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The third day of hearings that will see Microsoft and Activision appear before the FTC in a pending acquisition case is underway, with Sony Interactive Entertainment CEO Jim Ryan presenting his testimony.
Unlike the Microsoft executives, Ryan’s testimony was given on pre-recorded video, and he shared several interesting points.
Ryan says Xbox consoles are more popular in the US than in other regions because many of their games include elements of shooting and online multiplayer, which are generally more popular in the US than in the rest of the world.
Ryan also admitted that Sony’s own games tend to be exclusive as the company uses them as a point of difference when gamers decide which console to buy.
We also heard from the CEO that he thinks Nintendo is in a different market segment than the Xbox and PlayStation because Nintendo hardware is less complex, cheaper and aimed at a younger audience. Later in his testimony, he acknowledged that Nintendo had a presence in the console market, but confirmed that he believed they were not in direct competition with Sony. In his personal opinion, the Nintendo audience loves Super Mario and The Legend of Zelda, but not Call of Duty.
Ryan reiterated that Sony will not share PlayStation development kits with Activision in advance if it is owned by Microsoft, as it cannot rely solely on contracts to avoid leaking the console’s feature sets to its main competitor (Microsoft).
The executive also mentioned that an email from Phil Spencer meant to reassure him about the acquisition didn’t really have that effect.
Speaking of Call of Duty, Ryan believes that the strength of the series is that it comes out annually and that the games are different and unique. There is “nothing like it” in the industry. He also believes that Microsoft intends to use the series to disadvantage the PlayStation in terms of accessibility and lure PlayStation users to Xbox, namely Game Pass. He further noted that it is very important that the PlayStation version of CoD games be equivalent to the Xbox version, in terms of “release date, game quality, error rate and other such vectors.”
Ryan explained that in May 2022 he considered it possible to reach an agreement with Xbox, and in January he was not concerned about Activision games being pulled from the PlayStation. Speaking about the letter in which he expressed his lack of concern, Ryan noted that at the time he had in mind exactly that. However, a letter was received in August that “really alarmed”. He admitted that he had a meeting with the British CMA in the summer, but he does not remember if it was before or after this letter.
Asked if he had heard anyone at Sony say that the deal would really hurt the company, Ryan said he didn’t know because he didn’t listen to calls. He also doesn’t know if he ever told investors that Sony couldn’t be competitive if the deal went through.
In February 2023, Activision Blizzard CEO Bobby Kotick offered to negotiate, but Ryan responded that he considered the deal anti-competitive and simply hoped regulators would do their job and block it.
Ryan currently believes that Xbox will take Call of Duty off the PlayStation as they have an incentive to do so. When asked what he would do if the roles were cast, he declined to answer as it was a hypothetical question. To further questions, he replied that he did not have enough knowledge to answer.
Asked if he had proof that Microsoft would remove CoD from the PlayStation, he replied that he thought Microsoft’s stance on subscription service pricing was, at best, a partial denial.
Ryan also said that he has spoken to all the publishers and they are unanimously opposed to Game Pass because it “destructively” affects the value of gaming products, and that has been the consensus view for many years. He also never asked Activision to release Call of Duty on PlayStation Plus as it was about catalog games, with Bobby Kotick stating that this was not the path he envisioned for Activision games.
The executive spoke about PlayStation Now, saying it already has 3 million users and believes the cloud will be a significant component of gamers’ access to games between 2025 and 2035.
