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Sony claims that Microsoft's acquisition of Activision violates anti-competitive laws, but Microsoft refutes

Sony claims that Microsoft's acquisition of Activision violates anti-competitive laws, but Microsoft refutes this

Sony has stated that Microsoft's ongoing acquisition of Activision Blizzard would be anti-competitive, particularly with regard to Call of Duty. Microsoft has responded to these allegations.

Sony warned last month that the proposed deal could convince players to switch from PlayStation to Xbox to the Brazilian regulatory body CADE, which, like many other regions, is currently reviewing the proposed deal for approval.

It stated at the time that "even if a competitor had the budget to develop a similar product, it would not be able to rival Call of Duty because it is so popular that it influences users' choice of console."

Microsoft has now responded to CADE with a 27-page acquisition-related document in an effort to refute Sony's assertions.

Microsoft notes in the report, which was translated by source, that while many third parties, such as Ubisoft and Bandai Namco, responded to CADE, Sony was the only organization to assert that Call of Duty belonged in a genre all its own with no rivals.

According to Microsoft, "only one third party, Sony, presented opinions that were materially different from the Applicants and the other third parties consulted by the SG." Sony is alone in this viewpoint, and curiously, in its letter-reply, as will be explained below, Sony even contradicts itself.

Microsoft continues by saying that Sony "is resentful of having to compete with Microsoft's subscription service" and as a result, Sony "does not want to see Call of Duty games on Game Pass on day one."

The response states, "Sony's public statements on subscription games and its response to the SG's letter are clear." "Sony does not want appealing subscription services to undermine its hegemony in the digital console game distribution market.

In other words, Sony opposes the development of new monetization strategies that could undermine its business strategy.

Despite having a devoted following, Microsoft refutes Sony's assertion that Call of Duty is a "category of games in itself."

According to Microsoft, saying that Call of Duty has a devoted fan base is a premise from which does not follow the conclusion that the game is a "gaming category per se."

In addition, there is a strong base of devoted PlayStation brand players. However, such a finding does not imply that the PlayStation - or any other branded product with devoted customers - has a distinct market from all other consoles.

"Under any quantitative or qualitative analysis, extrapolating from such a finding to the extreme conclusion that Call of Duty is a "category of games per se" is simply unjustifiable."

Sony claims that Call of Duty is a genre unto itself, and that having it on Game Pass could entice a large number of players to switch to Xbox.
Sony claims that Call of Duty is a genre unto itself, and that having it on Game Pass could entice a large number of players to switch to Xbox.

It also provides five counter-arguments to Sony's claim that adding Activision Blizzard games to Game Pass would give Microsoft an unattainable lead in subscription services.

According to Microsoft, this claim is incorrect because:

  • It is not part of Microsoft's strategy to remove content from players, and COD will remain a paid title on PlayStation.
  • According to data, players see subscription services as just one way to pay for games.
  • Sony's claim ignores the "dynamic nature" of subscription services, as well as the fact that Sony has its own subscription service (Redacted information).
  • There are numerous other game distribution channels and subscription services available, many of which contain content not 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 it has exclusivity deals with third-party publishers in addition to its own first-party exclusives.

It also claims that Sony actively works to stifle Game Pass's growth by paying some developers for "blocking rights" in exchange for agreeing not to include their content in Game Pass.

Finally, in what may be the clearest indication yet that Call of Duty will remain multiplatform, Microsoft claims that not having CoD games on PlayStation would be unprofitable because it would only be profitable if enough people switched to Xbox to compensate for the money lost from not selling PlayStation copies.

Sony stated in its January response to Microsoft's proposed acquisition of Activision Blizzard that it expects Call of Duty games to remain multiplatform due to "contractual agreements."

Following Microsoft's acquisition of Activision Blizzard, Microsoft's head of gaming confirmed his intention to keep Call of Duty on PlayStation platforms.

However, it was later revealed that Activision Blizzard is contractually bound to only release the next three Call of Duty games for PlayStation consoles, including this year's Modern Warfare 2.

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