The console wars are heating up. This comes after Microsoft made a claim that Sony has paid for “blocking rights” in order to stop developers from adding their content to Xbox’s Game Pass subscription service. It’s all part of a recent document filed with Brazilian competition regulators that are reviewing Microsoft’s attempted acquisition of Activision-Blizzard.
“Microsoft’s ability to continue expanding Game Pass has been hampered by Sony’s desire to inhibit such growth,” claims Microsoft in the August 9th filing, as translated from Portuguese to English. “Sony pays for ‘blocking rights’ to prevent developers from adding content to Game Pass and other competing subscription services.”
As The Verge puts it, it’s not totally clear what Microsoft is referring to since publishing contracts are incredibly complex, especially when it comes to streaming rights and subscription services. However, it’s obvious that Microsoft is trying to convince regulators that they should approve the company’s proposed Activision-Blizzard acquisition.
Microsoft has been doing everything in its power to try and get this deal pushed through. In fact, late last month, the organization told New Zealand regulators that there is “nothing unique” about Activision-Blizzard in an attempt to get the deal approved.
The Profit‘s Take:
It’s hard to deny how successful Game Pass has been so far. Sony is clearly NOT working to create a competitive product. Instead, they’re spending money to keep people OFF of Game Pass. This reminds me of YouTube Gaming’s strategy. “We’re paying people, not because we think we’re the better platform, but rather, we want to keep eyes off of Twitch.” It feels like Sony is playing defense, which is weird to do in a growth space. Sony is more than capable of playing offense. The better approach for Sony would be, “come here, and we’ll make sure your game is successful because we have the best platform/subscription service.” One of two things is going to happen here. Game Pass will continue to grow, and Sony will run out of money to keep developers off the platform. Or, Sony will keep enough good titles off of Game Pass resulting in the service’s growth to plateau or even decline. In my opinion, this strategy doesn’t seem all that well thought out. It’s a reaction to the other guy doing something well. They should instead have conviction in their own strategy and product offering.