Congress has raised concerns about Sony’s monopoly on the gaming market in Japan, calling for an investigation into the firm’s alleged “exclusionary conduct.”
Senator Maria Cantwell told a Senate Finance Committee hearing: “Sony controls a monopoly of 98 percent of the high-end game market, yet Japan’s government has allowed Sony to engage in blatant anti-competitive conduct through exclusive deals and payments to game publishers.”
Cantwell called on US Trade Representative Katherine Tai to investigate the issue and create a level playing field.
Tai responded that the Indo-Pacific Economic Framework for Prosperity (IPEF) would cover any competition and digital issues, but declined to comment directly on Sony.
Two letters have been sent to Tai and Commerce Secretary Gina Raimondo by lawmakers, one from Democrats and one from Republicans. The letters call for an investigation into Sony’s practices.
The Republican letter alleged that Sony signs deals designed to keep Japanese games from Microsoft’s Xbox, which “may violate Japan’s antitrust laws.”
The letter suggests that the Japanese government’s non-prosecution policy when it comes to Sony is a barrier to US exports, with “real impacts for Microsoft and the many US game developers and publishers that sell globally but see their earnings in Japan depressed by these practices.”
Microsoft is, of course, currently under intense regulatory scrutiny over its $69 billion takeover bid for Activision Blizzard. Microsoft believes the acquisition will help Xbox compete against PlayStation’s first-party studios, IPs, and exclusives.
Provisional findings from the UK’s CMA said Microsoft’s takeover would “not result in a substantial lessening of competition in relation to console gaming in the UK”. The conclusion was reached after receiving a “significant amount of new evidence” after the CMA initially raised concerns.
“Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action,” said Martin Coleman, chair of the independent panel of experts conducting the CMA’s investigation.
Today, Japan’s trade regulator – the JFTC – gave its go-ahead to Microsoft’s takeover:
The ongoing proceedings relating to the two major gaming platform holders will be closely watched by the entire industry.
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