The Brazilian Administrative Council for Economic Defense (CADE) said it believes PlayStation could still be competitive with Xbox even if Call of Duty becomes exclusive to Microsoft’s platform.
On Wednesday, the country’s competition watchdog said it had approved Microsoft’s proposed $68.7 billion merger with Activision Blizzard without any restrictions.
Explaining his reasoning for the decision, CADE seemed to imply that Sony can have no reason to complain about a potential exclusive given that exclusive content has played a part in the PlayStation’s success.
“Investment in exclusive content is, and always has been, very important to the competitive dynamics of the console segment,” CADE’s report states.
“Exclusive content was, quite possibly, one of the main factors responsible for positioning PlayStation as a leader in the global console market for more than two decades, a leadership that continues to this day.”
CADE then claimed that even if the deal ultimately resulted in PlayStation losing access to Activision Blizzard content, including Call of Duty, Sony would still have the means to remain competitive – as Nintendo managed to do without have the hit FPS series on its consoles.
“With the acquisition of a publisher such as Activision Blizzard, and given the (theoretical) risk of the company’s content becoming exclusive to Xbox, it is likely that the eventual conclusion of the transaction will give Microsoft an advantage considerable competition in the console business,” it said.
“However, CADE does not see that such an advantage represents a risk of closing this market to current competitors. As already discussed, Nintendo does not currently rely on any content from Activision Blizzard to compete in the market.
“In turn, Sony has several predicates – the strength of the world’s leading brand for over 20 years, extensive industry experience, the largest user base, the largest installed base of consoles, a robust catalog of exclusive games, partnerships with several third-party publishers, brand-loyal consumers, etc. – which should help maintain PlayStation’s competitiveness in a possible post-transaction scenario, even in the face of the possible loss of access to content from Activision Blizzard.
The report concludes that CADE’s role was to determine whether the acquisition would harm competition in the video game industry as a whole, not to address PlayStation’s concerns alone, and that in its view, that would not be the case.
“It is important to emphasize that the central objective of CADE’s activities is the protection of competition as a means of promoting the well-being of Brazilian consumers, and not the defense of the particular interests of specific competitors”, he said. Explain.
“In this sense, while it is recognized that some PlayStation users may decide to migrate to Xbox in the event that Activision Blizzard games (notably Call of Duty) become exclusive to the Microsoft ecosystem, CADE does not believe that such a possibility represents, in itself, a risk for competition in the console market as a whole.
The Brazilian regulator was one of the first to publicly share its correspondence around the merger, including unprecedented access to Q&As from companies including Sony, Ubisoft, Amazon and Google.
Its decision follows that of Saudi Arabia’s General Competition Authority, which said in August that it had “no objections” to the proposed takeover of the games industry.
According to a report released on Tuesday, the US Federal Trade Commission (FTC) could rule on Microsoft’s proposed acquisition of Activision Blizzard by the end of November.
Meanwhile, Britain’s competition regulator announced on Tuesday that it had set March 1, 2023 as the deadline for publishing the findings of its investigation into the deal.
