The FTC case against Microsoft could unearth rare details on game industry exclusivity deals.
Sony might be forced to detail its PlayStation exclusivity deals and how much it pays for “blocking rights” to keep games off rival services like Xbox Game Pass. The FTC has sued to try and block Microsoft’s Activision Blizzard acquisition and kicked off a legal discovery process with Microsoft sending subpoenas to Sony to force it to reveal records, internal documentation, and emails from the company’s PlayStation unit.
Kotaku spotted that the FTC’s chief administrative judge D. Michael Chappell has now sided with Microsoft’s request for details of Sony’s PlayStation exclusivity deals. The request cover deals made after January 1st, 2019, including fees or agreements that prevented publishers from placing games on Xbox Game Pass. The judge’s decision comes after Microsoft previously accused Sony of paying for “blocking rights” to stop developers from adding their content to Xbox Game Pass.
Here are Microsoft’s latest claims, summarized in the word’s of Judge Chappell:
Microsoft argues that the Complaint in this case makes a number of allegations regarding high-performance video game console developers’ exclusivity arrangements with video game publishers. Microsoft states that it is aware that SIE requires many third-party publishers to agree to exclusivity provisions, including preventing the publishers from putting their games on Xbox’s multi-game subscription service, and that understanding the full extent of SIE’s exclusivity arrangements and their effect on industry competitiveness will assist in its defense.
“The nature and extent of SIE’s content-licensing agreements are relevant to the Complaint’s allegations of exclusivity arrangements between video game console developers and video game developers and publishers,” said Judge Chappell.
Microsoft had also been trying to get details on Sony’s deals dating back to 2012, but Judge Chappell labeled this “excessive,” and granted Sony’s request to limit the applicable time for document requests to 2019 instead.
It’s incredibly rare for details on such exclusivity deals to be made public, but the FTC case could open up some of the secrecy of the games industry in court hearings. The last time we saw similar details revealed by a court case was Epic Games vs. Apple in 2021. That case showed how Microsoft had explored reducing its Xbox store cut to shake up console gaming, how Sony had implemented cross-play platform fees, and that Fortnite was a PS4 cash cow.
The FTC case is still at the document discovery stage, with an evidentiary hearing scheduled for August 2nd, so we’re months away from seeing any potential new details.
Elsewhere, Microsoft’s Activision deal is likely to be approved by EU regulators. The combination of a binding 10-year agreement with Nintendo to bring Call of Duty to Nintendo platforms and a similar deal with Nvidia has reportedly convinced the European Commission to approve the acquisition. Microsoft still faces scrutiny from UK and US regulators though, with Britain’s Competition and Markets Authority (CMA) offering possible remedies last month that include forcing Microsoft to sell off Activision Blizzard’s business associated with Call of Duty.