The soap opera between Sony and Microsoft over the takeover of Activision Blizzard continues. After Sony’s statements ten days ago, Microsoft discusses new elements in a recent document published by the Brazilian commission.
Microsoft responds to Sony over Call of Duty
The document in question is a new small gold mine which shows the lines of defense of Microsoft to validate the takeover of Activision Blizzard. On August 1, Sony said it feared Call of Duty and the Xbox Game Pass and declared that Call of Duty was a license capable of selling one console over another.
In a document published in recent hours, Microsoft responds to certain statements by its rival. The American publisher states, for example, that “Unsurprisingly, Sony was the only third party to convey a significantly different public opinion from MS/ABK and third parties regarding the transaction’s competitive analysis.”
With regard to Call of Duty specifically, Microsoft believes that Sony’s arguments are not really supported by hard evidence, especially with regard to the uniqueness of the license.
Sony is limited to commenting on the strength, loyalty and commitment of the Call of Duty brand. However, to assert that Call of Duty has a loyal following is a premise from which the conclusion that the game is a “category of games in itself” does not follow. PlayStation itself has an established base of brand-loyal players. This finding, however, does not support the conclusion that PlayStation – or any branded product with loyal consumers – is a separate market from all other consoles. Extrapolating from this finding, the extreme conclusion that Call of Duty represents “a category of games as such” is simply unjustifiable in the context of a quantitative or qualitative analysis.
Microsoft also reminded that Call of Duty is just one of the popular games, alongside other games such as Fifa, GTA, Assassin’s Creed, Resident Evil and other Far Cry, in addition to other games that are not available on Xbox due to exclusives from Sony or Nintendo.
Xbox Game Pass was already working fine without Activision
In a rather funny way, Microsoft also confronts Sony with its contradictions. The Japanese firm mentioned how Call of Duty was a “game changer” in the equation, but Microsoft also recalls that Sony praised the success of Xbox Game Pass, even though no Activision / Blizzard game is still present. in the subscription. Proof of this is that Call of Duty is therefore not an essential success factor for a platform.
As for the huge and non-recoverable advantage that Microsoft would gain by integrating Activison Blizzard into the Xbox Game Pass, Microsoft indicates that this will not happen for 5 reasons:
- 1. Microsoft recalled that it was not in its strategy to remove content from other platforms. We have already mentioned it several times, Call of Duty will continue to be available on PlayStation. “This fact reduces players’ incentives to migrate to Game Pass, as they will be able to continue subscribing to their preferred service (e.g. Sony’s PlayStation Plus) and additionally easily purchase a copy of Call of Duty. “.”
- 2. Data shows that gamers view subscription services as one of many ways to pay for games, something Sony itself has claimed. “If subscription services compete with the buy-to-play model, as recognized by Sony itself, and Activision content will continue to be distributed through the buy-to-play channel, then Players can simply continue to choose which payment model they prefer to access Activision content.”
- 3. Microsoft recalls the dynamic nature of subscription services and “the relevant presence of Sony itself in this space. » “In fact, subscription services represent a recent monetization strategy. As much as Game Pass was a pioneer, it’s a dynamic space with new services and content emerging, and there are already a number of incumbents and services. Sony already offers a subscription service, PlayStation Plus, which the company was able to scale from its existing user base, the size of the PlayStation platform, and its exclusive content. In fact, Sony has overtaken Microsoft in terms of console sales and installed base, having sold more than twice as many consoles as Xbox in the last generation. »
- 4. This reason is hidden due to confidential information.
- 5. Microsoft asserts that there is strong upstream competition and various rival game distribution channels, including Stores and subscription services, which have access to a wide range of titles in addition to Activision Blizzard games, including exclusive content not available to Microsoft consumers.
Finally, Microsoft also points out that the use of exclusive arrangements has been at the heart of Sony’s strategy to strengthen its presence in the gaming industry. Microsoft also claims that in addition to owning exclusive first party content, Sony has also entered into agreements with third-party publishers to guarantee other forms of exclusivity concerning certain games, such as marketing exclusives or exclusive rights concerning downloadable content.
More importantly, Microsoft blames Sony and says its ability to grow Xbox Game Pass has been hampered by Sony’s desire to inhibit such growth. Sony would thus pay “blocking fees” to prevent developers from adding content to Xbox Game Pass and other competing subscription services. The Brazilian document hides many confidential elements on this part.
Finally, Microsoft asserts that regardless of the criticisms made by Sony, the strategy of keeping Activision Blizzard games, without releasing them on competing consoles, would simply not be profitable for Microsoft, since such a strategy would only be profitable if the Activision Blizzard’s games were able to attract a large enough number of gamers into the Xbox console ecosystem, and whether Microsoft could earn enough revenue from the sale of games to offset the losses resulting from the non-distribution of those games on competing consoles. It is indeed difficult to deprive yourself of the tens of millions of PlayStation customers interested in Activision Blizzard licenses.