Sony: Microsoft's Call of Duty 'Offer Will Irreparably Harm Competition and Innovation' - News
by William D'Angelo , posted on 10 March 2023 / 23,041 Views
Sony has released a statement following the UK regulators, the Competition and Markets Authority (CMA), recently published report on Microsoft's Activision Blizzard acquisition that contained Sony Interactive Entertainment's response that had multiple redactions.
Sony says Microsoft's offer for future Call of Duty releases on PlayStation was reacted and claims the offer would "irreparably harm competition" in the video game industry, as well as hurt innovation.
"Redacted versions of the observations filed by SIE and Microsoft on the CMA’s remedies notice were made public this week," said Sony in a statement sent to GamesIndustry.
"Information regarding the terms of an offer made by Microsoft to provide future Call of Duty releases on PlayStation was redacted at the request of Microsoft. We believe their current offer will irreparably harm competition and innovation in the industry."
Sony in the published report stated Microsoft's proposal of a 10 year legally binding deal to keep Call of Duty on PlayStation is not enough to protect PlayStation's access to the Call of Duty franchise.
"In the intervening period, Microsoft has not shown any real commitment to reaching a negotiated outcome," reads Sony's response in the report. "They have dragged their feet, engaged only when they sensed the regulatory outlook darkening, and favored negotiating with the media over engaging SIE (Sony)."
Sony in the report also claimed that Microsoft's proposal does not offer a commitment to parity that is legally enforceable.
"Microsoft's proposal does not offer a clear commitment to parity that is legally hard-edged and enforceable, despite its repeated public utterances to the contrary," said Sony. "Under its proposal, Microsoft is obliged to use [redacted] parity between PlayStation and Xbox and their respective MGS (Microsoft Game Studios) services. This is a vague and weak commitment that does not give SIE the assurance that Call of Duty will remain on PlayStation on terms that would maintain PlayStation's competitiveness."
Sony has also claimed Microsoft has multiple ways it "could withhold or degrade access [which] would be extremely difficult to monitor and police."
"If Microsoft failed to comply with its commitment, it would likely only risk paying a fine (possibly many years later)," said Sony. "But rivals' access to Call of Duty would be immediately foreclosed, irreparably damaging their ability to compete and ultimately harming consumers."
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.
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Actually I think the opposite is true. It will increase competition and Sony will likely have to become more innovative.
You know what really has hurt competition? Sony hatting timed exclusivity on like 8 AAA exclusives over the last 5 years or so, plus quite a few AA and A/indie timed exclusives. Sony hatting 1 year exclusive content in games like Hogwarts Legacy, and you guessed it, CoD games ever since Xbox lost the marketing rights to it in 2015. Xbox keeping CoD multiplat for a guaranteed 10 years, including 2 brand new platforms it wasn't already on (Nintendo and GeForce Now), that is what we call the opposite of hurting competition.
I personally was somewhat against this merger, but honestly since Sony turned into this unbearable crybaby over it, I hope it goes through. It'd be even more satisfying if Nintendo got MS' COD offer and left Sony with nothing.
This is getting straight up silly now...
"If Microsoft failed to comply with its commitment, it would likely only risk paying a fine (possibly many years later)" what a desperate argument. This basically says "if MS does illegals thing industry may suffer" how pathetic is this, it's literal fear mongering.
Hey Sony, there's nothing stopping you from creating your own military shooter to rival CoD. In fact, this takeover would give you more motivation to do exactly that, so it could increase competition! Stop being lazy and try to actually compete!
You tried to compete when Halo was a hit by making Killzone. The first game was rubbish (I'm honestly surprised it got a sequel it was so bad!), but Killzone 2 and 3 were both fantastic games. So why not try again with an FPS game?
The thing is, among the ridiculous stuff Sony and Jim Ryan said was actually the claim that they are too bad game develop... unable to make a game like COD.
Nintendo once was in the situation that 3rd-parties left the platform because of a competitor made better offers (not directly buying, but still). That hurt them especially in an area they hadn't their own game: fighting. Yet Nintendo set out to make their own little fighter game, called Smash Bros. Which is now the biggest fighter franchise in the genre.
I think the company that made Last of Us, God of War and Horizon... should be able to do that too. Especially since they bought Bungie, a company with experience in the genre.
It's a bit like saying GTA who needs it just make your own, what Pemalite said is true he just forgot to insert successful in there.
It is hard to create successful games even harder to create successful franchises many times harder still to get to the level of top tier selling series like COD and all most impossible to move into their backyard and then take on and compete with those mega series.
No just pointing out that its easier said than done we aren't talking about competing with a 3 million seller these are cross gen mega sellers with tens of millions of ingrained fans and are rare and they dominate the market to such an extent that, here we have gaming's biggest take over and the battlefield is centred on COD rather than ABK with all its other IPs, so to all those who say just make one
my answer is count the number of games that reach those sales/ revenue heights and stay there then compare that number to the number of games made it should tell you something.
Yeah, ebing successful in business is hard, especially in creative areas like movies and games. There never is a guarantee for success and no easy formula. Still you can be successful, always. Once seemingly unbeatable franchises came tumbling down. And new franchises replace them. And that includes CoD, which came into a market already full of shooters and pushed once successful franchises out. the same can and at some point will happen to CoD.
I made the example for Smash Bros, which became the most successful fighter, even a lot of fighter franchises were already established.
Exactly. They own Bungie now so if any studio could make a great military shooter, it's them. Not to mention, they have a plethora of great shooter franchises they could bring back.
Yes and if you bought every single one back and magically didn't oversaturate the market you might have them all together sell half of what COD sells in a year.
That's not really as much of a bad thing as you make it seem. Sony doesn't need to sell as much as CoD to have a successful shooter. Selling half of what CoD does yearly would be great for anyone, especially if it's exclusive to PS.
Look I hear you I would love to see Sony bring back shooters, Resistance and Killzone especially the second of each series were great.
I don't play a lot of MP but they were my favourite MP and online co op games.
My reply was not about the benefits of more shooters I agree with you about them being good additions and in my eyes anyway preferable to just COD. It was in response to talk making it sound like doing so would cover any potential COD lose, they aren't going to replace COD sales and revenue with those games even my half the COD sales figure was a fantasy were you had 4 or more shooter games coming out yearly and all selling well, in the end that COD revenue is what Sony and MS are fighting over one to keep as much as they can the other to justify the purchase price. the biggest reason why we don't have games like Killzone today is Roi with Guerrilla's Horizon selling 7 times what Killzone 3 did .
The scenario I outlaid is pie in the sky and no way would 4 shooters every year work just on ROI and then then saturation needs to be taken into account .
The fact is Sony isn't going to lose COD if MS buys ABK not in the short term anyway, MS deciding to move away from consoles to the cloud is what I would fear if I was Sony and I think that it is Sony's fear but they aren't saying so publicly probably because they saw things as being much of the same as now only running on AZURE but the ABK take over caught them out and changed that thinking .
Since Microsoft has talked about bringing out Call of Duty every two years, they'll likely be more than happy to line up a Quake, or a Doom, or a Halo, or a Prey, or a Gears, or some other shooter in the off year. The fact that Microsoft owns so many shooter franchises (some of which are multiplatform) positions them uniquely to benefit from Call of Duty going to a two-year cadence, giving the Call of Duty teams more time, and allowing other Activision teams to explore their rich back-catalogue. If that's what happens, it's a win for everyone IMO.
Another day of Jim the fucking bitch. farts
I don't (nor pretend to) know what's going on behind closed doors. But I do know what this LOOKS like to gamers, and what it LOOKS like is one company (MS) extending an olive branch and the other (Sony) spitting right in their face--which is odd, because since the launch of the PS4, Sony has done such a tremendous job with PR.
It very well could be, but we don't know for sure. Either way, I was just talking about how it LOOKS. Most people look at this and see one company being nice to the other, and the other company being jerks (and that's putting it softly).
Sony has been so, so great with PR for so many years now, that all of this is really shocking to witness. It kind of makes me wonder who's pulling the strings. Sony of Japan? Seems like whoever it is, they either don't care, or don't understand what's happening, and again... that's very odd for them. They're usually very good at this sort of thing.
I agree that it’s uncharacteristic for Sony. They have sat by for years and watched MSFT buy studio after studio, and then a publisher with 8-9 studios within it. They haven’t said a word about it, and they didn’t even seem to try to answer with their own slew of major acquisitions (stupidly, imo). This potential acquisition has clearly concerned and shaken them.
The thing that confuses me is Sony’s end game. While likely only bc of ABK upper management’s greed, Sony have severely pissed off ABK with this fight. If the deal does get blocked, I don’t see any scenario where ABK doesn't give preferred treatment to MSFT and try to give PS the shaft in perpetuity. MSFT will almost undoubtedly regain the marketing rights and will likely be given a ton of exclusive content.
Jim Ryan is a dick , but the thing is everything offered by MS is only because of them buying ABK and not needed by Sony otherwise , under MS a ten year deal vs none under Activision sounds good ,Sony's response with 80% of the console COD market we don't need to have a ten year contract with Activision same with there graphic parity offer, on MS's day one PS Plus offer Sony's response, PS Plus isn't Game Pass, so we'll take Activision and millions of day one COD sales at rrp.
lastly Sony having turned around it's shooters weakness from the PS360 days and seeing its marketing investments in COD having paid off for the Platform can see those gains being eroding away slowly and not this gen or the next till in 10 odd years the time comes when MS uses COD and the other IP to underpin their move away from console to the cloud.
Sometimes you need to stand your ground even if it means losing in the court of public opinion knowing it is easy for someone with less to lose to offer the world especially when it's mostly not theirs, in this case MS gets access to a larger player base for their own gamers helping ease any match making or other problems that come with a smaller base with the positive of being seen as open. In Sony's case they get to help ease MS's problem or face being labelled obstructionist .
You know what isnt good for the industry, locking content out of other versions.
Sony’s desperate lies are getting more pathetic every day.
Immoral lies should have consequences. I will be buying Sony’s 1st party games for the next year, as 2nd hand game purchases so Sony doesn’t get any money from me.
They have been a disgrace.
I wonder does this also goes for Sony and Bungie. Everything they state could also be the case for any works done by Bungie as well. Interesting that they would continue to go down this line of attack as the same claims can and would be made against them as well.
Sony’s last two arguments have come off as somewhat odd and/or disingenuous, but you’re comparing apples to oranges, here. Bungie’s (actual) worth was around $2-2.5bil; ABK, even with the horrible state of the stock market, still has a market cap of around $61bil. Also, Destiny’s player base is a small fraction of that of CoD alone—let alone all of ABK’s other massively popular games. It’s very obvious why this ABK deal has garnered so much attention and scrutiny—bc it’s effin huge, representing one of the largest acquisitions in history.
How exactly am I comparing apples to oranges. First, I am talking about games released on multiplatform. Meaning Bungie will be releasing their games on MS hardware. Sony is making claims that MS would sabotage COD on PS systems but the same scenerios also goes for Sony. People continue to get wrapped up in purchase size all non relvelant details but the actual scenerio still is the same. What Sony says MS can do, they also can do as well and if they also purchase any other multiplatform franchise their own words still comes back to haunt them.
In other words, this line of argument does not really help them. Lets not forget that any thing that lands in Sony lap like ABK for MS their arguments can and will be used against them. I am looking at the situation as something that will continue to evole over years not just this one deal. There was a rumor not to long ago that Sony is in deal to purchase a multiplatform publisher. As the market leader, the cross the line of also getting a lot of push back and their own stance being used against them.
At the end of the day, it really does not matter the size of the acquistition, its whether it has an impact on consumers but that is not what is being questioned here. Instead we need to remain focus on the current context of these statements.
As I mentioned, I agree that statement from Sony was odd, as while possible MSFT could sabotage a PS version, it feels pretty unlikely bc of the backlash they would get.
As far as your Bungie deal comparison, the biggest difference is that it never even came close to being a legal issue, bc it was so small. The multiplatform decision was solely something decided between Sony and Bungie behind closed doors, and thus, that immediately makes the comparison irrelevant.
The size of the deals is relevant for various reasons, one of which being that size is what’s creating the legal issues for the MSFT/ABK deal and not Sony/Bungie. The ABK deal would be nearly 6x larger than any other video-game related acquisition in history, which is insane.
The statement is not odd, its bad. Stragety wise it really does not make sense and it hurts their chances as well on any acquistion they may do with a developer or publisher who have IP that have appeared on multiple platforms.
Bungie is a 3.6 billion dollar purchase, if you believe a single dev costing a billion dollars is a small purchase you really do not understand the nature of the industry. The thing is, Bungie is under Sony and if they can make their games run wose on MS platform and better on PS, it gives the same impression as Sony statements concerning COD. So yes the comparisons is very relevant as any current and future games from Bungie are not some small event.
The size of the deal is not relevant to the statement. The statement is that MS can make a game worse on PS system on PURPOSE. That has nothing to do with the size of the purchase but a direct statement of sabotage. Also the statement is not talking about the ABK as a whole but one single game. You are bring in context that has nothing to do with the size of the purchase but instead the relevant nature of the statement. The statement makes no claim of size of the purchase but instead that its competitor will sabotage a game coming to their competitor system which in conjunction would mean Sony has the exact same means to also do the same.
I have always stated that as a business, of course its to Sony advantage to make it harder for MS to get this deal done but that does not mean everything that comes from Sony stragety wise is smart, this line is just bad.
At least this argument, while still ridiculous, doesn't sound so nonsensical.
I think it sounds pretty ridiculous if you dig deep into the actual document, as Hoeg Law did (I watched a 1.5 hour stream about it). Sony is actually arguing that competition is best served by returning to the status quo. Really? The status quo has the market leader having access to unique advantages with Call of Duty (timed exclusives for content, etc.). How is giving an advantage to the market leader pro-competitive?
But fair enough that it maybe doesn't sound as non-sensical to someone who doesn't dive as deep into things as Hoeg Law did.
Except, Activision is incentivized to make marketing deals with the market leader. When the 360 was in the lead, they did it with Microsoft. When the PS4 was in the lead, they did it with Sony. The runner-up can offer more money than the market leader, but nonetheless still not be able to cut a deal, as DLC and MTX sales are so much more lucrative if the deal is with the market leader.
I tend to agree with Sony with this. I really wouldn't trust Microsoft at all. The number of ways they could sidestep their agreement and amount of specificity it needs to have to prevent any loopholes like "providing the option of gamepass to PS does not constitue access to COD".
If you're Sony you have to just assume that no matter what the contract says, you're going to need an alternative to COD, which isn't exactly something you can just do on command.
Maybe it's just because I grew up in the 90s and I'm conditioned to Microsoft and their brutal ways of ensuring they don't have to coexist with any competitors. I just don't trust them .
Deal just needs to die! Nobody should be allowed to buy huge publishers!!!
Lots of you do really fall for the MSFT "awww this takeover is good for everyone" rubbish don't you. They come out and say they don't want to hurt the competition, don't want to take games off the playstation platform, think it's unlikely people will switch......please.
If that's the case why spend $67billion for no real return or benefit? You don't spend that sort of money without a return and the only return in the console market where there are two companies competing is taking market share from the other. How exactly would MSFT do that?
Enticing people to switch that's how - and how would they?
make games exclusive.
license them at such high prices that the competitor can't afford to offer them
offer products at such a low cost it undercuts their rivals
cross subsidies from other profitable divisions to prop up the games division
Economically it makes no sense either. even with 30million games pass subscribers bringing in say $6billion (assuming everyone is an ultimate subscriber....which they aren't and a annual cost of $200) of revenue, how much of that really will end up being profit?
Day before takeover $6billion of gamepass + revenue from selling ABK games & ABK get about a $1billion of revenue (rough guess)
Day after takeover $6billion that's it. No sell on revenue, and the division they just bought has lost $1billion of revenue which was used to develop games.
This purchase has nothing to do with game offerings, value for money, a good service, innovation. Its sole goal is to damage a competitor. Cross subsidising of the game studios by MSFT should also be prevented.
Your mistake is looking at this purely from a console perspective. ABK make most of there money from mobile games, with pc taking up another chunk of revenue. Only around a 1/4 of ABK's revenue comes from consoles.
