
Microsoft has claimed that Sony is paying for “blocking rights” to prevent developers from adding their content to Xbox Game Pass. The explosives claims are part of documents (Word document) filed with the Brazilian National Competition Regulator and are part of an assessment of Microsoft’s acquisition of Activision Blizzard.
“Microsoft’s ability to further expand Game Pass has been hampered by Sony’s desire to curb such growth,” Microsoft claims in an Aug. 9 filing with the Administrative Council for Economic Defense (CADE), translated from the Portuguese. “Sony pays for ‘blocking rights’ to prevent developers from adding content to Game Pass and other competing subscription services.”
Does this mean that Sony is bad and that Microsoft is casually revealing some dastardly business practices here? The reality is probably a little more complicated on both sides. Sony could simply pay for exclusive rights to its own streaming services, or it could have clauses in some publishing contracts that prevent some games it publishes from being published on competing subscription services.
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It’s not clear what exactly Microsoft is referring to here, but games publishing contracts can be complex, especially when it comes to streaming rights and subscription services. Documents filed in the Epic games against Apple A trial last year found that Microsoft had considered cutting the revenue split for PC games “in exchange for granting streaming rights to Microsoft.”
Had Microsoft gone ahead with its plans, it could have resulted in the company getting exclusive streaming rights to some games, making them unavailable on competing streaming services. It all depends on how publishing contracts are written, and both Microsoft and Sony regularly secure game exclusives with timed releases, console exclusivity, and lots of marketing dollars.
Microsoft is trying to convince Brazil’s CADE regulator to abandon its proposed $68.7 billion acquisition of Activision Blizzard. While the Federal Trade Commission (FTC) analyzes Microsoft documents about the US acquisition, that correspondence is private. That is not the case in Brazil, where the antitrust regulator offers public documents that provide a unique insight into the business competition between Microsoft and Sony.
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Documents from Brazil’s CADE have been analyzed by Xbox and PlayStation fans over the past week, with posters on ResetEra highlighting the juicy bits. The regulator has asked Sony and other Microsoft rivals about the acquisition of Activision Blizzard. Sony previously responded to the Brazilian regulator, claiming that it would be difficult for other developers to create a franchise to rival Activision’s. Duty and that it stands out “as a gaming category in its own right”.
Of course, Microsoft disagrees, and Ubisoft, Riot Games, Bandai Namco, and Google have all pointed to competition for Duty in the form of Apex Legends, Battlefield, PUBGand more.
Microsoft also claims that adding Activision Blizzard content to Xbox Game Pass will somehow increase competition. “The inclusion of Activision Blizzard content in Game Pass does not affect the ability of other players to compete in the digital game distribution market,” Microsoft claims in a document, also stating that it increases competition through “content of high quality at lower direct costs.”
Sony hasn’t commented on this particular point yet, but at $9.99 a month for Xbox Game Pass, it’s easy to imagine consumers choosing that option to buy titles like Duty instead of paying $60 or more to buy and own the game.
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Microsoft also states that it does not distribute games such as Duty at rival console stores “simply wouldn’t be profitable” for the company. Microsoft has previously made it clear that it will remain Duty on Playstation. Microsoft says a strategy of not distributing Activision Blizzard games on rival consoles would only be profitable if the games could attract a large number of players to the Xbox ecosystem, resulting in revenue to offset the losses from those titles not being sold. on competing consoles.
Whether Microsoft’s claims about “blocking rights” are correct, it wouldn’t be the first time Sony has used financial incentives to block game developers. Sony held back PS4 cross-platform play for years and implemented a cross-play revenue share for publishers who wanted to enable cross-play in their games.
Sony’s cross-platform revenue share forced publishers to pay Sony a royalty when PlayStation players contributed more than a certain percentage to the profits of a cross-platform game to offset Sony’s “decrease in revenue” and enable crossplay. Epic Games CEO Tim Sweeney testified last year that Sony was the only platform holder to demand this fee for crossplay.
We’ve reached out to Sony to comment on Microsoft’s claims and to clarify what Sony is allegedly blocking. We haven’t heard from either company, nor do we expect them to comment on these explosive details. But we’ll be watching Brazil’s CADE documents carefully in the coming days to see if and how Sony responds to Microsoft’s claims.
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