Nearly two years after announcing the acquisition of Activision Blizzard King, Microsoft was finally able to complete the purchase. The American company triumphed over the UK's CMA and the US's FTC to make this the biggest deal in gaming history and one of the most surprising in the tech-digital sector. But that wasn't the only defeat for the opposition; Xbox's victory was also Jim Ryan's defeat.
[Related Video: Microsoft paid $70 billion for Activision Blizzard]
A STORY FROM TWO FRONTS
The current generation began with significant changes in PlayStation and Xbox. Sony, under Jim Ryan's perspective, opted for a unifying, global approach, focusing on diversification and a break from the past while looking towards the future. In the case of Xbox, a new era led by Phil Spencer proposed a radical change: breaking hardware barriers, prioritizing the ecosystem, making gaming more accessible, and strengthening the brand's content.
Each brand began its journey with its respective consoles, PlayStation 5 and Xbox Series X|S, set to compete in the market, and the development of their gaming proposals would occur in parallel. However, both paths would soon intersect with a series of moves that would be celebrated on one side but would raise alarms on the other.
Xbox entered this new era hand in hand with Xbox Game Studios, a division that would consolidate and strengthen what was once a weak first-party content arm during the Xbox One era. Some AAA studios, some AA, teams with indie essence, everything seemed normal until the industry shook in 2020 when Microsoft acquired Bethesda | Zenimax, a move that propelled Xbox Game Pass and cast doubt on the future of those games on PlayStation, which set off the first alarm in Sony.
[image id_image="819336" caption="Xbox + Bethesda: PlayStation sounded the alarm" width="?" height="?" crop="false" alignment="gif" target_url="null"][/image]
While all of this was happening, PlayStation was going through a transition phase between the PS4 and the PS5 with a different perspective that resulted in controversial decisions, some of which were reversed, such as reluctantly approving backward compatibility for the new console, supporting the price increase of games to $70 USD, the closure of JAPAN Studio, and attempting to charge for upgrading a PS4 game to PS5.
"Jim Ryan had become overnight the public enemy number one for hardcore PlayStation fans."
In short, Jim Ryan had become overnight the public enemy number one for hardcore PlayStation fans. But at least he had the success of the PS4 and the positive reception of the PS5 on his side. It seemed that the new Sony console would continue to be the home of Call of Duty, FIFA, and Fortnite, a crucial trio that had quietly passed through, but it wouldn't be long before this reality was revealed in its true dimension.
[image id_image="819337" caption="Jim Ryan, the public enemy number one of PlayStation fans" width="?" height="?" crop="false" alignment="gif" target_url="null"][/image]
In January 2022, Microsoft made history in the video game industry. The acquisition plan that started with the purchase of Mojang and Minecraft in the midst of uncertainty and a directionless brand had proven to be the way forward for Xbox. There was no time to grow organically, nor was it feasible to invest hundreds or thousands of millions of dollars in research, development, and project incubators. The video game industry had entered the initial consolidation phase, and the one who struck first would strike twice. Xbox Game Studios, plus Bethesda, plus Activision Blizzard King for $70 billion.
XBOX EXPOSED PLAYSTATION, AND SUDDENLY EVERYTHING CHANGED
Jim Ryan's leadership at PlayStation was plagued by internal problems, but the PS5's success in the market and the critical acclaim for its exclusive titles made it seem like it was just a rough patch. After all, the pandemic would eventually end, the PS5 would take off, and life would go on without Bethesda and Starfield. Unfortunately for Sony, the purchase of Activision Blizzard King was unexpected and came as a shock.
There are moments or positions in the corporate world where you don't do what you want but what you must. In Jim Ryan's case, his controversial leadership at PlayStation also made him the brand's defender in the face of Microsoft's moves. Some specialists and fans speculated that he had found himself in a do-or-die situation: either prevent the acquisition of Activision Blizzard to safeguard Call of Duty, or resign.
[image id_image="819338" caption="Xbox + Activision Blizzard King: PlayStation panicked" width="?" height="?" crop="false" alignment="gif" target_url="null"][/image]
Sony | PlayStation's opposition to Microsoft's purchase of Activision was immediate, and the demands for the brand increased dramatically. Jim Ryan relied on the possibilities available to thwart the deal in the US and the UK. In the US, due to the long-standing aversion of the American government to large digital corporations and their attempts to control everything, and in the UK, because of the skepticism and disappointment of the economic "vanguard" of the European Union, which took a traditionalist and quasi-protectionist approach. The English would do everything to stop Microsoft's progress. In one of the meetings where executives from the companies involved met with European regulators, Jim Ryan was blunt, saying, "I don't want a deal for Call of Duty; I just want to block the acquisition." The battle was declared, but PlayStation had a lot to lose. Eventually, Microsoft had to offer remedies, sign commitments, and sweet-talk regulators in the UK and the US to close the deal.
PlayStation was caught between a rock and a hard place, having to admit that Call of Duty and the exclusive agreements with Activision were a vital source of income for the brand. Jim Ryan even acknowledged that any disruption or modification of the status quo would affect PlayStation Studios' developments. Essentially, Ryan admitted that without Call of Duty, there would be no PlayStation exclusives. So, titles like The Last of Us, God of War, Uncharted, Horizon, and others seemed more like creative indulgences than financially justified works, as they do contribute to the brand's value and identity, but are they also profitable?
"Ryan admitted that without Call of Duty, there would be no PlayStation exclusives."
It's not that this wasn't known; you only needed to look at the monthly best-sellers lists for PlayStation games over the last years of the PS3 and throughout the PS4 era to find the annual Call of Duty release at the top. It just wasn't expected that this would be exposed dramatically, and that the mighty Sony would cry at the prospect of losing what it thought was its own jewel. The deal between PlayStation and Activision was privileged, with Call of Duty having a separate agreement regarding revenue and profits sharing due to its multi-billion-dollar revenue. It's understandable that Sony's Japanese leadership, led by the British general, felt threatened. Jim Ryan played his cards, and it was just a matter of time before regulators either played along or ended his story at PlayStation.
[image id_image="819340" caption="Callof Duty: the gem that PlayStation thought was its own" width="?" height="?" crop="false" alignment="gif" target_url="null"][/image]
[heading level 2]XBOX WON, JIM RYAN LOST, BUT DRAGGED PLAYSTATION DOWN[/heading]
Despite some battles won through regulatory channels, the approval of the purchase of Activision Blizzard seemed inevitable. The relationship between PlayStation, Activision, and Call of Duty would never be the same, and a response was needed immediately. PlayStation Studios made some acquisitions, but the one that garnered attention was Bungie. Jim Ryan, emphasizing the need for PlayStation to adapt to new trends, entrusted the company that created Halo with the responsibility of leading a games-as-a-service proposal, the Holy Grail that, when found, could ensure long-term success and stability, just as Activision experiences with Call of Duty, Epic with Fortnite, and Mojang with Minecraft.
[image id_image="819341" caption="PlayStation + Bungie: an emergency measure" width="?" height="?" crop="false" alignment="gif" target_url="null"][/image]
The process is ongoing but has encountered various difficulties, from the reluctance of some PlayStation Studios to work on this type of game to the debacle of The Last of Us: Part II's multiplayer mode. However, Jim Ryan's directive was clear: find new revenue sources immediately because they could no longer rely blindly on Call of Duty.
Simultaneously, Jim Ryan's era at the helm of PlayStation not only faced Microsoft and Xbox's wave of acquisitions but also the current reality of an industry that no longer belongs to players or companies, but to investors. While the PS5 weathered the pandemic and the subsequent period, and even managed to match the sales of the PS4 during the same period, it was considered mediocre in terms of performance compared to other divisions within Sony that became cash machines.
[image id_image="819342" caption="Sony's stock performance continues to worry investors - Image: Yahoo!" width="?" height="?" crop="false" alignment="gif" target_url="null"][/image]
Uncertainty within and outside, and an imminent defeat. It would be naive to think that the top executives of the companies involved in the largest acquisition in gaming history did not know the result days before. On September 27, 2023, Sony announced Jim Ryan's departure, who ceased to be the president of SIE immediately and will remain as CEO for a few more months while they seek a new leader. Ryan attributed his decision to the complications of running a global business while residing in one country and having the company's headquarters in another. The response seemed formal, but the timing and context were no coincidence.
On October 13, 2023, Microsoft defeated the CMA and completed the purchase of Activision Blizzard King, a move that will change the history of video games forever. Xbox became a powerhouse with over 50 teams, including publishers, developers, and specialized divisions in complementary areas, all working ambitiously towards the future, where the Xbox gaming ecosystem is poised to lead in an industry that is finally shedding its past and ushering in a new era.
[image id_image="819343" caption="Xbox + Activision Blizzard King is official" width="?" height="?" crop="false" alignment="gif" target_url="null"][/image]
THE FALL OF JIM RYAN
Ironically, recent events seem to perfectly encapsulate what is happening in the video game industry. Change is always complicated and sometimes painful. The end of an era and the start of a new one can be tumultuous processes. In this case, PlayStation, under Jim Ryan's leadership, played an all-or-nothing card to survive but lost. The result left no option but to say goodbye. Things will change, which Sony either didn't want or didn't want to happen beyond its control, so the process of change and reconstruction must be in motion. Today, the celebration is at Microsoft and Xbox, which seems deserving after more than two decades of learning, successes, and failures. Nevertheless, this great victory also marked the great defeat of the infamous Jim Ryan.
Comments
Best
New