Microsoft Has Responded to Sony's CADE Claim

Microsoft Has Responded to Sony's CADE Claim
Photo: 14.08.2022 931

Sony's claims are unjustified, and its purchase of Activision Blizzard does not pose a threat to competition, Microsoft says.

Sony recently told Brazil’s regulatory body CADE — which, like many regions, is currently studying Microsoft's acquisition of Activision Blizzard for approval, that the deal could influence players to switch from PlayStation to Xbox and threaten competition in the gaming market.

In a statement to CADE, Sony said that adding Activision Blizzard games to Game Pass would result in an unassailable lead in subscription services for Microsoft. Specifically, Sony called Activision's Call of Duty an essential game that has no rivals and influences users’ console choice. In 2015, Sony struck an agreement with Activision Blizzard in which some Call of Duty content appears first on PlayStation. 

Downplaying the importance of Call of Duty is one of the ways Microsoft is using to convince regulators to approve the Activision Blizzard takeover deal, the Japanese company is convinced. 

Now a 27-page CADE document has hit the web, which contains Microsoft's response to Sony's claims. According to the American IT giant, among the surveyed third-party companies (Ubisoft, Riot Games, Bandai Namco, etc.) Sony was the only company that claimed Call of Duty was in a genre of its own with no competition.

Microsoft claims that doesn’t want to see Call of Duty games on Game Pass on day one, because it can't stand competition with Microsoft's subscription service:

“Sony does not want attractive subscription services to threaten its dominance in the digital distribution market for console games”.

Microsoft also denies Sony’s claim that Call of Duty is a “category of games in itself”:

“Stating that Call of Duty has a loyal following is a premise from which does not follow from the conclusion that the game is a ‘gaming category per se’”.

In addition, Microsoft claims that arranging exclusivity deals has been at the heart of Sony’s strategy to strengthen its position in the games industry and that Sony  pays some developers for “blocking rights” in return for them agreeing not to add their content to Game Pass.

Microsoft also claims that not having Call of Duty on PlayStation would not make business sense unless enough people jumped over to Xbox to make up for the money lost from not selling PlayStation copies.

In its first response to news of the proposed Microsoft-Activision Blizzard deal, published in January, Sony said it expects Call of Duty games to remain multiplatform.


Brazil's Administrative Council for Economic Defense (CADE) is one of the many competition  regulatory agencies that Microsoft has to get by in order to finalize its acquisition of Activision Blizzard.  Unlike most of its international equivalents, however, CADE’s review process is public, and many of the relevant documents have been made freely available via its website.

As GeekWire points out, as a rule, major video game companies tend to keep their internal data private. Microsoft in particular has not announced sales numbers for the Xbox in years. CADE's regulatory transparency offers a rare  opportunity to look behind the curtain.

Sources: VGC, GeekWire

digital markets  Brazil 

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