Microsoft Says Activision Blizzard Acquisition is Not Anti-Competitive in Response to Sony - NewsWilliam D'Angelo , posted on 10 August 2022 / 4,357 Views
Sony recently spoke with Brazil's regulatory body about Microsoft's acquisition of Activision Blizzard and said Call of Duty is an important IP for PlayStation and it is a franchise that "influences users' console choice."
Sony essentially claimed the Activision Blizzard acquisition is anti-competitive as it could influence people to switch from PlayStation to Xbox and said the Call of Duty series is on its own level of popularity and it is has been the "overwhelmingly the best-selling game" for its genre.
Microsoft has now responded to Sony's claims, according to a user on ResetEra who translated Microsoft's response.
"Not surprisingly, Sony was the only third party to convey public opinion materially different from MS/ABK and the third parties regarding the competitive analysis of the transaction," reads Microsoft's response.
Microsoft says that Sony does not want to see Call of Duty available on Xbox Game Pass on day one as Sony doesn't want to compete with the service.
"In short, Sony is not resigned to having to compete with Microsoft's subscription service," states Microsoft. "Sony's public outcry on subscription games and the company's response are clear: Sony doesn't want attractive subscription services to threaten its dominance in the market for digital distribution of console games. In other words, Sony rails against the introduction of new monetization models capable of challenging its business model."
Microsoft in response to Sony's claim that Call of Duty is its own separate market from all other categories said, "Sony is limited to commenting on Call of Duty's brand strength and loyalty and engagement. However, claiming that Call of Duty has a loyal following is a premise from which the conclusion that the game is a 'category of games in itself; does not follow.
"The PlayStation itself has a foundation established by players loyal to the brand. This finding, however, does not lead to the conclusion that the PlayStation – or any branded product with loyal consumers – is a separate market from all other consoles. Extrapolating from such a finding, the extreme conclusion that Call of Duty is a 'game category in itself' is simply unjustifiable under any quantitative or qualitative analysis."
Microsoft showed data that only two Activision Blizzard games ranked in the top 20 best-selling console games of 2021 that included notable franchises from third-party developers and exclusives from PlayStation and Nintendo.
This means Microsoft believes that Call of Duty is just one of a wide range of best-selling games that includes multiple titles that are not even available on Xbox consoles.
Sony in its initial response mentioned that over the past five years, Xbox Game Pass has grown to capture around 60 to 70 percent of the worldwide subscription services market. Sony believes it would take "several years" for a competitor to create a rival for Xbox Game Pass, even with substantial investments.
Microsoft says Sony contradicted itself as they said Xbox Game Pass has grown over the past five years to be a success, which is without having any Activision Blizzard titles available on the service. This means that having titles like Call of Duty would not be essential for a competitor to become as popular.
Microsoft says that the Nintendo Switch despite not having Call of Duty titles has been a huge success for Nintendo.
The reasons discussed by Microsoft means they feel Sony is being apprehensive about the increased competition once the Activision Blizzard deal closes, rather than a worry about Microsoft becoming anti-competitive.
Microsoft goes on to list five reasons against Sony's claims that adding Activision Blizzard titles to Xbox Game Pass would lead to an unattainable lead in subscription services for Microsoft.
- it is not part of Microsoft's strategy to remove content from players. Call of Duty will still be on PlayStation as a buy-to-play title.
- The data shows that players see subscription services like Xbox Game Pass as just one of many ways to pay to play games.
- Sony's claim that Xbox Game Pass could lead to an unattainable lead ignores "the dynamic nature of these services" and the "the relevant presence of Sony itself in this space. "
- Reason four has been totally redacted.
- There is strong competition, rival game distribution channels, including console stores and subscription services, that already have access to Activision Blizzard games, including exclusive content not available to Microsoft consumers.
Microsoft added that the "New PlayStation Plus" is considered a rival to Xbox Game Pass in the industry and "the use of exclusive arrangements has been at the heart of Sony's strategy to strengthen its presence in the gaming industry."
Along with its first-party lineup, Sony has entered agreements with third-party publishers to ensure some games release as exclusives at launch on PlayStation consoles.
Microsoft sees Sony's claims as a "fear regarding an innovative business model that offers high quality content at low costs to players, threatening a leadership that was forged from a device-centric strategy and focused on exclusivity throughout of years."
Microsoft added that not releasing Activision Blizzard games on rival console stores would not be profitable for Microsoft as it would only be profitable if enough people who play Activision Blizzard games would join the Xbox console ecosystem.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.