06 Apr Sony pounces on Redfall exclusivity drama in latest response to Microsoft’s Activision acquisition
Slams CMA’s recently softened stance as “surprising, unprecedented, and irrational”.
Sony has issued a fresh response to the ongoing drama surrounding Microsoft’s $68.7bn Activision Blizzard acquisition, and criticised the UK regulator currently probing the deal for recently softening its stance. Sony’s statement also highlights the recent comments made by Redfall creative director Harvey Smith as fresh evidence of how Microsoft might mistreat Call of Duty on PlayStation if it were to own the first-person shooter series itself.
Last month, the UK’s Competition and Markets Authority softened its stance on a key area of its concern over the deal passing, as it concluded that Microsoft owning Call of Duty would not “result in a substantial lessening of competition” in the console market. Sony’s response to this decision, published publicly today, is unsurprisingly critical of this latest development, which it slams “surprising, unprecedented, and irrational”.
The response also leaps upon last month’s drama which erupted from comments made by creative director Harvey Smith, who revealed that Microsoft had canned plans for a PlayStation 5 version of Redfall after buying Bethesda. These comments, Sony has now said, were an indication of how Microsoft could also treat Call of Duty, if and when the deal goes through.
“Just last week, two days before the Addendum was published, on 22nd March, video game trade publication IGN published fresh evidence in the form of an interview with Redfall’s creative director, Harvey Smith, that provides additional insight into Microsoft’s strategy,” Sony wrote.
“Like Call of Duty, Redfall is a first-person shooter game that features both single player and cooperative multiplayer modes. In his interview with IGN, Mr. Smith explained that Redfall was originally planned to be released on all platforms, including PlayStation, but once Microsoft acquired Bethesda, there was a ‘huge sea change … [Microsoft] said, “No PlayStation 5. Now we’re gonna do Game Pass, Xbox, and PC”.'”
Smith’s comments revealed “compelling evidence of Microsoft’s ability and incentives to foreclose rivals to acquired games, together with its likely conduct post-transaction with respect to Call of Duty,” Sony argued.
Microsoft’s own carefully-worded response to these comments was that it had not “pulled any games from PlayStation” and that it had in fact “expanded our footprint of games” after releasing PS5 exclusives Deathloop and Ghostwire: Tokyo on Xbox.
Elsewhere in Sony’s response, the PlayStation maker highlighted a list of so-called “errors” in the CMA’s latest modelling on the deal’s potential effects. Sony claims the CMA’s model understates the amount of money to be made from highly-engaged Call of Duty fans who would make the switch from PlayStation to Xbox if Microsoft limited access to the game, and that the CMA’s study does not take into consideration the fact that once Microsoft owns Activision, it will no longer lose the typical cut of Call of Duty player revenues taken by a game’s publisher.
Sony takes issue with the CMA’s expectation that no users with less than 10 hours of gameplay or less than $100 of spending in Call of Duty would likely switch from PlayStation to Xbox if Microsoft limited Sony’s access to the game. This, Sony states, is simply “pure conjecture”.
Ultimately, Sony concludes that the CMA has understated Microsoft’s gains from the deal – as well as the gains to be made from having Call of Duty in Game Pass.
Indeed, Sony says the CMA has not fully considered the “ability and incentive” for Microsoft to partially degrade access to Call of Duty, something which it says “may in the short-term be more profitable and easier to implement (including because they trigger fewer gamer complaints) than total foreclosure (because Microsoft would still secure revenues from sales of Call of Duty on PlayStation for a transitional period while it degraded quality or access)”.
Sony argues the CMA had not proven Microsoft could still pull from Call of Duty from PlayStation if it wanted to, and that the CMA had not questioned some of the other reasons – beyond the financial – why Microsoft might profit if it did. For instance, limiting access to Call of Duty on PlayStation could help “expanding Game Pass”, Sony believes.
In another section of its response, Sony takes aim at Microsoft’s example of Minecraft as a game it has continued to support on all platforms after snapping it up.
“Minecraft does not drive anything like the level of gameplay, engagement, or purchasing decisions as Call of Duty,” Sony states, “it has substantially lower user engagement compared to Call of Duty; and it has limited impact on console purchasing decisions.”
Intriguingly, Sony uses the example of Microsoft limiting the ChromeOS version of Minecraft to its Education Edition as evidence of it blocking the game from a “rival platform”. (In what I’m sure is absolutely a complete coincidence, Microsoft last month suddenly announced the full version of Minecraft was now coming to ChromeOS. Huh!)
As you might expect, Microsoft has issued its own statement today which, by contrast, welcomes the CMA’s revised position.
“The Provisional Findings Addendum correctly confirms that Microsoft has no incentive to withhold or degrade access to Call of Duty,” Microsoft wrote. “As Microsoft has explained throughout the course of the CMA’s investigation, such a strategy makes no commercial sense and would result in Microsoft writing off billions from the deal value.”
The CMA is due to give its final decision on Microsoft’s Activision Blizzard acquisition later this month, on 26th April.