During a hearing before the European Commission, a Microsoft representative argued that Sony completely dominates the console market and therefore blocking the Redmond giant’s merger with Activision Blizzard harms the competitiveness of the entire industry.

Microsoft faces many problems in its proposed acquisition of Activision Blizzard. The European Commission, for example, has doubts. Yesterday, the European body held a secret hearing during which the giant of Redmond exposed its position. In it, its representatives, including Vice President Brad Smith, outlined a vision of a market so heavily dominated by Sony, that protecting the position of the Japanese conglomerate by blocking the acquisition of a publisher does not make sense, according to Microsoft.

  1. According to Microsoft, Sony would control 70% of the global console market, while the Xbox brand would represent only 30%. As you can see, Nintendo’s position is omitted here, but that makes sense (and helps MS’ argument, by the way), because the Nintendo Switch as a weak hybrid console is nonetheless a category of slightly different device.
  2. In Europe, Sony’s dominance is expected to be even greater, with PlayStation accounting for 80% of the market. In Japan, it’s 96%.
  3. It is important to note that the market share of Sony consoles has remained stable over the past two decades. Even last year, when the Japanese conglomerate had major manufacturing issues, the PlayStation 5 accounted for 69% of next-gen consoles sold, while the Xbox X Series and Xbox S Series only accounted for 31% of the market.
  4. These numbers, according to Microsoft, are meant to show that the console market needs more competition.
  5. The Microsoft representative also added that it is not the job of regulators to protect the market position of companies they already dominate.
  6. Microsoft is trying to assuage the concerns of these authorities by signing agreements with competitors. The Redmond giant recently guaranteed Nintendo that it would release future Call of Duty episodes on its consoles for 10 years (depending on the success of the deal). This is interesting because no episode of the series has been released on Switch so far. Thus, the manufacturer Xbox advances that with the acquisition of Activision Blizzard, the brand will be able to return to Nintendo devices.
  7. A similar deal was signed with Nvidia, in which Microsoft agreed to publish all of its games available on its own xCloud service on the GeForce Now streaming service.

How did it start and what are the concerns?

Microsoft has announced its intention to acquire Activision Blizzard in early 2022. So far, approval for the purchase has been granted by, among others, Brazilian government agency CADE (Administrative Council for Economic Defense) and similar authorities in Saudi Arabia and Serbia. . However, regulators in the United States, the European Union and the United Kingdom have their doubts.

Concerns include what advantage Microsoft’s control over the Call of Duty brand might give it. According to Sony, preventing the series from being released on PlayStation consoles could see a large group of gamers switch to Xboxes. However, the Japanese company is unwilling to sign a deal that guarantees CoD will be released on PlayStation for the next 10 years.

The second doubt concerns the transmission of games. Making Activion Blizzard games exclusive to xCloud could leave the competition out of luck. That’s why Microsoft has reached an agreement with Nvidia to publish its games on GeForce Now.

  1. Microsoft – official site
  2. Activision Blizzard – official site

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