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Sony executive says Microsoft-Activision gaming deal will hurt PlayStation

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Acquired by Microsoft Corp. on Activision Blizzard Inc. It would be a blow to Sony Group Corp’s console business. and would give PlayStation gamers a “degraded” experience, an executive at the Japanese electronics giant testified, bolstering the US Federal Trade Commission’s claim that the deal will stifle competition in the marketplace. .

“I think this deal is bad for competition,” said James Ryan, president of Sony Interactive Entertainment. His pre-recorded video was shown in federal court in San Francisco on Tuesday to a judge who must decide whether to suspend the deal while the FTC’s legal challenge to the deal begins.

Ryan said he expects Microsoft to use Activision’s popular Call of Duty title “in some way to harm us”, excluding shooter content from PlayStation by “total lockdown or partial lock”.

Ryan said this will result in “kind of a degraded experience” for PlayStation players playing Call of Duty. He added that Microsoft would use the game to “damage” Sony and direct PlayStation players to Xbox services such as Microsoft’s Game Pass game subscription program.

Ryan’s testimony could help the agency’s argument that the deal would hurt Microsoft’s competitors in the console and cloud gaming markets, which could allow games to be streamed to PCs and consoles rather than downloaded. The Federal Trade Commission (FTC) has said that Microsoft may shut down Activision games from PlayStation devices, which dominate the game console market.

The case is a major test of the FTC’s ability to block tech deals in court after the agency lost a takeover challenge to Meta Platforms Inc. earlier this year.

Overcoming the agency’s challenge would help Microsoft close its deal and take third place in the global gaming market after Tencent Holdings Ltd. and Sony.

Prior to Microsoft’s purchase of ZeniMax Media Inc., Ryan said. Valued at $7.5 billion in 2020, Sony hoped ZeniMax role-playing games like Starfield and the upcoming ElderScrolls 6 would be available on PlayStation.

The FTC is offering Ryan’s affidavit, filed in April of this year, to counter Microsoft’s decision last week by sharing an email from January of last year in which Ryan admitted in an email that the The deal was not an “exclusive game” to damage the PlayStation game console.

Microsoft’s Phil Spencer, who heads up Xbox games, swore in court last week that Call of Duty would still be available on PlayStation and said no decision had been made on whether Elder Scrolls 6 would be on. Playstation. Spencer sat in court at a table with Microsoft attorneys with a deadpan expression as Ryan’s testimony was displayed on a screen in front of him.

The FTC filed an email exchange three and a half years ago between Xbox Game Studios President Matt Botti and Xbox CFO Tim Stewart to try to show that Microsoft planned to use its deep pockets to hunt competitors in the game. Including Sony.

“We (Microsoft) are in a very unique position to put Sony out of business,” Booty said in a December 2019 email. “If we think video game content matters 10 years from now, we could look back and say, ‘We could have totally lost’, ‘$2 billion or $3 billion’ in 2020 to avoid the situation where Tencent and Amazon or even Google or even Sony became the Disney of gaming and owns the most valuable content.

The case is Federal Trade Commission v. Microsoft Corp., 3: 23-cv-02880, US District Court, Northern District of California (San Francisco).

— with the help of Leah Nilen.

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