Sony is facing a significant breach of confidential information as sensitive details about its PlayStation business were inadvertently disclosed during the ongoing FTC v. Microsoft hearing. The disclosed document, supplied by PlayStation boss Jim Ryan, contained redacted information about publisher margins, Call of Duty revenues, and game development costs. Although attempts were made to conceal the information, some of the redactions were still visible, leading to widespread exposure.
Reporters and competitors seized the opportunity and quickly downloaded the documents before they were removed from the public domain. The leaked information sheds light on the cost of developing popular games, such as Horizon Forbidden West, which reportedly took $212 million and five years to create with a team of 300 employees. Similarly, The Last of Us Part II had a development cost of $220 million and involved approximately 200 employees.
Aside from development costs, the document also revealed intriguing insights about the popularity and revenue generated by Call of Duty. According to the disclosed information, approximately 14 million users spent 30% or more of their gaming time on Call of Duty in 2021. Over 6 million users dedicated more than 70% of their gaming time to the franchise, while around 1 million users spent 100% of their gaming hours playing Call of Duty. On average, Call of Duty players spent 116 hours per year on the game, while those who dedicated over 70% of their time spent an average of 296 hours on the franchise.
Sony provided this information as evidence that its revenues would be significantly affected if Call of Duty became an Xbox exclusive. The fear of potential exclusivity or sabotage by Microsoft has prompted Sony to repeatedly voice concerns to regulators. The leaked document suggests that Call of Duty generated over $800 million in revenue for PlayStation in the United States alone during 2021, and the estimated global revenue for the game is $1.5 billion. When factoring in accessories, subscriptions, and other revenue streams, the average annual revenue for Call of Duty appears to be over $13.9 billion (or $15.9 billion, it’s hard to figure out if this number is 3 or 5).
The document also hinted at Sony’s profit-sharing arrangement with third-party publishers like Activision. Although the details are not entirely clear, it suggests a typical margin of approximately 10%.
Furthermore, the leaked document revealed that Sony’s exclusive marketing deal with Activision for Call of Duty will come to an end with the release of a game scheduled for late 2023.
Did Jim Ryan lie to regulators?
In a separate revelation, Sony Interactive Entertainment President and CEO Jim Ryan’s statements to the UK regulator, the Competition and Markets Authority (CMA), have been called into question. Ryan previously expressed concerns that releasing a degraded version of Call of Duty on PlayStation, if Microsoft’s acquisition of Activision Blizzard were approved, would severely damage Sony’s reputation and cause gamers to abandon the platform. However, a newly revealed email from Ryan suggested that he was not overly concerned about Call of Duty becoming an Xbox exclusive franchise shortly after Microsoft’s buyout announcement. The email indicated that Ryan believed Call of Duty would continue to be available on PlayStation for years to come.
These revelations have sparked intense speculation and debate about Sony’s future plans and relationship with Microsoft. As the legal proceedings unfold, the gaming industry eagerly awaits the resolution of the FTC v. Microsoft case and its potential impact on the future of gaming.