Sony Estimates $1.5B Loss Due To Microsoft's Activision Blizzard Acquisition: 'Our Pillars Are Already Dated'

Sony Group Corp. SONY is anticipating a $1.5 billion loss by 2027 due to Microsoft Corp.'s MSFT acquisition of Activision Blizzard.

What Happened: Sony sees the merger of Activision Blizzard and Microsoft as a substantial threat to its console and subscription businesses, according to documents revealed in the 1.6TB Insomniac hack.

Sony had voiced strong opposition to the merger, prompting Microsoft to assure that it would make Call of Duty available on PlayStation for ten years.

Despite Microsoft’s promise, Sony remains concerned, as revealed by internal documents from a recent Insomniac hack. Sony views the merger as a potential major disruptor, possibly allowing Microsoft to surpass it in the console market.

A confidential slide from the presentation shows Sony is worried. "Microsoft's acquisition of [Activision] positions it to leapfrog our current pillars," Sony is claimed to have said in its internal documents, citing Activision’s strategic importance in live service games, mobile scale, and PC storefronts.

Although Microsoft has committed to a decade of Call of Duty, Sony foresees the possibility of Microsoft manipulating release schedules to strengthen its subscription leadership. Sony predicts this could result in a substantial $1.5 billion deficit by 2027.

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The documents further underscore Sony’s challenges in crafting an ideal game subscription model and a seamless mobile, PC, and console experience, feeding into its gloomy forecast.

Why It Matters: Earlier, Microsoft CEO Satya Nadella expressed his desire to eliminate console-exclusive games, a vision stymied by Sony’s stronghold on the gaming console market and its strategy of leveraging exclusives to drive sales.

These moves from Microsoft and Sony’s struggle to establish a unified gaming experience across platforms could be central to Sony’s anticipated loss.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.