Regulatory Warfare: Microsoft concedes PlayStation's market dominance, blames Sony for spreading FUD about US$69 billion Activision Blizzard deal in the EU
Sony Interactive Entertainment CEO Jim Ryan met with EU antitrust chief Margrethe Vestager last week. Though the meeting was behind closed doors, sources familiar with the matter say that Ryan discussed Microsoft's US$69 billion bid to buy Activision Blizzard.
Microsoft is not very comfortable with this meeting, particularly with media reports claiming that Sony is trying to impress regulators in Brussels to rule against the deal. Sony is apparently worried that Microsoft may not offer the PlayStation parity with regards to Activision's popular Call of Duty franchise.
Taking to Twitter, Microsoft's Frank X. Shaw said in a series of tweets that "nothing could be further from the truth".
Shaw confirmed that Microsoft offered Sony a 10-year deal to give them parity. Sony's response to this is not clear, but it seems like both companies have failed to reach an understanding.
We’ve been clear we’ve offered Sony a 10 year deal to give them parity on timing, content, features, quality, playability, and any other aspect of the game.
We’ve also said we’re happy to make this enforceable through a contract, regulatory agreements, or other means."
Shaw also conceded that Sony is the console market leader and that it wouldn't make business sense to prevent access to Call of Duty on the PlayStation.
Sony is the console market leader and it would defy business logic for us to exclude PlayStation gamers from the Call of Duty ecosystem.
Our goal is to bring Call of Duty and other games – as we did with Minecraft – to more people around the world so they can play them where and how they want."
Microsoft and Sony haven't exactly been on talking terms ever since the Redmond-giant announced its plans to acquire Activision Blizzard. Recently, both companies have been vying for a one-upmanship with regulators for their own reasons.
Both the US Federal Trade Commission (FTC) and the UK Competition and Markets Authority (CMA) raised eyebrows on possible antitrust issues with the Microsoft-Activision merger. Microsoft told the UK CMA that Sony, too, has permanently blocked popular titles such as Final Fantasy VII Remake (FF7R), Final Fantasy XVI (FFXVI), Bloodborne, and Silent Hill 2 Remaster from coming to the Xbox.
The FTC is concerned that Microsoft may once again enforce Xbox and Windows PC exclusivity with Activision Blizzard titles just like it did with Bethesda Softworks games such as Starfield and Redfall.
Microsoft has repeatedly stated that the primary motive for purchasing Activision was to gain a foothold in the mobile gaming market owing to the huge popularity of games such as Candy Crush and MMORPGs like World of Warcraft but not for AAA titles like Call of Duty per se.
Shaw's tweets echo off what Microsoft Vice Chair and President Brad Smith had opined earlier in the Wall Street Journal. In the WSJ op-ed, Brad Smith claimed that the FTC's plans to stall the Activision Blizzard deal would be a "huge mistake that would "hurt competition, consumers, and thousands of game developers".
Smith felt that this deal is important for Microsoft in order to ably compete against the likes of Sony and Nintendo. Mobile games come with several in-app purchases and Google and Apple partake a sizeable chunk of this revenue via their respective app stores. Microsoft doesn't have a skin in this game yet.
He also reiterated that not making Call of Duty available on PlayStation would be "economically irrational", and that's the reason Microsoft offered Sony a 10-year contract to make each Call of Duty release available on PlayStation the same day it arrives on Xbox.
At the moment, it is not exactly clear how Sony wants to approach this issue with the EU. Microsoft has repeatedly claimed that Call of Duty will follow Minecraft's footsteps and would be available across platforms.
Microsoft has recently reiterated its commitment to bring Call of Duty to current and future Nintendo consoles while also continuing to offer multiplatform support for games such as Fallout 76, The Elder Scrolls Online, and Minecraft.
I hear Sony is briefing people in Brussels claiming Microsoft is unwilling to offer them parity for Call of Duty if we acquire Activision.— Frank X. Shaw (@fxshaw) January 28, 2023
Nothing could be further from the truth.