Sony may truly be regretting their actions in light of the Microsoft – Activision deal, as the spotlight has now come on to them on the subject of video game exclusives.
Washington’s junior senator Maria Cantwell has spoken about Sony’s anti-competitive conduct in the video game industry, in a Senate Finance Committee hearing. As reported by PoliticoPro, she had this to say:
“I’m told that Sony controls a monopoly of 98% 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.”
Senator Cantwell also stated that Japan’s Fair Trade Commission was not doing their job investigating Sony’s actions and pressed U.S. Trade Representative Katherine Tai what she would do to address these issues.
Does all this sound serious? That’s because it absolutely is. The last time a US senator drew their attention to the video game industry, the industry established the ESRB, so that the government would not form a regulatory body themselves.
Kotaku reporter Ethan Gach mentions that this issue had to do about Final Fantasy 16 being a PlayStation 5 exclusive. But then that raises the question, where did Senator Cantwell even hear about all of this?
The answer is she read Curt Levey, a conservative attorney and president of the Committee for Justice. Curt had written on RealClearMarkets an article titled: Japan Colludes With Antitrust Regulators Against MSFT.
To paraphrase Levey, he accused Sony of regularly violating Japan antitrust laws while the JFTC looks the other way. He points out that Sony incentivizes game publishers not to bring their games to Xbox, and this has allowed PlayStation to control 95 % of the Japanese market for high end consoles (AKA excluding the Switch).
Levey also criticizes the FTC, accusing them of taking Sony’s side by suing Microsoft to prevent the deal. Levey reveals that the FTC’s current policy of blocking all big company mergers is harming US companies, but he goes one step further.
Levey accuses Sony of lobbying the FTC and EU heavily to get their desired outcome from the deal. Levey concludes that the combined actions of the JFTC and FTC are harming US companies, and also ordinary Americans. In his words:
“It may be fashionable in many circles to bash Facebook, Microsoft, and America’s other tech giants, but they employ hundreds of thousands of Americans, and provide much of the technological innovation that benefits American consumers. All of that is threatened by the status quo, in which the Biden administration does little to combat Japanese protectionism, while its FTC appointees and its competition policy generally treat American tech companies as the enemy.”
While Atty. Levey and Senator Cantwell fall under opposite sides of the political spectrum, it’s clear that Levey’s words found resonance in the senator’s ears.
US may be the land of opportunity, and that means allowing non-US companies to enter and do business. However, America also has to protect their own interests, and in this case, they may have been neglecting to regard what’s been going on in the video game industry.
There are certainly many more aspects of the industry that warrants the US government’s scrutiny, such as the way it treats its workers. But this whole thing certainly raises an interesting question. Is what Sony has been doing by signing deals for PlayStation exclusives harmful to America?
Before you dismiss this idea, consider Florian Mueller’s explanation on Twitter on how the way Sony does business really could be considered anti-competitive. Even though PlayStation allowed Fortnite into their store, Epic could have sued Sony instead of Apple.
That’s because Sony put harsher restrictions to Epic’s business than Apple’s outright ban on the App Store. Those restrictions include paying Sony for compensation every time a PlayStation player plays Fortnite on a different platform. Sony, alongside Nintendo, also has a policy that doesn’t allow purchases on Fortnite on their platforms to be available on other platforms.
These are things that gamers may have gotten so used to that we take it for granted. So we may have assumed that Sony was just allowed to do all this, but what if they weren’t supposed to?
Sony had better hope that this isn’t the start of some real legislative activity around the video game industry. If it comes to that, Microsoft buying Activision will be the least of their problems.