Sony will not compromise on its opposition to the Microsoft-Activision deal
Microsoft has once again proposed a ten-year licensing agreement with Sony in order to placate British regulators concerned about the Windows giant’s proposed $69 billion acquisition of Activision Blizzard. However, Sony is not having any of it.
Microsoft cited previous arguments it has made to justify the purchase in the US and EU, namely that it would actually be beneficial to fans by making its games more accessible and more affordable, in a document [PDF] published by the UK’s Competition and Markets Authority (CMA).
In its response to the CMA’s February remedies notice, Microsoft also stated that it had previously proposed a package of remedies with Sony to guarantee that the popular Call of Duty game would be licensed for ten years for PlayStation release.
The software giant pleaded in its statement, Microsoft believes that the criteria for the CMA to consider behavioral remedies are met in this case.
Sony argued in its own response [PDF] to Microsoft’s proposal and the remedies notice that the proposed deal did not guarantee fair competition.
[Sony Intelligent Entertainment] is very distrustful that a concurrence with Microsoft could be reached, considerably less observed and upheld successfully, Sony pronounced.
Microsoft could, according to the maker of the PlayStation, violate the spirit of such an agreement by throttling PlayStation customers’ access to services or by raising the prices of Microsoft games on platforms or streaming services it does not control.
Additionally, Sony suggested to the CMA that the merger be blocked or subjected to a structural remedy rather than a behavioral one due to Microsoft’s history of non-compliance with behavioral commitments.
A Microsoft spokesperson reiterated the company’s position that the merger and Sony’s consent would be beneficial to consumers and the market in response to questions about the company’s willingness to accept the deal.
According to a Microsoft representative, The decision now lies with the CMA on whether it will block this deal and protect Sony, the dominant market leader, or consider solutions that make more games available to more players.
Everyone is a little bit guilty of being exclusive. In July, the CMA began its investigation into the merger of Microsoft and Activity. By September, it seemed pretty sure that the buyout would hurt gamers because it would put the company that makes one gaming platform in charge of popular cross-platform games like Call of Duty and World of Warcraft.
The CMA issued the remedies notice a month ago to suggest means by which Microsoft could persuade it that the merger would, in fact, limit gamer options and possibly result in higher prices.
While trying to ease concerns, Microsoft president Brad Smith invested energy last month traveling around Europe attempting to persuade the EU and UK legislatures that it was ready to do anything it took to get the Acceptable for the consolidation. Similar to its proposed agreement with Sony, the Xbox maker announced agreements with Nvidia and Nintendo to share games between the various platforms, such as the GeForce Now and Switch.
Microsoft’s concessions reportedly pleased the EU, but Sony continues to fight the marriage in the United Kingdom and the United States, where the Federal Trade Commission has also filed a lawsuit to prevent the merger.
Since December, Smith has reportedly been attempting to persuade Sony to sign the ten-year agreement. Smith has previously criticized any attempt to restrict Call of Duty on PlayStation consoles for economic reasons. According to reports, he has even begun to carry the contract with him whenever he meets a Sony executive who has changed his mind.
Sony is unlikely to change its mind after sending the CMA its response to Microsoft. Therefore, Microsoft is still a one-three chance of even receiving a maybe from regulators.
The CMA has until April 26 to publish its final report. The matter is currently in court in the United States, where a judge recently sided with Microsoft to force Sony to hand over internal documents pertaining to exclusivity deals as part of the case’s discovery. These documents include agreements to keep games off of Xbox Game Pass.
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