Sony lost the Spyro and Crash IP to Activision and this is something that is well documented. PlayStation All-Stars Battle Royale contains the best PlayStation characters but these two can’t be in the game.
Crash Bandicoot was one of the biggest selling PlayStation franchises back in the PS1 days, and it is definitely an iconic PlayStation characters but putting them in the game would require permission from Activison.
Sony Santa Monica official Twitter account tweeted that it’s 100% not possible to see Spyro and Crash in PlayStation All-Stars Battle Royale.
— Sony Santa Monica (@SonySantaMonica) July 26, 2013
So it looks like Sony isn’t interested in licensing the characters from Activision since it wouldn’t make sense to put them in the game.