Brazil’s Administrative Council for Economic Defense (CADE), is the entity that is judging Microsoft's acquisition of Activision in said country's market, and they’ve been publicly relaying the documents handed to them by the involved parties. Most recently, as relayed by VGC, Xbox sent CADE a 27-page document in which they heavily refuted the arguments PlayStation previously made to CADE, that no other developer could compete with Call of Duty. On top of challenging this claim, Xbox specifically accused Sony of its own anti-competitive practice, such as paying for ‘blocking rights’ so it can keep games off Xbox’s Game Pass service, as well as other subscription services.
As transcribed by VGC, Xbox goes on to call Sony’s concerns ‘incoherent’ given that exclusive content has been at the core of PlayStation’s strategies to strengthen its brand, and PlayStation is the current market leader in digital games’ distribution. Xbox states that Sony’s arguments revealed a ‘fear’ about their Game Pass service since it threatens PlayStation’s leadership, which “has been forged from a device-centric and exclusivity-focused strategy over the years.”
Microsoft announced the purchase of Activision Blizzard back in January 2022, however, these deals don’t just happen overnight. Given that these are such large and international companies, the purchase is subject to the judgment of various countries’ regulatory bodies that need to make sure it isn’t undermining the fairness of the market. Essentially, they want to make sure it doesn’t create something close to a monopoly, where it’s too difficult to compete against one company. PlayStation didn’t accuse Xbox of this in the document they'd handed to CADE, but they did claim that Call of Duty defined the FPS genre and that the purchase would influence users’ console choice.
Xbox’s now revealed document states, “Sony does not want attractive subscription services to threaten its dominance in the digital distribution market for console games.” They argued against the concept that Call of Duty is in a league of its own just because it's a market leader with a loyal fanbase. Xbox brings up the fact that PlayStation itself is a market leader with a loyal fanbase but that doesn’t put it in its own separate market outside of the other consoles.
They go on to refute the arguments made for anti-competitiveness by reaffirming that they have no plans to make Call of Duty an Xbox exclusive, as it would “simply not be profitable.” Though certain specific bits of information are redacted from the documents for confidentiality purposes, Xbox does claim that the loss of sales resulting from console exclusivity could not be offset by the higher revenue earned in first-party sales. This, according to them, is partly due to PlayStation having “the most loyal users across its various generations.”
Finally, they stated that even if they were to eventually make Call of Duty exclusive due to it somehow becoming profitable, it would have “no competitive impact” due to exclusivity being such a common thing in the modern market, and rival consoles having higher degrees of player loyalty.
It’s been a while since we’ve seen such public vitriol between two of the major console manufacturers; it’s clear this purchase is something that neither company takes lightly. Whether or not Xbox’s claims of PlayStation purchasing ‘blocking rights’ are true, the accusation is sure to fan the flames amongst both die-hard fanbases.