Microsoft shoots down Sony’s claims that its Activision acquisition is anti-competitive

Microsoft has spoken out against Sony’s claims that its ongoing attempt to acquire Activision Blizzard would be anti-competitive, especially with regards to Call of Duty.

Last month Sony told Brazil’s regulatory body CADE, which is investigating the acquisition, that the acquisition could influence players to switch from PlayStation to Xbox.

At the time, he argued: “Call of Duty is so popular that it influences users’ choice of console, and its community of loyal users is entrenched enough that even if a competitor had the budget to develop a similar product, it would not be able to rival it.”

Now, according to ResetEra member Idas, Microsoft has replied to CADE with a lengthy response dismissing Sony’s claims.

As Idas reports, Microsoft stated: “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.”

Microsoft claimed that Sony doesn’t want to see Call of Duty games on Game Pass on day one, because it “is not resigned to having to compete with Microsoft’s subscription service”.

“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,” it claims.

“In other words, Sony rails against the introduction of new monetization models capable of challenging its business model.”

Microsoft also shoots down Sony’s claim that Call of Duty is a “category of games in itself”, stating: “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 shoots down Sony's claims that its Activision acquisition is anti-competitive
Sony claims that Call of Duty is in a genre of its own and that by having it on Game Pass this could encourage a large number of players to jump over to Xbox

It also lists five reasons arguing against Sony’s claim that the addition of Activision Blizzard games to Game Pass would lead to an unattainable lead in subscription services for Microsoft. According to Microsoft, this claim is wrong because:

  • it’s not part of Microsoft’s strategy to remove content from players, and COD will still be on PlayStation as a paid title
  • data shows that players see subscription services as only one way to pay for games
  • Sony’s claim ignores the “dynamic nature” of subscription services, and the fact that Sony has its own too
  • (redacted information)
  • there are numerous other game distribution channels and subscription services, many of which include content that isn’t available on Xbox

Microsoft also claims that arranging exclusivity deals has been at the heart of Sony’s strategy to strengthen its position in the games industry, and that as well as having its own first-party exclusives it also has exclusivity deals with third-party publishers.

It also claims that Sony actively tries to hamper Game Pass’s growth by paying some developers for “blocking rights” to prevent them adding content to Game Pass.

Finally, Microsoft claims that not having Call of Duty games on PlayStation wouldn’t make business sense, because it would only be profitable if enough people jumped over to Xbox to make up for the money lost from not selling PlayStation copies.

In its first response to Microsoft’s proposed acquisition of Activision Blizzard published in January, Sony said it expects Call of Duty games to remain multiplatform due to “contractual agreements”.

Microsoft’s head of gaming also subsequently confirmed his intention to keep Call of Duty on PlayStation platforms once Microsoft’s acquisition of Activision Blizzard is completed.

However, it was later claimed that Activision Blizzard is contractually committed to releasing only the next three Call of Duty games for PlayStation consoles, including this year’s Modern Warfare 2.