Microsoft has tried to convince Sony that it will stay Duty on PlayStation if Activision’s giant acquisition is approved, but the companies have not agreed on the terms of a potential deal. That has clearly left Microsoft frustrated and looking for partners to address regulators’ concerns. Both Nvidia and Nintendo have made efforts to help Microsoft address regulators’ concerns.
Speaking today at a special press event in Brussels, Microsoft president Brad Smith outlined the software giant’s position on the deal, describing Sony as a “super-dominant company” that outsells Xbox consoles and resists competition in the form of the acquisition of Activision.
Smith put a question to the UK’s Competition and Markets Authority (CMA), which has raised concerns about game exclusivity and cloud gaming. “Do you want to kill a deal and solidify Sony’s position and its 80 percent share of the European Economic Area… or do you want to move the future forward with guardrails and behavioral remedies and bring this title to 150 million more people? to take? Smith asked. “I think this is the fundamental choice most regulators will have to make.”
“Want to kill a deal and strengthen Sony’s position and its 80 percent share”
Smith and other Microsoft executives met with European lawmakers today in a confrontation over Activision and Duty. Xbox chief Phil Spencer and other senior Microsoft executives discussed Microsoft’s case today, with PlayStation chief Jim Ryan, Activision CEO Bobby Kotick and representatives from Google, Nvidia, Valve, Electronic Arts and the European Games Developer Federation speaking. were all present at today’s meetings. Half a dozen different national competition watchdogs also attended the meetings.
In between meetings and phone calls to facilitate the acquisition, Microsoft took the time to announce that it has struck a new deal with Nvidia, which operates the GeForce Now cloud gaming service. It hopes the deal will ease some concerns about the future of cloud gaming and Microsoft’s control of Xbox games and possibly Activision Blizzard titles on rival services. This is also why Microsoft and Nintendo signed a deal today to bring Duty to Nintendo products on the same day, games from the franchise come to Xbox.
However, Smith did not share any of the closed-door meetings, instead trying to paint a picture of a domineering Sony complaining about Duty access.
“Even last year, when Sony was facing supply chain constraints and numbers were shrinking, they came back strong,” said Smith. “In the fourth quarter as their supply chain recovered, by our calculation on a global basis, Sony outsold Microsoft in the fourth quarter by a margin of 69 to 39. Pretty much in line with the global market shares we’ve seen for 20 years. ”
Microsoft revealed that “Sony has emerged as the loudest objector” to last year’s acquisition of Activision after a public back-and-forth between Xbox’s Spencer and PlayStation’s Ryan. Microsoft initially offered Sony a deal to keep Duty on PlayStation for “another number of years” following an existing marketing deal, with Spencer confirming the offer in a statement to The edge.
Ryan described the deal as “inadequate on many levels” and noted that Sony intended to keep details of the negotiations private. “It was not my intention to comment on what I understood to be a private business discussion, but I feel the need to set the record straight because Phil Spencer brought this to the public forum,” Ryan said in a statement in September last year.
“Microsoft’s demand for performance reviews for SIE’s leadership is clear intimidation.”
The sharp words didn’t stop there. Microsoft has also accused Sony of paying developers to keep their content off the Xbox Game Pass service Sony has argued that Microsoft’s acquisition of Activision Blizzard “could hurt developers and lead to price increases”. While filing an FTC lawsuit against the acquisition, Sony lawyers labeled Microsoft’s demands to view Sony employee performance ratings as “clear harassment.”
“Microsoft’s demand for performance reviews for SIE’s leadership is clear intimidation,” says the legal filing. “Even in employment cases, courts require specific proof of relevance before submitting personnel files.”
But while Sony and Microsoft can argue all day long, it’s ultimately up to the regulators to let the deal go through. Whether Microsoft’s Nintendo and Nvidia deals will be enough to convince regulators remains to be seen, but Microsoft certainly hopes to avoid going to court to defend its deal both in Europe and the US.
EU regulators have set an April 11 deadline for a final decision on Microsoft’s proposed acquisition of Activision. We now await how regulators in the US, UK and EU react to Microsoft’s new deals today.
