Microsoft’s Acquisition of Activision Blizzard Would Lead to Higher Prices, Worse Deals for Indie Developers – Sony

Sony believes that if Microsoft gains the market advantage through its acquisition, the dominance of Xbox Game Pass would be bad for the industry and consumers.

Posted By | On 24th, Nov. 2022

Xbox Game Pass

Among the details to be revealed in Sony’s recent 22-page statement to the UK’s Competition and Market Authority, the company has said that if Microsoft’s acquisition of Activision Blizzard were to go through, developers will be hurt in the long run, and customers will have to suffer from price hikes.

Sony believes that the regulatory body’s investigation will end up putting a halt to the acquisition, considering the harm it would do to the competition in the market were it allowed to go through. Calling Call of Duty an irreplaceable franchise, Sony states that Microsoft owning the IP would severely imbalance the market against PlayStation.

“Microsoft would control irreplaceable content which drives user engagement,” said Sony in the statement. “Post-transaction, Microsoft would control Activision content which drives [redacted] times as much user engagement on PlayStation than all of SIE’s best performing first-party titles put together.”

Sony believes that, with the lack of Call of Duty releases on PlayStation, a “significant number” of players would instead switch to Xbox. And this being the spark that lowers competition in the market place would drive Microsoft to raise the prices of its consoles, games, and even PC and Xbox Game Pass.

“Microsoft’s foreclosure strategy would lock in many consumers to Xbox, including existing Xbox users who play Call of Duty and those switching from PlayStation to play Call of Duty. These locked-in users would become less likely to switch in response to any procompetitive actions on SIE’s part,” says Sony.

“This would effectively prevent SIE from competing for the business of a large portion of console gamers, reducing its incentives to invest.”

In talking about how the deal would hurt developers, Sony believes that Microsoft’s position of market leader would give the company a monopoly when it comes to subscription services with Xbox Game Pass, which could prompt Microsoft into offering indie developers worse deals.

“As Microsoft foreclosed PlayStation/PlayStation Plus, it would likely become a critical distribution channel for independent developers,” says Sony. “In that weakened negotiating position, independent developers would likely receive worse terms for their content from Microsoft or even be required to promise exclusivity in return for distribution, thereby diminishing independent developers’ ability and incentive to invest in high-quality new games. This, in turn, would also harm consumers even further.”


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