I’m happy to say that we will be keeping the PlayStation Store operational for PS3 and PS Vita devices. PSP commerce functionality will retire on July 2, 2021 as planned.” – Jim Ryan, Sony Interactive Entertainment president and CEO.
Closing the stores would have been a bad a look, and would have damaged the brand’s reputation going into the PlayStation 5 generation, as the Xbox brand has been the more reliable in terms of older game preservation and backwards compatibility.
For now PlayStation owners of digital PS3, and Vita media can rest easy, their voices were heard, and Sony did the right thing.
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