Original Article By Tony Owusu At TheStreet.com

Sony Group  (SNE) – Get Sony Corp. Report appears to be the big loser from Microsoft’s  (MSFT) – Get Microsoft Corporation Report $68.7 billion proposed acquisition of video game studio Activision as Microsoft now controls some of the biggest games on the market. 

Activision’s portfolio includes heavy hitters like Call of Duty, Guitar Hero, Overwatch, Candy Crush and Warcraft, and that library could help Microsoft catch up to Sony’s dominant position in video games.

The console wars between Microsoft’s Xbox and Sony’s PlayStation gaming consoles have been going on for more than 20 years now following the debut of the original Xbox in 2001.

The PS5 and Xbox Series X|S have both been on sale since November 2020. In mid-December the PS5 had total global sales of 15.2 million consoles compared to 9.8 million for Xbox, according to VgChartz

Microsoft’s Big Push Into Video Games

Microsoft is making an even bigger push into gaming with its acquisition of Activision, with the nearly $70 billion price tag being Microsoft’s biggest acquisition ever by far (second place is the company’s 2016 acquisition of social media platform LinkedIn for $26 billion).

“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,” said Microsoft CEO Satya Nadella. 

Microsoft’s Game Pass subscription service has been a winner for the company. The service has over 25 million subscribers. 

Now the company is adding in Activision, with its 400 million global monthly active players.

Sony Will Be Forced to Respond

Sony is in a tough position thanks to the success of Game Pass, and the company could be forced to follow suit. But a subscription service offering unlimited games at a flat fee will most likely eat into the company’s video game sales. 

Sony’s exclusive game library, games that appear only on the PS5, have long been seen as superior to Microsoft’s offerings, which has contributed to Sony’s domination in the console wars. 

Sony has plans to launch a next generation virtual reality headset, but to keep up with Microsoft, the company may have to turn to acquisitions, experts say.

“Sony may come under pressure to do more M&A,” Jefferies analyst Atul Goyal wrote in a note, according to Reuters. “If there are no regulatory bottlenecks, then Microsoft may go after another target in the not too distant future.”

Sony shares were down another 3.3% Wednesday morning after dropping double digits in Tuesday’s session.