Sony May Have to Reveal PlayStation Exclusivity Deal Details
The Federal Trade Commission (FTC) is currently suing to block Microsoft’s acquisition of Activision Blizzard and has initiated a legal discovery process. As part of this process, Microsoft has sent subpoenas to Sony, demanding that the company reveal internal documentation, emails, and records from its PlayStation unit. The request covers details of PlayStation exclusivity deals made after January 1st, 2019, including any agreements or fees that prevented publishers from placing their games on Xbox Game Pass.
Judge D. Michael Chappell, the chief administrative judge overseeing the case, has now ruled in favor of Microsoft’s request, saying that 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.”
Microsoft has accused Sony of paying for “blocking rights” to prevent developers from adding their content to Xbox Game Pass. The company claims that understanding the full extent of Sony’s exclusivity arrangements and their effect on industry competitiveness will assist in its defense.
This case is significant because details of exclusivity deals are rarely made public, and it could bring some of the secrecy in the games industry to light. The last time similar details were revealed was during the Epic Games vs. Apple case in 2021.
Legal Discovery Process Limits Requested Documents:
Microsoft had initially requested details of Sony’s deals dating back to 2012, but Judge Chappell deemed this request “excessive.” The judge granted Sony’s request to limit the applicable time for document requests to 2019 instead.
The FTC case is still in the document discovery stage, with an evidentiary hearing scheduled for August 2nd. Therefore, any new potential details will not be revealed until several months from now.
Microsoft’s Activision Deal Likely to be Approved:
In other news, the European Union (EU) regulators are expected to approve Microsoft’s acquisition of Activision Blizzard. The company’s binding 10-year agreement with Nintendo to bring Call of Duty to Nintendo platforms and a similar deal with Nvidia have reportedly convinced the European Commission to approve the acquisition.
However, Microsoft is still facing scrutiny from UK and US regulators. The Competition and Markets Authority (CMA) in the UK has proposed possible remedies, including forcing Microsoft to sell off Activision Blizzard’s business associated with Call of Duty.
The legal discovery process initiated by the FTC may force Sony to reveal details of its PlayStation exclusivity deals, including agreements that prevented publishers from placing their games on Xbox Game Pass. This case could bring some of the secrecy in the games industry to light, but we will have to wait until August for the evidentiary hearing to know more. Meanwhile, Microsoft’s acquisition of Activision Blizzard is likely to be approved by EU regulators, but the company still faces scrutiny from UK and US regulators.
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