SONY - Sony CEO downplays risk of cloud gaming on console market - FT

2023-06-04 11:15:09 ET

Sony's ( NYSE: SONY ) CEO downplayed the risk that cloud gaming will have on the videogame console market, saying that cloud gaming is still technically "very tricky."

"I think cloud itself is an amazing business model, but when it comes to games, the technical difficulties are high," Sony CEO Kenichiro Yoshida said in an interview with the Financial Times on Saturday. "So there will be challenges to cloud gaming, but we want to take on those challenges."

The Sony ( SONY ) CEO's comments come as Microsoft's ( NASDAQ: MSFT ) planned $69 billion takeover of videogame juggernaut Activision ( NASDAQ: ATVI ) hangs in the balance as the UK's antitrust authority has sued to block it, citing concerns about the cloud market.

Sony ( SONY ), which makes the PlayStation videogame console, has been a critic of the Activision ( ATVI ) deal since it was announced in January 2022, claiming that Microsoft would likely limit Activision's popular games such as "Call of Duty" to its own Xbox cloud gaming service.

Sony's Yoshida declined to comment to the FT on the impact he sees from the Activision ( ATVI ) deal, citing ongoing regulatory reviews.

Microsoft ( MSFT ) has proposed a 10-year deal licensing Call of Duty to Sony, an offer similar to deals that Microsoft struck with Nintendo ( OTCPK:NTDOY ), makers of the third key rival game console, the Switch, and with Nvidia ( NVDA )), which runs the GeForce Now game streaming service.

Yoshida also highlighted the cost inefficiencies of cloud gaming as servers are idle for most of the day as gamers mainly play during the evening, or "dark time."

"The dark time for cloud gaming has been an issue for Microsoft as well as Google, but it was meaningful that we were able to use those (quieter) hours for AI learning," Yoshida told the FT.

Yoshida's comments on cloud gaming come as Microsoft (NASDAQ: MSFT ) President Brad Smith is set to meet with UK Chancellor Jeremy Hunt this week to discuss his concern about the UK antitrust regulator's decision to block the Activision ( ATVI ) deal, according to a Bloomberg report on Friday. Smith is scheduled to hold discussions with Hunt as well as officials from the UK's Competition and Markets Authority.

A UK judge held a hearing on Tuesday and set a trial for Microsoft's appeal of the UK decision for July 24 , well before the CMA's request for a date in late-September or October. The hearing falls after the July 18 termination date for the mega videogame deal, where the parties can walk, extend, or renegotiate the deal.

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