In a document sent to the Administrative Council for Economic Defense of Brazil (CADE) discussing the proposed acquisition of Activision Blizzard, Microsoft argues that concerns that Call of Duty becomes exclusive to Xbox and no longer published on PlayStation are unfounded since currently this wouldn’t be profitable for Microsoft.
“No matter how surprising the Sony’s critique of content exclusivity – given that the entire strategy of the PlayStation was focused on exclusivity over the years – the reality is that making Activision Blizzard games exclusive by not distributing them on rival consoles would simply not be profitable for Microsoft.
“Such a strategy would only be profitable if Activision Blizzard games were able to attract a sufficiently large number of players to the Xbox console ecosystem and if the Microsoft could earn enough from the sales of games to compensate for the losses resulting from the no distribution of these games on rival consoles“, adds the company.
“As if that were not enough, exclusivity strategies involve specific costs for the titles”, says the document: however, other information was omitted, probably for reasons of confidentiality. “These costs, added to the estimated lost sales […] above, indicate that Microsoft would not be able to make up for the losses by earning more revenue in the Xbox ecosystem as a result of implementing the exclusivity.”
“This is especially true when you consider (i) the ‘player-centric’ strategy – as opposed to the ‘device-centric’ strategy – that Microsoft experimented with with Game Pass and (ii) the fact that the PlayStation has users to stay loyal through its various generations”.
Continuing to support its argument, Microsoft says that even if Call of Duty Xbox exclusivity proves profitableits implementation “would have no impact on competition”, in part due to “intense competition in the publishing market. are commonly adopted in the gaming industry and the fact that rival consoles enjoy a high degree of player loyalty.
“In summary,” the document concludes, “the hypothetical adoption of any content interruption strategy would be unprofitable for Microsoft, and even if implemented, such a strategy would have no impact on competition for the reasons outlined above.”
By this statement, Microsoft was surprised at Sony for attacking the “exclusivity” argument as it has been doing this practice for years, and did not expect this to be seen as a negative by it. Besides that, currently, Call of Duty will be multiplatform, unless Microsoft hypothetically reached a base that would also supply the Playstation, in which case it believes that making Call of Duty would not generate an impact on the competition since Sony also always adopted this practice.