Sony recently announced that it has purchased Bungie, the game development studio responsible for first-person shooter games Destiny and Halo. This acquisition is seismic news for the gaming industry, made stranger by Bungie’s history. In the early- to mid-2000s, Bungie helped put Microsoft’s Xbox console on the map with their phenomenal Halo franchise.
Now, Sony owns the company that once made Xbox a household name. Sony’s decision to purchase Bungie came only weeks after Microsoft moved to scoop up Activision Blizzard, the beleaguered company behind blockbuster franchises like Call of Duty and World of Warcraft. Part of this deal will hand Microsoft the reins to two series that defined the early days of the Playstation: Crash Bandicoot and Spyro the Dragon.
Longtime PlayStation and Xbox fans are likely perplexed by the latest twists in the ongoing console wars, but none of this is new for Microsoft or Sony. These are just the latest moves in a battle that stretches back decades. Here’s what you need to know about the state of Sony and Microsoft’s ongoing war for video game supremacy.
Back in the 2000s…
The Xbox 360 hit store shelves in 2005, beating the PlayStation 3 to market by around a year. The PS3 struggled out of the gate due to its high price tag and confusing development infrastructure. The 360, in contrast, was easy for third-party designers to develop games on.
Many fans consider the late 2000s to be Microsoft’s golden era. Blockbuster exclusive titles like Halo 3, Gears of War, and Forza catapulted the 360 to millions of sales, planting the perception that Microsoft was winning the console wars. Then, Sony landed on a winning formula that shifted the tide back in its favor.
Before the current console generation started in late 2020, Sony busied itself by scooping up a massive stable of development talent. Companies like Insomniac, Santa Monica Studios, Naughty Dog, and Sucker Punch Productions all work under the PlayStation Studios umbrella. This initiative has paid dividends for Sony in recent years.
Naughty Dog proved invaluable to Sony during the PlayStation 3’s lifetime. When internet memes poked fun at the PS3’s perceived lack of games, Naughty Dog impressed critics by releasing not one but two generation-defining blockbusters. Uncharted hit stores in 2007 and laid the foundation for a new breed of cinematic action-adventure games.
The Last of Us, meanwhile, landed near the end of the PS3’s lifespan in 2013. It brought heart-wrenching storytelling to the survival-horror genre, as well as unparalleled voice performances from its star-studded main cast. These two series illustrated Sony’s path forward for the 2010s–engrossing single-player exclusives with top-notch production values.
By the end of the two consoles’ sales periods, the PS3 finally clawed back a marginal victory over the 360. Sony’s machine sold 87.4 million units, compared to Microsoft’s 84 million Xbox 360s sold by 2014. The PS3’s impressive final-stretch sprint likely had more to do with The Last of Us than any other single game.
PlayStation 4 Exclusives Stonewall Xbox
Sony doubled down on its internal development studios after landing on a winning formula with Naughty Dog’s stellar PS3 outings. The PlayStation 4 received exclusive heavy-hitters like Horizon: Zero Dawn, Spider-Man, and God of War. These sprawling single-player games shared considerable DNA with The Last of Us–high production values, a focus on storytelling, and single-player action instead of multiplayer battles.
In 2019, Sony purchased Insomniac Games, the studio that makes the Ratchet and Clank and Spider-Man series. The company was doubling down on its commitment to first-party titles.
Microsoft stumbled early with the Xbox One by introducing it in a disastrous E3 press conference. The initial reveal of the new console focused on its multimedia capabilities and the Kinect motion-sensor camera instead of on video games. This negative PR, combined with a lackluster slate of exclusive games, set the Xbox One on the back foot throughout the ensuing console generation.
This false start, coupled with its unparalleled exclusives, helped the PlayStation 4 become one of the best-selling consoles of all time. Some estimates place the PS4’s lifetime sales at 115.79 million units, making it the clear winner of its console generation. The Xbox One, by comparison, only moved 50.19 million units, slipping well under the 360’s sales performance.
Microsoft Buys Bethesda
In September 2020, Microsoft kicked off the current-generation spending war by purchasing ZeniMax, the parent company of Bethesda Softworks. Bethesda is best-known in gaming circles for publishing the critically acclaimed Fallout and Elder Scrolls franchises. Their latest mainline entries, Fallout 4 and The Elder Scrolls V: Skyrim, are two of the most popular RPGs ever made.
Microsoft wants to change the narrative of this console generation by investing in its in-house content. Elder Scrolls fans itching to play the latest release might not have the option of running the game on PlayStation!
Sony responded in kind the following year by purchasing a slew of smaller development companies to round out the PlayStation Studios stable.
Sony Spending Spree
In 2021, Sony added several companies to its PlayStation Studios lineup. In early September, they bought Firesprite, the Liverpool-based developer of various PlayStation VR titles. Later that month, Sony added Bluepoint Studios to its growing roster of in-house developers. Players know Bluepoint for their work on remakes like Demon’s Souls and Shadow of the Colossus.
Then, in December, Sony acquired Valkyrie Entertainment, a support studio that helped Santa Monica Games create 2018’s God of War.
Microsoft hadn’t finished bulking out its internal development studio, either. In early 2022, both companies revealed some of their biggest purchases yet.
Microsoft Buys Activision Blizzard
In January 2022, Microsoft announced its plans to purchase Activision Blizzard. The Call of Duty developer has suffered a brutal PR nightmare in the second half of 2021 and early 2022. Some current and former employees accused several top staffers with Activision Blizzard of inappropriate conduct. These accusations also implicated the organization’s CEO, Bobby Kotick.
The behind-the-scenes scandal kicked off a public firestorm, with workers threatening to walk out over what they called unacceptable conditions. Activision poured fuel on the fire when it laid off a swath of QA testers working for Raven Software, prompting the other testers to unionize. The ongoing scandal tanked Activision’s share prices, worrying investors and leaving the company vulnerable to a buyout.
Enter Xbox Game Studios, a company with cash to spare and a desperate need for top-notch exclusive games. Microsoft reportedly plans to pay an eye-watering $70 billion for Activision, which will bring big-name titles like Overwatch and Candy Crush under the Xbox umbrella. Notably, Microsoft confirmed that it has no plans to replace Activision’s controversial CEO.
“Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company´s culture and accelerate business growth,” reads an official statement from Microsoft.
The sale will give Microsoft ownership of Activision and its subsidiaries, including mobile-game maker King and fan-favorite developer Blizzard. “We’re investing deeply in world-class content, community, and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive, and accessible to all,” states Microsoft CEO Satya Nadella.
Sony Purchases Bungie
In a bizarre twist of fate, Sony was in talks to purchase Destiny developer Bungie for $3.6 billion long before news of Microsoft’s Activision acquisition became public. Ironically, Bungie entered a “nightmare” publishing agreement with Activision in 2010 and wriggled free in 2019. Less than three years later, each company belongs to the two biggest game publishers in the industry.
By acquiring Bungie, Sony has cemented its commitment to bringing the PlayStation brand to multiple platforms. Microsoft has made unbelievable profits on its GamePass service, which allows PC gamers and Xbox users to access a wide variety of games for a monthly subscription.
PlayStation has a similar service, called PlayStation Now, but hasn’t enjoyed the runaway success that GamePass has. By adding Destiny to its stable of in-house games, Sony has confirmed its commitment to battle Microsoft in both the console wars and in the world of subscription services and streaming.
Bungie and Sony confirmed that Destiny won’t become a PlayStation exclusive, nor will the acquisition impact cross-platform play. But, if Sony isn’t buying Destiny to make it an exclusive, then why is it spending nearly $4 billion on Bungie?
Console Agnostic Console Wars
The console wars aren’t just about consoles anymore. Sony and Microsoft are squaring off in a content war, just like Disney and Netflix in the streaming space. Microsoft’s GamePass is its killer app, a service that rakes in millions of dollars every month from players on PCs and Xboxes alike.
Sony understands the value of selling games on platforms beyond the PlayStation. PC versions of PlayStation Studios games like God of War and Death Stranding illustrate the company’s desire to branch out. Gaming publications have reported that Sony plans to overhaul its streaming service, PlayStation Now, to make it clear competition for Microsoft’s GamePass.
In either case, a lot of money is flying around in the gaming industry right now. Sony and Microsoft are committed to a colossal content war in the years to come. Activision and Bungie are probably just the beginning–like William Shakespeare said, the past is prologue.