In a lengthy document submitted to the Brazilian government as part of its investigation into Microsoft’s acquisition of Activision Blizzard, Microsoft has claimed Sony pays developers “blocking rights” to prevent games from appearing on Xbox Game Pass.
The accusation appears in a 27-page rebuttal of Sony’s recent objections to Microsoft’s Activision Blizzard buyout, made to Brazil’s Administrative Council for Economic Defense (CADE) as part of its investigation. Much of Sony’s argument had focused on Call of Duty – which it claimed had “no rival” and was “so popular that it influences users’ choice of console” – with the PlayStation maker suggesting, among other things, that the inclusion of Call of Duty on Microsoft’s Game Pass service would hamper its ability to compete.
Microsoft’s response is as wide-ranging as Sony’s initial objections, touching on everything from the fact it has previously managed to grow Game Pass without Activision Blizzard’s titles – suggesting Call of Duty mightn’t be quite as “essential” as Sony claims – to a reiteration of its assurances that it won’t be making Call of Duty an Xbox console exclusive.
It’s here that Microsoft takes a swipe at Sony, pointing out (as per a Google-translated version of its filing) that for all its concerns around exclusivity, “the use of exclusive arrangements has been at the heart of Sony’s strategy to strengthen its presence in the gaming industry”.
Microsoft says Sony’s concerns are “incoherent”, given that, by virtue of PlayStation’s dominant market share, the company is a leader in the distribution of digital games – especially when, as Microsoft claims, Sony has actively hampered the growth of Game Pass by paying for “‘blocking rights’ to prevent developers from adding content to Game Pass and other competing subscription services”.
Ultimately, argues Microsoft, Sony’s fear isn’t that the acquisition will hamper its ability to compete, but that the Game Pass business model of delivering “high-quality content at low costs to
players” will threaten a market leadership “forged from a device-centric strategy and focused on exclusivity”.
The full document has plenty more in the way of rebuttals to Sony’s claims (including Microsoft’s note that, out of all the major industry players to be canvassed by the Brazilian government on the acquisition, Sony was the only one to object) and is well worth a read.
Expect more back and forth as the acquisition comes under further scrutiny from other countries ahead of any regulatory approval. Assuming Microsoft’s Activision Blizzard buyout doesn’t fall foul of regulators, the process is anticipated to conclude by next summer.