When we talk about Microsoft and Sony in the same sentence nowadays, it is usually in connection with the acquisition of Activision Blizzard for 68.7 billion dollars. This time, however, it’s not directly about that (although this could be a tactic to get the deal approved in the US) but rather about Sony’s console operations in its home country of Japan, which Microsoft believes violates the US-Japan trade agreements.
The issue has been raised by several members of the US Congress who are pressuring the Biden administration to take action against it “imbalanced Japanese video game market, which we are concerned may be a result of a discriminatory trade practice that could violate the spirit of the U.S.-Japan Digital Trade Agreement”as stated in a letter signed by concerned members of Congress (thanks Axios).
The letter states that Sony has a 98 percent share of the high-end console market in Japan and that the company is signing agreements aimed at keeping Japanese games off Microsoft’s devices, which, if true, violates antitrust laws and would be “a serious barrier to U.S. exports with real impacts for Microsoft and the many U.S. game developers and publishers that sell globally but see their earnings in Japan depressed by these practices.”.
Microsoft’s use of the term “high-end console” does not include the Switch and thus excludes Nintendo from this conversation, likely a result of Microsoft and Nintendo seeming to be in good contact right now during the ongoing acquisition process of Activision Blizzard (where it is clear that Nintendo’s format will henceforth get the Call of Duty series ). Therefore, Microsoft does not want to drag another Japanese titan into these antitrust and trade agreement violation allegations.
After this letter, Katherine Tai, who represents the US Senate, has promised to investigate the situation, something that could have major consequences for Sony.
