Sony is back to stressing how Microsoft’s acquisition of Activision Blizzard will affect its PlayStation business. In its letter to the UK’s CMA regulatory board, Sony wrote it’s at risk of “losing significant revenues” from Microsoft snatching up Activision franchises such as Overwatch and Call of Duty.
The complaints Sony is leveling at Microsoft are similar to those from the CMA and the European Commission that are also investigating the acquisition deal. It stressed that such a deal would be deeply unfair to non-Xbox owners, non-Microsoft owned developers, and Xbox competitors.
For those non-Xbox developers, Sony continued that Microsoft’s tactics would drive players towards the Xbox Game Pass subscription service. For those indie devs, their negotiations with Microsoft could also potentially be affected.
“Independent developers would likely receive worse terms for their content from Microsoft or even be required to promise exclusivity in return for distribution, thereby diminishing independent developers’ ability and incentive to invest in high-quality new games,” wrote Sony.
Similarly, Microsoft’s Xbox Game Pass having so many shooter franchises under its belt “would tilt demand for multi-game subscription services irreparably in Microsoft’s favor.”
But ultimately, Sony’s beef continues to center around Call of Duty. It warned that losing the franchise will “severely diminish SIE’s ability and incentive to invest in future hardware innovation and gaming technologies.”
Call of Duty has contributed to an unspecified large amount of third-party revenue for PlayStation, which Sony said was in the billions. The PlayStation maker warned that losing the revenue from that franchise would also greatly affect Sony’s first-party output and ability to form other third-party partnerships.
It’s the “next generation of PlayStation consoles” that would feel the Activision Blizzard loss harder than the PlayStation 5, Sony further argued. That console, when it releases, could be “extremely vulnerable to consumer switching and subsequent degradation in its competitiveness.”
Without hard numbers, it’s hard to determine how much truth there is to Sony’s dependence on Call of Duty. But it argued that trying to create a suitable competitor would take “many, many years and billions of dollars.”
Given that the recently released Modern Warfare II earned over $1 billion within a week and a half of release, the PlayStation publisher admitted to being uncertain of its ability to create a Call of Duty killer.
Citing the troubled release of EA’s Battlefield 2042, it said that creating a first-party rival to Activision Blizzard’s franchise “would more than likely be unsuccessful.”