Microsoft’s documents claim that Sony PlayStation is paying for ‘blocking rights’ to stop developers from adding their games to Xbox Game Pass specifically.
The Verge recently reported that documents were filed with Brazil’s National Competition regulator as part of a review of Microsoft’s acquisition of Activision Blizzard that includes these explosive claims.
The claims read as follows: “Microsoft’s ability to continue expanding Game Pass has been hampered by Sony’s [PlayStation] desire to inhibit such growth. Sony [PlayStation] Pays for ‘blocking rights’ to prevent developers from adding content to Game Pass and other competing subscription services.” – Microsoft’s claims in an August 9th filing to the Administrative Council for Economic Defence (CADE), as translated from Portuguese.
Is What Sony Is Doing Wrong?
Unfortunately, when it comes to streaming and publishing contracts, there is no such thing as black and white or right and wrong. The reality of the situation is far more complicated on both sides. Microsoft might be making allegations about the situation when Sony might be paying for exclusive rights for its streaming services or clauses in some of their publishing contracts that prevent games it publishes from being published on rival subscription services.
It is no secret that Sony loves to publish “PlayStation Exclusives” such as God of War and other PlayStation games that they keep from being played on rival consoles such as Xbox or even Nintendo Switch.
It is not quite clear what exactly Microsoft is referring to with their claims as contracts for publishing games can be very complicated on the side of the developer and the publisher, particularly regarding rights of streaming and when subscription services are involved.
Microsoft is not entirely innocent themselves as documents filed in the Epic Games v. Apple trial last year revealed that Microsoft had been considering lowering the revenue split for PC games “in exchange for the grant of streaming rights to Microsoft” which would have led to the company securing exclusive streaming rights on some games, preventing them from being available on rival streaming services and being no better than Sony.
Both companies regularly secure game exclusives that involve timed releases or console exclusivity.
Acquisition of Activision Blizzard
Microsoft is currently attempting to convince Brazil’s CADE regulator that it should waive the company’s proposed acquisition of Activision Blizzard for US$68.7 billion. The acquisition is also being analyzed by the Federal Trade Commission (FTC) in the US, however, their correspondence is private, whereas Brazil’s competition regulator offers up public documents that provide unique insight into the business competition between Microsoft and Sony.
The documents available have been analysed by both Xbox and PlayStation fans all over the world, and posters on ResetEra have kindly highlighted the juicy parts for those who don’t want to wade through all the legal jargon themselves.
The regular is asking Sony and other Microsoft rivals about the Activision Blizzard acquisition, and they claim that it would be difficult for other developers to create a franchise that rivals Activision’s Call of Duty and that it stands out “as a gaming category on its own”, which Microsoft naturally disagrees.
Other companies like Ubisoft, Riot Games, Bandai Namco and Google all highlighted that competition to Call of Duty does exist in games like Apex Legends, Battlefield, Player Unknown Battle Grounds and more.
Microsoft argues that they would not be adding Activision Blizzard games exclusively to Xbox Game Pass but argues that not distributing games at rival console stores “would simply not be portable” for the company and appears to have no intention of making the acquired IPs exclusive.
Sony’s Past Financial Endeavours
Whether the claims from Microsoft are true or not, it wouldn’t be the first time that Sony has used financial incentives to block other game developers.
Sony decided to hold back PlayStation 4 cross-platform play for years, only to implement a crossplay revenue share for publishers that wanted to enable crossplay in their games. The cross-platform revenue share forced publishers to pay Sony a royalty whenever PlayStation players contributed more than a certain percentage to the bottom line of a cross-platform game to “offset the reduction in revenue” from Sony enabling crossplay.
Tim Sweeney, CEO at Epic Games, testified last year that Sony was the only platform holder that required that kind of compensation for crossplay.
Big rivals like Sony and Microsoft are constantly trying to one-up each other. There have been no comments from either company regarding the claims and it’s doubtful that there will be any clarification on the matter.
