Sony pays ‘blocking rights’ to keep titles off Xbox Game Pass: Microsoft

Microsoft has accused Sony of paying for “blocking rights” to keep games off services like its own Xbox Game Pass.

The Redmond, Washington-based tech giant made the claims in documents filed with Brazil’s national competition regulator as part of a review of its pending acquisition of Activision Blizzard.

“Microsoft’s ability to continue expanding Game Pass has been hampered by Sony’s desire to inhibit such growth,” Microsoft claimed in an August 9th filing to the Administrative Council for Economic Defense (CADE), as translated from Portuguese. “Sony pays for ‘blocking rights’ to prevent developers from adding content to Game Pass and other competing subscription services.

Sony is arguing that Microsoft’s planned acquisition of Activision Blizzard would be anti-competitive, specifically arguing that it could pull Call of Duty players — a large and lucrative audience — from PlayStation to Xbox. In particular, Sony says Microsoft would do this by making Call of Duty available on its popular Xbox Game Pass service. In response, Microsoft has brought up the purported Sony “blocking rights” while also reiterating plans to continue to release Call of Duty on PlayStation should the acquisition be approved.

It should be noted, though, that specifics regarding Sony’s alleged “blocking rights” deals were not provided, so it’s unclear whether they’re supposedly short-term (i.e. one year) or more long-lasting. We do know, however, that exclusivity deals for games have grown increasingly complicated amid the advent of streaming services. For example, during the major Epic Games v. Apple trial over the past two years, it was revealed that Microsoft was looking into lowering its PC games revenue split in exchange for securing streaming rights.

In any case, this is just another variation on the time-old business strategy of exclusivity, which PlayStation, Xbox and Nintendo all take part in. To that point, VentureBeat‘s Jeff Grubb, a credible industry insider, responded to this “blocking rights” news by stating that “this is what exclusivity is” when it comes to games.

“Companies almost never pay to make a game truly exclusive, they instead pay to keep a game off of one console,” he said. “Or Epic pays to keep a game off of Steam, but you can get it everywhere else.”

This is what exclusivity is. Companies almost never pay to make a game truly exclusive, they instead pay to keep a game off of one console. Or Epic pays to keep a game off of Steam, but you can get it everywhere else. https://t.co/hm4v9NIZtF

— Grubb (@JeffGrubb) August 10, 2022

Responding to a tweet from The Verge‘s Tom Warren that this “doesn’t feel like the ‘traditional’ concept of exclusivity,” Grubb added that “none of this is the traditional idea of ‘exclusivity.'” Instead, he says, “companies [are] just trading specific favors for cash in an attempt to position themselves as best as possible.”

Looking at what game companies have been doing in recent years, it’s easy to see what Grubb means. By and large, the platform holders have been paying to have titles debut first on their consoles before they can eventually release elsewhere. With Xbox, this has been the case with games like Cuphead, 12 Minutes, Below, Nobody Saves the World! and The Medium, which all came to PlayStation and/or Nintendo consoles at later dates. Similar situations have happened with PlayStation with the likes of Persona 5, Final Fantasy VII Remake, Death Stranding, Nier Automata and Bugsnax.

Otherwise, “traditional” exclusives — games that permanently remain on a single console or family of consoles — tend to come from studios that these publishers own, like God of War (PlayStation’s Sony Santa Monica), Halo Infinite (Xbox’s 343 Industries) or The Legend of Zelda: Breath of the Wild (Nintendo EPD). There are also special instances in which a once-multiplatform series becomes exclusive because a publisher stepped in to foot the bill, like Nintendo helping to fund Bayonetta 2 and 3 and Marvel’s Ultimate Alliance 3, which were then only released on Nintendo platforms.

The biggest question, then, is whether Microsoft’s acquisition of Activision Blizzard — a company caught up in its fair share of controversies — will ultimately be approved and, if so, what the wider implications for the gaming industry will be.

Via: The Verge