Support NeoGAF

[Heisenberg007]

The difference is if Sony buys Take 2, they will still remain multiplatform similar to Bungie. They have to, they wouldn't be able to afford for Take 2 to be exclusive.

If any company can make those big games exclusive, it is Sony.

Think about it: these big games do not usually release on Nintendo. And Xbox represents the smaller userbase. If Sony makes, say, GTA 6 a PS5 console exclusive, they lose out on hardly 25% of the sales. But increase their revenue from 30% to 100% -- which more than makes up for the lost revenue.

Rockstar games do not launch on PC day one anyway: both GTA and RDR 2 were timed console exclusives. RDR 1 did not even release on PC.

So Sony can release the games first on PS5 and later release them on PC 6-12 months later, and literally nothing would change -- except the lost ~20-25% revenue from Xbox sales (which, again, represent the least amount of sales).

 

[mckmas8808]

Still think Kadowaka makes the most sense for Sony corp.

Me too.

 

[mckmas8808]

I still think it would be dumb to buy T2 and then keep GTA6 off of Xbox. Why wouldn't you want their 30%?

 

[DrFigs]

Unless something drastically changed lately, pretty sure their finance arm is one of Sony's most consistent profitable divisions. Selling it would be odd.

They would still own 20% stake in it. But it does seem like a pretty drastic move

 

[Thirty7ven]

I still think it would be dumb to buy T2 and then keep GTA6 off of Xbox. Why wouldn't you want their 30%?

It’s a moot point anyway, Sony isn’t doing it.

Their strategy is to create transmedia IP. They will keep PlayStation hardware going until it goes the way of the Walkman and then become an arms dealer in the gaming space, which is a really weird move imo considering they make most of their money from third parties.

They are a very conservative company though, so it is what it is. If they didn’t consolidate in Japan when it was easy, and don’t consolidate in the west at a time when it makes sense, then they won’t in the future.

They are banking on Bungie and their live service initiative, and they are banking on it hard.

 

[mckmas8808]

It’s a moot point anyway, Sony isn’t doing it.

Their strategy is to create transmedia IP. They will keep PlayStation hardware going until it goes the way of the Walkman and then become an arms dealer in the gaming space, which is a really weird move imo considering they make most of their money from third parties.

They are a very conservative company though, so it is what it is. If they didn’t consolidate in Japan when it was easy, and don’t consolidate in the west at a time when it makes sense, then they won’t in the future.

They are banking on Bungie and their live service initiative, and they are banking on it hard.

Agreed. But I'd also say they are also banking on their single player games also and extending those out to their gamers to play them in different ways (i.e. PSVR2).

 

[Thirty7ven]

Agreed. But I'd also say they are also banking on their single player games also and extending those out to their gamers to play them in different ways (i.e. PSVR2).

VR is a failed venture. It's fun sure, but it's going nowhere fast. Sony's blend of character focused games also do not work in VR because only First Person works in VR.

They should've picked those resources and invested elsewhere.

 

[DrFigs]

VR is a failed venture. It's fun sure, but it's going nowhere fast. Sony's blend of character focused games also do not work in VR because only First Person works in VR.

They should've picked those resources and invested elsewhere.

I think a lot of companies bought into the metaverse hype. It's clearly not paying off. Even Apple is wasting money on it.

 

[Mephisto40]

I think a lot of companies bought into the metaverse hype. It's clearly not paying off. Even Apple is wasting money on it.

Because one day VR is going to be common place in gaming setups, so getting your foot in the door early makes complete sense business wise

 

[RagnarokIV]

It's the beginning of the end for Sony Financial Group + Speculation as we know it.

 

[DEAD ORIGINAL]

Shouldn't be allowed to happen.People can't complain about a monopoly when Microsoft try to buy ABK but be ok with Sony buying Take Two

I'm ok with Microsoft taking abk

 

[Gojiira]

Good news if it gives PlayStation more funds tbh.
Theres no chance PS buying T2 or other companies could get blocked either not after the rampant spending MS has been doing over the past few years even without ABK.
But more likely I see Sony going for a japanese publisher likely Capcom or Kadokawa.
Or beyond that, they do well to purchase Warner Brothers, getting all those film properties etc as well as Netherrealm/Rocksteady etc. be interesting to see what might come of it

 

[Mibu no ookami]

Unless something drastically changed lately, pretty sure their finance arm is one of Sony's most consistent profitable divisions. Selling it would be odd.

It's consistently profitable, but it's top end isn't high. It doesn't have high revenue potential like its entertainment and sensor businesses.

I've been telling people for a while now that PlayStation needs to improve its profitability and that is what Jim Ryan is focused on. They have tremendous revenue, but their costs are sky high. They either need to reduce cost or greatly increase revenue.

 

[Mibu no ookami]

Good news if it gives PlayStation more funds tbh.
Theres no chance PS buying T2 or other companies could get blocked either not after the rampant spending MS has been doing over the past few years even without ABK.
But more likely I see Sony going for a japanese publisher likely Capcom or Kadokawa.
Or beyond that, they do well to purchase Warner Brothers, getting all those film properties etc as well as Netherrealm/Rocksteady etc. be interesting to see what might come of it

I've thought about this and I don't know how it jives with their relationship with Marvel. Could have Marvel pull back support for Marvel's Spider-Man and Marvel's Wolverine. Could put the kibosh on a future Mavel's X-Men game.

But it makes a lot of sense in other ways. Sony Pictures is entirely too small to compete in the future. Would be a little bit more expensive than T2 but would potentially deliver more synergy opportunities. Sony doesn't have a streaming service of their own, which is fine for them right now, but in the future is going to put them at a pretty large disadvantage.

I think T2 probably helps more in the long run though. Maybe revisit WB in the future.

 

[PanzerCute]

only First Person works in VR.

Something tells me you know nothing about VR.

 

[bentanchorbolt]

VR is a failed venture. It's fun sure, but it's going nowhere fast. Sony's blend of character focused games also do not work in VR because only First Person works in VR.

They should've picked those resources and invested elsewhere.

Sony has VR and MS has cloud gaming. Each one may not mean much at the moment, but at some point both will be a big deal and having invested time and resources into that tech is going to pay off.

 

[mckmas8808]

VR is a failed venture. It's fun sure, but it's going nowhere fast. Sony's blend of character focused games also do not work in VR because only First Person works in VR.

They should've picked those resources and invested elsewhere.

It can't be a failed venture if you don't know what their profits\losses look like. Will it be the "NEXT BIG THING", no. But success in VR for Sony would be it turning into another pillar to generate revenue and profits. And you seemed to have forgotten that Gran Turismo has a first-person mode that works perfectly in VR.

And Sony has had a timed exclusive on this little 3rd person VR game on PSVR and PSVR2

 

[Baki]

They spent 8.5 billion on MGM just last year... Is that core?

They pay a billion dollars a year for NFL games on thursdays.

Actually in 2021, when the tech and stock market was at an all time high and they were hiring like crazy. Now, tech is going through a recession, stock market has taken a hit and tech companies are being more careful with their cash and laying off thousands of staff despite being quite profitable.

 

[Thirty7ven]

Something tells me you know nothing about VR.

This isn’t about you liking VR, it’s about the market. Which game coming out would you consider a killer app for VR? Why isn’t VR flying off the shelves? Why aren’t big time devs making VR games?

VR has had more false starts than I can remember.

 

[Gojiira]

I've thought about this and I don't know how it jives with their relationship with Marvel. Could have Marvel pull back support for Marvel's Spider-Man and Marvel's Wolverine. Could put the kibosh on a future Mavel's X-Men game.

But it makes a lot of sense in other ways. Sony Pictures is entirely too small to compete in the future. Would be a little bit more expensive than T2 but would potentially deliver more synergy opportunities. Sony doesn't have a streaming service of their own, which is fine for them right now, but in the future is going to put them at a pretty large disadvantage.

I think T2 probably helps more in the long run though. Maybe revisit WB in the future.

Hmm Idk, Warner IP is huge, and giving Sony essentially the DC Universe is a much bigger opportunity than say T2 and GTA. But having said that there is way more risks involved with Warner so maybe T2 would be a better immediate result.
I still think Capcom and Kadokawa would be a better investment, Capcom ip is very well loved and theres no denying just how good Sonys relationship is with From Software. Still it would be hilarious and amazing if Agent finally saw release as a result of buying T2

 

[akaFullmetal]

If Microsoft is able to buy Activision then it will be open season for anybody to purchase any studio. Sony would definitely want to make sure they weren't left out and purchasing take 2 would definitely put them on par with Activision sale.
I hate the consolidation but people keep cheering for this especially for Activision which will start this domino effect. People don't realize what this means when the flood gates get open.

 

[Tams]

Sad, I like Sony Bank. They're very competent and modern for a Japanese bank.

I can't help but see this as them becoming like the rest, even with Sony keeping a minority stake.

And given that the finance department is profitable; is a short term cash injection over long term profit for investment really the best idea?

On the other hand, if it means more money for other departments...

 

[Tams]

VR is a failed venture. It's fun sure, but it's going nowhere fast. Sony's blend of character focused games also do not work in VR because only First Person works in VR.

They should've picked those resources and invested elsewhere.

Sony have been in the headset market longer than probably anyone else. They had HMDs (literally the model name they choose) years ago. They also make the displays for many VR/glasses headsets.

 

[Baki]

If your T2 and going to sell your not just gonna take the sensible price your stock price would indicate, you probably use Sony to push the price up so MS/Tencent/Amazon/Meta pay more. You probably don't want to here it but if T2 is gonna be sold Sony can't afford the price the bidding war would create. The only reason MS price on activision wasn't blown up more is because the price was so big already it made everyone elses buttholes tighten and walk away from the table.

The company that wins the bidding war is the company that is willing to pay the most NOT the company that has the most money. T2 is already overvalued, so anyone trying to buy T2 to become a publisher (Tencent, Amazon) won’t pay significantly above their current price, as it won’t be worth it to them. Their models will show a limited ROI at current price (less than 800m profit but trades at 21B is insane). However, as Sony is a strategic buyer, they can be willing to pay a higher price as there’s additional value that only Sony unlock by having T2 defend existing console market share and expand their capabilities in mobile, movies and live services. In that scenario, Sony models wouldn’t look at the 800m profit T2 is currently making but they will look at the profit T2 could be making for Sony after leveraging all the synergies. That will allow them to pay a higher price.

 

[Baki]

Hmm Idk, Warner IP is huge, and giving Sony essentially the DC Universe is a much bigger opportunity than say T2 and GTA. But having said that there is way more risks involved with Warner so maybe T2 would be a better immediate result.
I still think Capcom and Kadokawa would be a better investment, Capcom ip is very well loved and theres no denying just how good Sonys relationship is with From Software. Still it would be hilarious and amazing if Agent finally saw release as a result of buying T2

WB has $45B net debt and lots of legacy revenue streams that are declining and need to be moved on. The debt means that the total cost of acquiring WB would be in the $80B range. I’m not sure Sony would want to do such a large acquisition which comes with a lot of debt and a lot of restructuring costs. They could clear the debt by selling some of the legacy cable channels etc. T2 would be much easier to integrate into Sony.

Edit: Dived through WBD finances to see what they look like compared to T2.

WBD likely cost: $85B (30% premium to todays share price + the assumption of $45B debt)

• $43B revenue
• $9B profit*
• 96M HBO subscribers

Most of their profit comes from their cable channels and TV stations.

T2 likely cost: $27B (40% premium)

• $5.3B revenue
• $757M profit
• GTA sold 180M copies, RDR2 sold 53M copies
• Also comes with Zynga

 

[Gojiira]

WB has $45B net debt and lots of legacy revenue streams that are declining and need to be moved on. The debt means that the total cost of acquiring WB would be in the $80B range. I’m not sure Sony would want to do such a large acquisition which comes with a lot of debt and a lot of restructuring costs. They could clear the debt by selling some of the legacy cable channels etc. T2 would be much easier to integrate into Sony.

Edit: Dived through WBD finances to see what they look like compared to T2.

WBD likely cost: $85B (30% premium to todays share price + the assumption of $45B debt)

• $43B revenue
• $9B profit*
• 96M HBO subscribers

Most of their profit comes from their cable channels and TV stations.

T2 likely cost: $27B (40% premium)

• $5.3B revenue
• $757M profit
• GTA sold 180M copies, RDR2 sold 53M copies
• Also comes with Zynga

Well thats a very thorough examination to be fair, I see what your saying.
Guess T2 really is the way to go if not Capcom etc

 

[DEAD ORIGINAL]

WB has $45B net debt and lots of legacy revenue streams that are declining and need to be moved on. The debt means that the total cost of acquiring WB would be in the $80B range. I’m not sure Sony would want to do such a large acquisition which comes with a lot of debt and a lot of restructuring costs. They could clear the debt by selling some of the legacy cable channels etc. T2 would be much easier to integrate into Sony.

Edit: Dived through WBD finances to see what they look like compared to T2.

WBD likely cost: $85B (30% premium to todays share price + the assumption of $45B debt)

• $43B revenue
• $9B profit*
• 96M HBO subscribers

Most of their profit comes from their cable channels and TV stations.

T2 likely cost: $27B (40% premium)

• $5.3B revenue
• $757M profit
• GTA sold 180M copies, RDR2 sold 53M copies
• Also comes with Zynga

I think Take Two would cost 50B

 

[Baki]

I think Take Two would cost 50B

Current EV is $20B. (EV = Market Cap + Debt - Cash on Hand)

In no world do I see someone paying 2.5X the current price for a company that does less than $1B in profit. That's a 66X P/E ratio and no one is stupid enough to pay that kind of premium.

 

[Varteras]

Sad, I like Sony Bank. They're very competent and modern for a Japanese bank.

I can't help but see this as them becoming like the rest, even with Sony keeping a minority stake.

And given that the finance department is profitable; is a short term cash injection over long term profit for investment really the best idea?

On the other hand, if it means more money for other departments...

Them being a bank is also a burden because they are required to maintain a certain level of cash reserves to cover their liabilities. A couple years ago, Sony had about $45 billion in cash-on-hand. Then it suddenly dropped to about $20 billion. The reason for this was because Sony had been reporting their banking reserves as cash-on-hand.

But the thing is, that wasn't actually $25 billion in cash they could freely use. It was the mandatory cash they needed to have to operate their bank. They changed how they reported their finances so that those bank reserves were no longer being listed as cash-on-hand.

Removing banking from their company frees up huge amounts of future cash from being tied up in bank reserves. Instead of tens of billions sitting around essentially as "oh shit" banking money, they can instead use it however they want as long as their bills and debt agreements are being paid.

 

[Mibu no ookami]

Current EV is $20B. (EV = Market Cap + Debt - Cash on Hand)

In no world do I see someone paying 2.5X the current price for a company that does less than $1B in profit. That's a 66X P/E ratio and no one is stupid enough to pay that kind of premium.

People honestly just say things... I'd love to see a breakdown of where he got 50 billion from.

I think T2 is just the more than obvious choice. More so than Capcom, Sega, CDPR, or Square Enix.

Puts them in the driver's seat in gaming in all areas for the future.

I think the element of FIFA and its importance to Sony and Europe kind of cement that. There really isn't a company out there more suited to take on the FIFA license, which might be a bit too pricey JUST for T2, but combined with a marketing deal for PlayStation at the world cup and across FIFA events... it makes sense.

I also think that no one gets more out of them with transmedia. Grand Theft Auto could with the right personnel involved be just as big as Fast and the Furious for Sony and that's gone on for almost 2 decades. Synergies with Sony Music would be big for both film and gaming.

Sony/Clap Hanz could also rescue Tiger Woods PGA Tour and that could help put Clap Hanz back on the map on mobile, console, pc, and VR.

Sony could take the profitability of T2 and T2 related business to well over a billion a year.

 

[Captain Toad]

only First Person works in VR.

Nothing could be further from the truth.

 

[Draxon Gamer]

This division and the previous iterations of it were a major part of what kept Sony alive when people were shouting fire from 2007-2011.

Sony really did go from a multimedia brand to relying heavily on PlayStation as part of their bottom-line. Yes, they still have other departments but before the recovery when the company struggling, PlayStation wasn't anywhere as important to the company as it has been since 2014.

 

[M1987]

I'm ok with Microsoft taking abk

They should make their own games with the studios they have instead of trying to buy them

 

[SlimeGooGoo]

.

 

[Mibu no ookami]

This division and the previous iterations of it were a major part of what kept Sony alive when people were shouting fire from 2007-2011.

Sony really did go from a multimedia brand to relying heavily on PlayStation as part of their bottom-line. Yes, they still have other departments but before the recovery when the company struggling, PlayStation wasn't anywhere as important to the company as it has been since 2014.

Sony is recognizing the importance of a strong 1st party more so than ever. This is what has me thinking that they'll pull the trigger on T2.

You see this year has been pretty dry for them. Their studios are hitting maturity, but game development becomes more and more complex. If Sony doesn't keep evolving as a 1st party, it'll be left to the whims of others and struggle due to limited 1st party output. Buying T2 cements them and its first party.

Visual Concepts/2K Sports alone would take Sony to a level they only dreamed of during the PS1 era with 989 Sports. There would also cerainly be some cost savings with 2K Sports and Sony San Diego sharing tech. Maybe to the point where they would feel comfortable going back to NHL 2K. Maybe you look at bringing Polyphony Digital into 2K Sports as well and monetizing Gran Turismo against F1, Nascar, FIA, e.t.c

 

[Mibu no ookami]

This.
VR is a meme. Only a handful of games work under VR.

Also, no company is going all out on VR.
When big games get VR support, it's usually something optional that the game was not designed around with or that you can play without (e.g. Resident Evil 8).

VR is only well suited for first person games that have the player sitting on their butts (e.g. racing games, on-rails shooters, fly sims)

VR could live by itself on just racing games and flight games. These types of games used to be extremely popular and their popularity died because of the lack of feeling to them.

VR doesn't need to be in every game, it just need to give people experiences they otherwise wouldn't be able to enjoy.

I think people have this misconception that VR has to replace flat screen gaming in order to be successful. It doesn't.

Wii Sports is the best selling Wii game. Mario Kart Wii is the second. Wii Sports resort is the 3rd. Wii Play and Wii Fit round in at 5 and 6.

There are a lot of avenues for VR to be successful. You can have casual games like DDR, Guitar Hero, Just Dance, Sing Star and you can have race sims and action flight games.

When PSVR2 drops in price just like PSVR1 did, but has a much more stellar lineup of experiences like GT7... it'll have its own success.

 

[SlimeGooGoo]

.

 

[Thirty7ven]

Nothing could be further from the truth.

Don’t see how non FP pov benefits from VR.

 

[bentanchorbolt]

Don’t see how non FP pov benefits from VR.

Lucky's Tale on the Meta Quest 2 is a 3rd person game and its fucking LIT in VR.

 

[bitbydeath]

Don’t see how non FP pov benefits from VR.

Astrobot was one of the most talked about VR games last gen. (I haven’t gotten into VR myself yet)

 

[Thirty7ven]

Astrobot was one of the most talked about VR games last gen.

Because it’s a great game. But is it really using VR to its potential? Don’t see how. VR’s potential has always been rooted in the first person pov, because it’s not about field of view as much as it is about the promise of being inside the character. Otherwise it’s just a big screen no?

 

[bitbydeath]

Because it’s a great game. But is it really using VR to its potential? Don’t see how. VR’s potential has always been rooted in the first person pov, because it’s not about field of view as much as it is about the promise of being inside the character. Otherwise it’s just a big screen no?

Haven’t tried it so I dunno, just saying it was incredibly popular.

 

[Mibu no ookami]

I agree with you.

Unfortunately most companies just want to cram VR where it doesn't make sense (probably because some company like Meta or equivalent invested some money in them)

Some unique experiences could be made with VR, but the game would have to be designed from the ground up exclusively for VR, or taking VR into account at every step of the development.

The Wii games were unique because motion controls weren't an optional accessory, they were included with the console.
That already gives developers a guarantee that you can design your game around motion controls and it will sell well.

With VR it's the opposite, you have to buy the thing separatedly. And it's as expensive as a PS5.
Hence why most devs don't bother or make it an optional feature with little consideration for it.

VR could be the new arcade. It could also be the evolution of things like PS Home and the Wii. There's a place for it for sure.

 

[Captain Toad]

Don’t see how non FP pov benefits from VR.

You haven't played Astrobot

 

[Tams]

Them being a bank is also a burden because they are required to maintain a certain level of cash reserves to cover their liabilities. A couple years ago, Sony had about $45 billion in cash-on-hand. Then it suddenly dropped to about $20 billion. The reason for this was because Sony had been reporting their banking reserves as cash-on-hand.

But the thing is, that wasn't actually $25 billion in cash they could freely use. It was the mandatory cash they needed to have to operate their bank. They changed how they reported their finances so that those bank reserves were no longer being listed as cash-on-hand.

Removing banking from their company frees up huge amounts of future cash from being tied up in bank reserves. Instead of tens of billions sitting around essentially as "oh shit" banking money, they can instead use it however they want as long as their bills and debt agreements are being paid.

It would, but a lot of that money will have to be covered by the buyers and if Sony keep a stake, then they'll still have to keep a proportional amount in cash for the same reason.

That'd reduce the price they'd get for the bank, at even institutions that can afford to cover that aren't going to do it for free.

 

[Varteras]

It would, but a lot of that money will have to be covered by the buyers and if Sony keep a stake, then they'll still have to keep a proportional amount in cash for the same reason.

That'd reduce the price they'd get for the bank, at even institutions that can afford to cover that aren't going to do it for free.

Not true. Minority shareholders are not responsible for the reserve requirements of a bank. The entity itself would be required to maintain that. So it would not be required that Sony help maintain those reserves.

I'm not talking about the money Sony may or may not get for the bank upon sale. That's a whole other conversation and still bound to land them a pretty big chunk of change.

I specifically called out future cash flow. Without the burden of maintaining bank reserves, Sony doesn't have to worry about billions in liquid assets being tied up by banking regulations.

 

[Alex Scott]

Do people honestly think the CMA or FTC would ever allow Sony to buy the publisher of grand theft auto and make them exclusive...?

CMA and EU has said COD going exclusive is not a big deal. They dropped the SLC concern.

 

[DEAD ORIGINAL]

They should make their own games with the studios they have instead of trying to buy them

Yeah they should make there own, but I think Playstation losing Cod is good, they would have to now make a decent FPS and Cod at the moment is in pretty bad shape right now.

 

[DenchDeckard]

CMA and EU has said COD going exclusive is not a big deal. They dropped the SLC concern.

Do you think cod is bigger than GTA?

Also, the cma and others believed there's no way MS would make it exclusive.

Sony would probably try to make GTA exclusive which no body would allow to happen for competition concerns.

 

[Alex Scott]

Do you think cod is bigger than GTA?

Also, the cma and others believed there's no way MS would make it exclusive.

Sony would probably try to make GTA exclusive which no body would allow to happen for competition concerns.

CoD is way bigger than GTA right now.
CMA and EU both said CoD going exclusive will not hurt PS.
This is what EU said regarding CoD going exclusive :

• Microsoft would have no incentive to refuse to distribute Activision's games to Sony, which is the leading distributor of console games worldwide,

including in the European Economic Area (‘EEA') where there are four Sony PlayStation consoles for every Microsoft Xbox console bought by gamers. Indeed,

Microsoft would have strong incentives to continue distributing Activision's games via a device as popular as Sony's PlayStation.

• Even if Microsoft did decide to withdraw Activision's games from the PlayStation, this would not significantly harm competition in the consoles market

I am not sure what CMA said if CoD goes exclusive but both said MS doesn't have the incentive.