Sony Hurts Xbox in Japan, US Politicians Claim [Update]
For many months we have been watching the dispute between Microsoft and Sony unfold. The Japanese oppose the merger of the Redmond giant with Activision Blizzard for fear of it monopolizing the game market. Meanwhile, U.S. politicians are drawing attention to an interesting aspect of the issue.
Update #2: The US Congress has issued a letter against Sony and Japan. In it, it accuses Japan of violating regulations of the Indo-Pacific Economic Framework. The contents read, among other things: "Sony pays third-party game publishers not to make their content available on Xbox and systematically negotiates exclusivity agreements that make the most popular games in Japan unavailable on Xbox." The full text of the letter can be found here.
Update #1: Meanwhile, Japan's trade commission has approved the purchase of Activision Blizzard by Microsoft, as reported by, among others. The Verge journalist Tom Warren.
As it turns out, antitrust proceedings can be a double-edged sword. While the long months-long vicious court-court battle over Microsoft's acquisition of Activision Blizzard drags on, the Xbox maker's biggest competitor, Sony, is accused of violating the same rules in its own "backyard." U.S. congressmen have pointed out the huge advantage of PlayStation consoles over the Redmond company's devices in Japan.
Sony's unhealthy dominance in Japan
The matter was publicized by 11 Republican congressmen. It all started a few days ago, when Senator Maria Cantwell brought out the heavy guns during a discussion with US Trade Representative Katherine Tai, describing Sony as the dominant player in the market for "high-end consoles."
According to the politician the Tokyo-based company has a grip on as much as 98% of the Japanese market, preventing Microsoft from taking on healthy competition. They forwarded the relevant documents to the aforementioned Trade Representative and Secretary of Commerce Gina Raimondo, expecting a clear response.
Are the Japanese breaking the law?
The materials contains opinions that Japanese politicians are deliberately not initiating criminal proceedings against Sony, which is expected to have a direct impact on Microsoft's financial losses.
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In addition, the politicians arguing Sony's market violations in Japan cite Article 8 of the 2019 US-Japan Digital Trade Agreement in their materials. It speaks of "non-discriminatory treatment of digital products."
Here, however, there is a problem - while video games can be considered a product that falls under this document, it is quite difficult to consider consoles as such.
What about Mario and co.?
It is also interesting to note that in the materials prepared by the 11 Republicans lacked any mention of the company that at this point outclasses both Microsoft and Sony in the field of console sales. We are, of course, talking about Nintendo.
With the Switch, the Kyoto-based company tops both Xbox and PlayStation in sales, yet its name does appear in the discussion, helped by the use of the slogan: "high-end consoles." One can conclude that congressmen are primarily interested in hitting Sony and, as it were, to retaliate for that company's attacks on Microsoft.
Positive reaction from the Redmond giant
This does not change the fact that it's a nice change of pace for Microsoft. After all, the company has long been accused of antitrust violations. In such a position, it is not surprising that representatives reacted positively to the initiative of a group of Republican politicians.
Microsoft spokesman David Cuddy, in an interview forAxios stated that discussion of Sony's unfair behavior in the Japanese market is necessary, and expressed satisfaction that the issue was raised. He further added that his government affairs team had discussed the materials with members of Congress.
For its part Sony has not commented on the matter at this time. Time will tell how the issue will develop and whether the arguments of Republican politicians will find applause from members of the Joe Biden administration.
