It wouldn’t have fit in the title, so here are the details: according to Microsoft, Sony Interactive Entertainment president and CEO Jim Ryan allegedly says that one of Activision Blizzard King’s important franchises would not have been an exclusive…
We recently reported that the US Federal Trade Commission, the FTC, had asked the court to suspend the transaction between Microsoft and Activision Blizzard King using a temporary restraining order. Microsoft’s lawyers filed the Redmond-based company’s opposition. According to them, Ryan was immediately sure that Call of Duty, the jewel of the publisher Microsoft wants to acquire, would not have been Xbox-exclusive. Ryan’s quote is censored in the document, as it is not a public statement, so it is not known whether Microsoft is telling the truth:
“First, no evidence supports the FTC’s central theory that Xbox will take COD away from PlayStation. The FTC does not cite a single document or witness, even suggesting this will happen. On the contrary, Jim Ryan, the CEO of Sony Interactive Entertainment (“SIE”) and the chief commercial opponent of this deal, said privately on the day it was announced [redacted],” Microsoft wrote. If Ryan (who has expressed in several of his manifestations that he is living in a dream world) did say it, it would strongly overshadow Sony’s public opposition. When asked to comment to the Brazilian authorities, Sony said that Activision Blizzard King’s franchise would be irreplaceable (and since then, that regulator has given the go-ahead for the $68.7 billion deal…).
Ryan had earlier rejected Microsoft’s initial three-year offer, who then came up with a ten-year deal offered to Steam (Gabe Newell didn’t feel the need to sign it), Nintendo (who agreed), and Sony (who rejected it). Microsoft’s lawyers also pointed out that regulators worldwide believe the theory of harm to competition in the console market should be rejected: “Withholding COD would harm Xbox. It would contradict the valuation the Board relied on in approving the deal, which assumed profits from continued PlayStation sales. It would cut off a highly lucrative income stream to one of Microsoft’s. And it would make COD a worse game and enrage the gaming community because much of the game’s popularity stems from how it brings together players who use competing consoles. It is therefore unsurprising that every single worldwide regulator that has examined the deal other than the FTC has rejected this theory—including both the European Union and the UK’s Competition and Markets Authority (“CMA”).”
The CMA is blocking the transaction by referring to the cloud market. The FTC has brought an antitrust suit against Microsoft on the grounds of potential harm to the console market, who added that even if the 10-year agreement were to end, after which Call of Duty were to leave the PlayStation Network, Sony’s economic advantage in the console market would not be much diminished. No court would block a merger to protect the position of a dominant player. There has also been talk of Nintendo Switch and Steam being successful for years without Call of Duty, which goes against Sony’s statement. Xbox boss Phil Spencer is also keen to close the deal because the mobile market is the biggest market ahead of PCs and consoles. And, as we suspected earlier, Redmond’s lawyers have also added a comment from Sony CEO Kenichiro Yoshida on the importance of the cloud market…
The court will hear the case on June 22.
Source: WCCFTech
