Microsoft claims that Sony has paid for “blocking rights” to prevent developers from adding their content to Xbox Game Pass. The explosive claims are part of documents (Word doc) filed with Brazil’s national competition regulator and a review of Microsoft’s acquisition of Activision Blizzard.
“Microsoft’s ability to continue to expand Game Pass is hampered by Sony’s desire to prevent such development,” Microsoft claims in a Portuguese-translated filing with the Council for Economic Defense (CADE) on August 9. “Sony pays for ‘blocking rights’ to prevent developers from adding content to Game Pass and other competing subscription services.”
Does this mean Sony is evil and Microsoft is casually revealing some bad business practices here? The reality is probably a bit more complicated on both sides. Sony may only be paying for exclusive rights to its own streaming services, or it may have clauses in some publishing agreements that prevent certain games from being published on rival subscription services.
It’s not clear what Microsoft is talking about here, but games publishing deals can be complicated, especially when rights to streaming and subscription services are involved. Documents filed in Epic Games vs. Apple Last year’s test revealed that Microsoft was considering reducing the revenue split for PC games “in exchange for giving Microsoft streaming rights.”
If Microsoft were to go ahead with its plans, it could secure exclusive streaming rights to certain games, preventing the company from being available on rival streaming services. It all depends on how publishing deals are written, and both Microsoft and Sony regularly include secure game exclusives that include timed releases, console exclusivity, and lots of marketing dollars.
Microsoft is trying to convince Brazil’s CADE regulator that it should waive the company’s proposed $68.7 billion acquisition of Activision Blizzard. While the Federal Trade Commission (FTC) is analyzing documents it acquired from Microsoft in the US, that correspondence is private. Not so in Brazil, where its competition regulator has made public documents that provide unique insight into the business rivalry between Microsoft and Sony.
Documents from Brazil’s CADE have been analyzed by Xbox and PlayStation fans over the past week, with posters on ResetEra highlighting the juicy parts. The regulator is questioning Sony and other Microsoft rivals about the Activision Blizzard acquisition. Sony previously responded to Brazilian regulators that it would be difficult for other developers to create franchises that rival Activision’s. Call of Duty And that stands out “as a gaming category unto itself”.
Naturally, Microsoft disagrees, and Ubisoft, Riot Games, Bandai Namco, and Google all have competition highlighted. Call of Duty in the form of Apex Legends, battlefield, PUBGand more.
Microsoft also claims that adding Activision Blizzard content to Xbox Game Pass will actually increase competition. “The inclusion of Activision Blizzard content in Game Pass does not harm the ability of other players to compete in the digital game distribution market,” Microsoft claims in a document, where the company argues that competition has increased due to “high-quality content”. At a lower immediate cost.”
Sony has yet to respond on this particular point, but at $9.99 per month for Xbox Game Pass, it’s easy to imagine consumers choosing that option to play titles. Call of Duty Instead of paying $60 or more to buy and own the game.
Microsoft also argues that it does not distribute games Call of Duty Competing console stores “would not be profitable” for the company. Microsoft has already made it clear that it will Call of Duty on the playstation. Microsoft says that the strategy of not distributing Activision Blizzard games on rival consoles will only be profitable if the games can attract a large number of players to the Xbox ecosystem, thereby generating revenue to compensate for losses from not selling these titles on rival consoles.
Whether claims about Microsoft’s “right to block” are true, this isn’t the first time Sony has used financial incentives to block game developers. Sony stopped PS4 cross-platform play for years and implemented crossplay revenue sharing for publishers who wanted to enable crossplay in their games.
Sony’s cross-platform revenue sharing forced publishers to pay royalties to Sony whenever PlayStation players contributed more than a certain percentage to the bottom line of cross-platform games to “offset the loss in revenue” from crossplay enabling Sony. Epic Games CEO Tim Sweeney testified last year that Sony was the only platform holder that required this compensation for crossplay.
We’ve reached out to Sony for comment on Microsoft’s claims and to clarify what Sony allegedly blocked. We haven’t heard back from either company yet, and we don’t expect to comment on these explosive details. But we’ll be watching the documents from Brazil’s CADE carefully in the coming days to see how Sony responds to Microsoft’s claims.