Sony Should Buy Ubisoft and Here is Why

Sony’s been putting a lot of effort (read: money) into the PlayStation 3 product line with very little impact in the market. They’ve got this “10 year plan” but haven’t really executed a strong plan for their first two years of said plan. Sony’s plan seems to be “outlive the competition’s technology” while all of its competition stomps on their sales and market share with older and a bit “outdated” products.

Thus far there have been five spins of the PlayStation 3 hardware with price cuts only coming as a result of a “fire sale” of old hardware revisions. Sony, like many, believes the Nintendo Wii isn’t a direct competitor in their space; the outstanding sales of the Wii probably haven’t impacted the PlayStation 3 sales too much. The Xbox 360, however, has definitely cut them deep in all regions of sales.

Microsoft has built some unexpected momentum in Japan with Square-Enix making them a few console seller titles and the price cuts in Europe boosted sales over 200% all while the US continues to buy into the 360 hardware despite its most obvious red-ringing flaws. Microsoft has great partnerships with some fabulous companies, Bungie and Epic for instance, to build them exclusives that move even more 360 units.

Motorstorm is one of the PlayStation 3’s best games, selling over 3-million copies. While, as of January 2008, Halo 3 sold 8.1 million units for the Xbox 360. Now, Metal Gear Solid 4 has sold roughly 3.94 million copies since August of 2008 yet unsubstantiated rumors exist stating MGS4 could make its way to the 360. Combined awesome titles for the PlayStation 3 may not even exceed one of the competitors best selling products; where is the PS3 excitement?

Little Big Planet, Rachet and Clank, Resistance 2 and, someday, Massive Action Game (MAG) could produce some buzz around the PS3. By far, Little Big Planet has been the gold nugget Sony has been looking for and was published by Sony so they’re able to take full glory of this might-be console mover. What else do they have up their sleeve?

One or two blockbuster titles would compete well in a smaller market like last generation, but with Microsoft dragging in huge sales in all regions, Sony is going to need a real momentum killer. They’re already stating we’ll have no price cuts in 2008 leaving us asking, “why am I going to invest in a PlayStation 3?” Sony needs to figure out a long term battle plan and that involves blockbuster game titles which cannot be played on another console.

If Sony is willing to throw money out the window to keep the PlayStation 3 alive in this competitive market, why not spend it on their future? With a 10-year plan in place, that plan should involve picking up a company like Ubisoft. Ubisoft is a well respected public developer and publisher founded in 1986 and now consists of many well established smaller studios whom they’ve picked up along the way.

Ubisoft has some huge titles, Assassins Creed, Brothers in Arms, Ghost Recon, Splinter Cell, Rayman, Rainbow Six, Driver and has published many great titles for smaller studios. Imagine a Heroes of Might and Magic exclusive on the PlayStation 3 or a graphically intense exclusive Prince of Persia. Sony could steal titles away from the Wii such as Rayman and all his raving rabbids. Even 30% of these popular titles, being produced as exclusives for the PlayStation 3, could turn around this console.

Sure, Sony could pay for console exclusives on a handful of these great titles but, at this point, they’re going to pay out the nose to try to hold even a timed exclusive considering how many of these titles would arrive on the 360 in order for Ubisoft to recoup development costs for such a small PS3 audience.

Could Sony drive Ubisoft into the ground by limiting their exposure in the game industry to a single console? Indeed. There is always room for fatal errors when acquiring talent and executing them against your own 10-year plan. It would have to be a very aggressive attack with a very strong plan of execution in order to turn titles around on the PlayStation 3 in fast succession and with large PR hype.

Sony has shown they are willing to spend endless amounts of money all while turning their cheek to the obvious 360 domination. Why not take some of that money and re-invest it in the future of your 10-year plan by buying a company like Ubisoft before someone like EA does it first. With the huge market decline and the US bringing down the global economy, times may be ripe to grab a company and grow them to your own.

The real question would be, could Sony hold the talent at Ubisoft if they were to be purchased by such a large company with a sub-par sale standard console? Throw more money at the problem and bribe the talent to stick around for a few years and perhaps you’ve got a plan.

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Sony, Next Big Software Company?Sony, Next Big Software Company?

Every day we’re hearing of a company running through a round of layoffs or going out of business, it’s really not a happy time. Sony is not immune to the economic troubles either. Sony is talking restructuring and that involves a potential head count reduction of 16,000 jobs due to plant closings.

floppyThis leaves Sony with some hard decisions. Restructuring can mean drastic changes that effect all their product lines. The PlayStation 3 isn’t currently a shining example of high profit margins. The console needs time to reduce its overall cost, chip sizes and bring profitability. Is it in danger?

“Sony’s not in a position to halt all domestic production but it has to do something that drastic,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “If it announces plans to move production overseas while keeping only planning and development functions in Japan, that would be a positive.” (gamestooge)

The yen is losing value in our global economy making it more difficult to export the product and build any type of profitability plan. “A source said this month the company will likely suffer an annual operating loss of about $1.1 billion, its first such loss in 14 years” (news.yahoo.com) All this noise is making CEO Howard Stringer contemplate Sony’s involvement as a “software only” company, making us recall the changes at SEGA to this same result.

The Financial Times reported Sony will unveil details of its restructuring steps on Wednesday or Thursday. It said Chief Executive Howard Stringer was meeting with resistance from some executives to shifting the company’s focus to software from hardware and cutting jobs in Japan. (news.yahoo.com)

Is this just a case of a fearful executive trying to lay plans for a more stable future? Software is easier to develop, pays for itself quickly and becomes pure profit as it ages. Hardware requires constant upkeep at manufacturing facilities, chip reductions and a boat load of quality planning for first shipment. Would Sony go full software?

Let’s face it, Sony isn’t SEGA, they’ve been developing hardware for consumers since anyone can remember and they’ve been doing it with quality and market penetration. It seems absurd to think they’d forgo hardware designs in replacement of a full software solution to the problem. In addition, Sony has already invested a large amount of cash into seeing PS3 through it’s 10-year plan and letting that die now is realizing a huge loss on investment.

If Sony pushes through the economic and maintenance course, the PS3 will become highly profitable, much like the PS2 last generation (with a slower ramp up for sales). Even if they break even after ten years it seems a lot better than throwing all the effort away.

Perhaps Howard Stringer is talking “software” for the next generation home console? You think Sony will create a PlayStation 4?

Episode 736: Live On YouTubeEpisode 736: Live On YouTube

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Yes, we recorded this episode live on YouTube. We spoke about Minecraft dropping VR support next year, Ubisoft Montpellier disbanded, Obsidian saying choices both big and small will matter in Avowed, ColdRidge – a game about cowboys doing 4x-style exploration — hits release, and Yakuza Kiwami has sold far over studio director’s expectations on Switch.

The news includes:

  • Metaphor: ReFantazio director Katsura Hashino is already working on a new game
  • Sony wanted to lock Crimson Desert into a timed PlayStation exclusivity deal

Let us know if you watched the video!

The post Episode 736: Live On YouTube first appeared on Gaming Podcast.

Xbox 360 Kicking PlayStation 3 Two-to-One In EuropeXbox 360 Kicking PlayStation 3 Two-to-One In Europe

Xbox 360‘s been seeing success in Europe, but nothing compares to the success they’ve seen since the recent price cuts. Sales for the 360 are up 214% which is pushing them past the two-to-one sales ratio against the more expensive PlayStation 3.

We’re assuming this 214% increase is due to the cheaper price combined with a large selection of great game titles. No doubt Microsoft is happy to hear the news that their price cut went over so well in all countries. Unfortunately, we’re not so sure a straight PlayStation 3 price cut would drastically change the sales ratio because the PS3 still has very few exciting games when compared to the Xbox 360 which has a year head start on its bigger competitor.

Microsoft’s new to console success, being the odd duck last generation. They’ve learned a lot and has kicked up the competitive nature of console gaming, giving PlayStation 3 a run for its money. Competition is wonderful and is probably making Sony’s exec’s wonder what tactic to chooes next.

Of course, the Wii is a sales rampage and has been for a few years now. At this point, it’s not even fair to compare the two. However, we’re sure Microsoft will eventually come out and boast their recent European victories as sales figures solidify and become “official.”

Can Sony put up any Resistance to this market domination?

Read on for more press release information from ChartTrack.

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