By Chris Katje
PlayStation owner Sony Group Corp has been vocal in its attempt to block rival Microsoft Corporation, manufacturer of the Xbox, from buying video game publisher Activision Blizzard for roughly $69 billion.
And while it would appear that Sony would get its way — with the Federal Trade Commission (FTC) suing Microsoft over the deal, citing antitrust issues — the company may soon find itself under regulatory scrutiny as well.
A new report says Sony’s attempts to block a Microsoft subpoena to gain access to the company’s documents have not been entirely successful. As a result, Sony may be forced to reveal how much it pays to keep games off the Xbox Game Pass.
FTC Chief Administrative Judge D. Michael Chappell sided with Microsoft in the request, according to Kotaku.
The request from Microsoft centers on details of exclusivity agreements that Sony’s PlayStation gaming console has. Microsoft has accused Sony of paying “blocking rights” to keep some content off of the Xbox Game Pass.
“The nature and extent of SIE’s (Sony Interactive Entertainment) content-licensing agreements are relevant to the Complaint’s allegations of exclusivity arrangements between video game console developers and video game developers and publishers,” Judge Chappell said.
Exclusive deals are rarely made public, according to The Verge. The new ruling by the judge could open Sony up to taking precautions on exclusivity to compete with Microsoft.
The European Commission is set to decide on the deal by April 25 and is not expecting Microsoft to sell off its assets, according to Reuters.
The Commission view Microsoft’s efforts to offer licenses for the Call Of Duty content would be enough to clear the hurdle for an approval.
The development also serves up a bit of irony, considering it was originally Sony crying to regulators, claiming a Microsoft/Acitivision deal would lead to major games like the “Call of Duty” franchise being made exclusive and taken off the PlayStation.
Microsoft Gaming CEO Phil Spencer has said otherwise.
“We’re not taking Call of Duty from PlayStation. That’s not our intent,” Spencer said on a podcast. “Our intent is not to do that and as long as there’s a PlayStation out there to ship to, our intent is that we’ll continue to ship Call of Duty on PlayStation.”
Microsoft President Brad Smith also clapped back, claiming that Sony has a larger market share than Microsoft in markets, including a split of around 70% (Sony) to 30% (Microsoft) globally.
Smith also cited a strong share for Sony in Europe and Japan, but did not provide market share for the U.S. region, which remains the center of the case and where Microsoft could have a larger share.
It’s worth noting that Activision signed deals with Nintendo Co and Nvidia Corp for “Call of Duty,” which will likely help the Microsoft acquisition get approved by the European Union.
Meanwhile, Sony has many exclusive video games like “God of War” and “The Last of Us,” which are not available on the Xbox. As this trial gets further along, Microsoft could build its case that exclusive titles are nothing new in video games. And this comes as “Call of Duty” is not exclusive to Microsoft, only speculated by its rival for in the future.
Another item that won’t help Sony is a rumor that the video game giant is rumored to be acquiring video game publisher Take-Two Interactive Software Inc if the Activision and Microsoft deal is approved.
Take-Two is behind hit games like “Grand Theft Auto,” “Red Dead Redemption” and the FIFA and NBA2K franchises.
If Sony were to make a bid on Take-Two, Microsoft could have a similar argument against it, saying that Sony could make some of the popular games exclusive.
A hearing is currently scheduled for Aug. 2.
Activision Blizzard shares trade at $78.31 versus a 52-week trading range of $70.94 to $81.83. Under the terms of the acquisition, shares would be worth $95 each if Microsoft’s deal is approved.
Produced in association with Benzinga
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