”Sony is completely dominant”: Microsoft shows market conditions in Europe and Japan
The dispute over Microsoft’s Activision Blizzard deal is entering the next round. Following a closed hearing between Microsoft and the European Commission, the company spoke to the press in Brussels and argued why it sees itself at a disadvantage compared to Sony and why the deal should go ahead.
Microsoft sees itself at a disadvantage compared to Sony
The EU, Britain and the United States have doubts as to whether the deal could lead to distortion of competition. Microsoft President Brad Smith has therefore come up with an argument to justify the Activision deal.
What arguments does he present? According to him, Sony has a much higher market share than Microsoft. In Europe, Sony is ahead with 80 percent, in Japan even with 96 percent. Globally speaking, no more than 30 percent of the cake is left for Microsoft. At the end of 2022, Sony has beaten Microsoft by 69 to 31 percent.
Microsoft deal with Nintendo and NVIDIA brings CoD to more devices
Also, Smith doesn’t understand Sony’s reasoning that Call of Duty is a “must buy” title. Call of Duty is currently only accessible for 120 million devices, after the deal there will be 150 million more devices.
The reason for this is that Microsoft negotiated deals with Nintendo and NVIDIA. Call of Duty should appear on Nintendo’s home consoles for the next ten years, and all Xbox games should even be available for the NVIDIA cloud gaming service GeForce Now.
What Microsoft doesn’t mention is that the percentage ratio completely ignores Nintendo. With over 100 million Switch units sold, the console maker plays a big role in the global market, even if they have little presence in the shooter space.
Also, while the market share comparison is valid, as a large company, Microsoft far outstrips Sony. The Xbox segment alone could not have afforded the Activision deal at the moment.
For comparison: In fiscal year 21/22, Sony had sales of $88 billion, compared to $198.3 billion for Microsoft.
When will the deal be decided? The European Commission now has until April 11, 2023 to think about the deal. Then we will know if the deal will be vetoed and the takeover could possibly be prevented.
What do you think of Microsoft’s chain of arguments?