Why Microsoft should acquire Sony's gaming division
As I was thinking of something to discuss today, I peered beneath my HDTV and saw my Wii sitting next to my Playstation 3 and Xbox 360. And as soon as I looked at all three, it had me thinking: the Wii is a wildly successful platform, but the Playstation 3 and Xbox 360 are still limping along in the hope that they'll compete with Nintendo's platform at some time in the future.
But when we objectively consider the state of the industry, it becomes blatantly clear that Sony and Microsoft simply don't have what it takes right now to compete and more consumers are more excited about Nintendo's platform than anything Sony or Microsoft can dole out.
Realizing that, why wouldn't Microsoft acquire Sony's gaming division and consolidate its power and influence in the gaming space? I know, it may sound radical and at first glance you would think that Sony would never agree to such a deal, but keep an open mind for a minute and hear me out.
Sony's gaming division is quickly becoming a drain on its financial stability and shareholder confidence, while Microsoft is chugging along at a pretty good clip even though it has little influence in Asia. And although neither company can beat Nintendo alone, don't you think it's entirely possible that Microsoft and Sony could become a powerhouse in the industry if the former acquires the latter, thus making it a valuable idea?
Why Sony?
Undoubtedly some are wondering why I think Microsoft should acquire Sony and not the other way around. Well, Microsoft is the company with more money in the bank than Sony ever dreamed of having. On top of that, Sony is in no position to acquire a gaming division from a company that's enjoying record profits with its online platform and has finally turned things around after years of losing money.
Even though Sony enjoyed a small profit of about $51 million from its game division last quarter, it's still far behind previous generations and is quickly becoming a thorn in the company's side. Earlier this year, Sony announced that its games division posted a $276 million loss and over the course of its availability, things have been even worse.
Sony has blamed its gaming division's financial problems on high manufacturing costs and slow sales, but it's probably easier to blame it on poor management. Either way, it's not in a position to acquire a small developer, let alone Microsoft's gaming division, and to be honest, I'm not so sure Sony would mind doing just that.
The gaming division is still an important component in Sony's broad strategy, but it's simply not as important as it once was. With huge losses that may or may not turn to profits, Sony is in an awkward position. Should it simply wait and see what happens or should it go to Microsoft now and see if the company is interested?
And why wouldn't it be? By acquiring Sony's games division, Microsoft effectively eliminates the major competitor in its space and can increase its presence overseas -- a major sticking point for the company.
Right now, Microsoft is a major force in the US and Europe, but it's practically nonexistent in Asia. On the other hand, Japan has always been a Playstation 3 stronghold and even now, it far outpaces the Xbox 360 on almost every measure of performance.
But by acquiring Sony's games division, all those troubles are behind Microsoft. After the ink dries, it'll have a full-fledged customer base in Asia and together with its US and Europe customers, it can expand its Xbox Live platform to more people than ever before and truly become a fearful competitor to Nintendo.
Surely some are thinking that the deal breaker here is Blu-ray. Sony relies on the Playstation 3 more because of its Blu-ray capability right now than anything else. The company is so inexorably tied to Blu-ray that if the Playstation 3 fails, the high-def format will as well.
But I don't think that's a problem here at all. Microsoft would be more than happy to bring Blu-ray to its platform as long as people want to use it, and Sony would make out in the long-run anyway: both the Xbox 360 and Playstation 3 would undoubtedly offer Blu-ray drives, thus increasing its penetration rate.
Lest we forget, the only thing stopping Microsoft from offering Blu-ray now is that Sony is behind it and it doesn't want to pay off its competitors. But by acquiring the games division, it's eliminating that competitor and offering Blu-ray seems like an even smarter move.
Now is the prime moment for both of these companies to come together, strike a deal, and see Microsoft acquire Sony's games division. Microsoft is not only capable of writing a check for the division, it's fully aware that by acquiring Sony's third-party agreements, Blu-ray capability, and its worldwide presence, it can become an incredibly powerful force in the video game industry and solidify itself as a feared player going forward.
From Sony's side, the deal is a no-brainer. Over the last few years, the company has presided over the worst degradation in value the games division has ever seen and it's limping along trying desperately to turn things around. And now that its focus is squarely planted on Blu-ray above all else, why wouldn't it take the hefty price Microsoft would be willing to pay, right its wrongs, and make Blu-ray available on two gaming platforms?
It may sound radical, but a consolidated video game industry would be best for two of the big three. And now, we wait to see if they agree.
Check out Don's Digital Home podcast, Twitter feed, and FriendFeed!
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
I'm not a huge fan of the PS3, personally, i only use it for blu-rays at the moment, but i can see a year from now the price point being much more friendly and affordable. Blu-Ray is really the thorn in its side, because thats keeping the costs on the gaming side higher. Until there is a mainstream bluray player for 200, the PS3 stays outta reach for many Americans in these tough economic times. But people KNOW the sony name, and i don't think this is an argument which you can realistically support at the 2 years point of the life cycle. Its not out of the question, even the mighty Sega fell with a step too far (Dreamcast), its not impossible, but Sony is much too diverse to let this go easily.
Of course it's also a matter of making sure it doesn't open holes in the PS3 pub. standards. That'd be pure doom.
I?ll just take this bit here:
Right now, Microsoft is a major force in the US and Europe, but it's practically nonexistent in Asia. On the other hand, Japan has always been a Playstation 3 stronghold and even now, it far outpaces the Xbox 360 on almost every measure of performance
These are the figures for Japan right now:
Media Create numbers LTD
PS3
2.241.756 million
XBOX 360
597.582
Last week?s figures were:
PS3 10,692
Xbox 360 4,941
I wouldn?t exactly call that ?far outpaces the Xbox 360 on almost every measure of performance?
In fact, with the launch of Tales of Vesperia in Japan on Thursday, the 360 will outsell the PS3 this week, and probably next week as well.
With a slew of very good Japanese RPG?s coming out in August and September, and the PS3 likely to fall below 10,000 units sold a week again, the gap between PS3 and 360 weekly sales in the coming months is not going to amount to a whole lot, let alone far outpace the Xbox 360 .
Have you heard of Sony and their determination not to lose face in the gaming industry?
Have you heard of competition?
Have you heard of anything called monopolies?
This is impossible because 1. Sony would not dare team up with Microsoft, 2. Sony would not accept Microsoft's offers, and 3. If Microsoft couldn't buy out yahoo, then what makes you think they can buy out Sony?
Please, do some research before you spew this fanboy drivel on the internet.
Have you heard of Sony and their determination not to lose face in the gaming industry?
Have you heard of competition?
Have you heard of anything called monopolies?
This is impossible because 1. Sony would not dare team up with Microsoft, 2. Sony would not accept Microsoft's offers, and 3. If Microsoft couldn't buy out yahoo, then what makes you think they can buy out Sony?
Please, do some research before you spew this fanboy drivel on the internet.
Even without the impossible complications of merging the two biggest gaming divisions is that the article misses the real reasons for the struggles of both Sony and Microsoft. I don't think it properly realizes though that the big difference between this "console war" and generations past is mostly about price, especially in these tough economic times. The PS3 and XBOX360 are both still too expensive when compared to the Wii and is only magnified by the buzz about the fun Nintendo console. As prices come down (possibly this holiday season), both the PS3 and 360 will do much better. Then the games will come, and everyone will be happy.
0.64M Japan
12.09M America
7.33M Others
PS3
2.30M Japan
5.46M America
6.80M Others
Don't really know what chart you're looking at! But from the one I just pulled at VGChartz MS is pretty much losing in every territory except the US. Seems that year head start isn't helping much......
My Japan figures are direct from Media Create. PS3 Japan sales in Japan are pathetic. This very week, PS3 weekly sales in Japan will probably fall below 10,000, and next week, the 360 will outsell the PS3 in Japan.
In the rst of Asia, the 360 is ahaed of the PS3 in South Korea, Taiwan etc.
Europe? When sony tried to cliam that the PS3 had outsold the 360 in Europe, Microsoft shot that cliam down without any problem whatsoever. Even Sony was forced to admit that 360 sales had shot up sinnce the 360 price cuts in Europe in March, and GTA IV in April.
# 1. The 360 currently has a heck of a lot more, and better JRPG's then either the PS3 or the Wii, with plenty more to come.
# 2. PS3 sales in Japan right now are running at just twice that of the 360 per week, with the 360 on track to actually outsell the PS3 when this week's sales figures come out next week. By comparison, the original XBOX never even came close to outselling the PS2 in any week ever.
# 3. PS3 sales are on track to dip below the not so magical 10,000 units per week sales figures just this week, even as the 360 sales get a major boost from tales of Vesperia..
# 4. PS3 sales in Japan are pathetic when compared to Wii sales, with the Wii having already sold over 6.4 million units compared to only 2.2 million units PS3?s sold.
# 5. While the PS2 outsold the original XBOX by a massive over 40:1 ratio, the PS3 has not even outsold the 360 by 4:1 life to date.
# 6. The 360 has already sold more than the total life to date sales of the original XBOX, and is on track to end up selling over 3 times as many unit?s a the original XBOX did. By contrast, the PS3 is not even within a thousand miles of life to date PS2 sales, and has every indication of finding it very hard to hit that target in the foreseeable future..
to be ps3 exclusives...see link: http://boardsus.playstation.com/playstation/board/message?board.id=pslounge&thread.id=267865.why dont we hear of this anywhere? did microsoft buy the internet too? Also, the xbox has yet to be in the clear as well. (.7 billion in the hole...has never turned a net profit from any games whatsoever....ever...) You be the judge.
The Playstation brand, and its Japanese-exclusive IPs, have always been far too strong for anyone to overcome. Microsoft will lose again by a huge margin in Japan; it doesn't matter what they do, or how many JRPGs they have. The XB360 simply isn't popular in Japan, and this will almost certainly not change in the foreseeable future. Japanese people simply are not interested in Microsoft and Xbox hardware. This is an irrefutable fact, a foregone conclusion.
Is that why the Wii is outselling the PS3 by 4:1 every single week? and is that why PS3 sales are about to fall below the 10,000 a week mark(about the same as the PS2)?
Lets face facts: Playstaion brand has done nothing for PS3 sales so far.
At this stage in the previous generation, the PS2 was outselling the original XBOX by a massive 40:1 every week. Today, the PS3 is finding it hard even outselling the 360 by a measely 2:1 in Japan, and the 360 is actually managing to outsell the S3 in certain weeks, like this very week we are in right now.
For the rest of August and September, I don't really see any PS3 games, that is going to give the PS3 any major boost in Japan, even as the 360 enjoys solid boots from 3 big JRPG's in the next 2 months alone.
LOOK WHAT I DID THAR.
- by juuken2 August 5, 2008 1:44 PM PDT
- And Kwasiowusu spews even MORE CRAP!
- Like this Reply to this comment
-
Showing 1 of 3 pages (50 Comments)Wow...you're the worst 360 fanboy I have ever seen so far...not to mention pathetic.