In a nutshell: Sony recently expressed concerns that Microsoft's acquisition of Activision Blizzard could cause serious harm to the market if Call of Duty or other Activision games became exclusive to Microsoft's platforms. Microsoft's latest response refutes that assertion, accuses Sony of being afraid of Game Pass, and calls the PlayStation manufacturer hypocritical in light of its exclusivity deals.
This week, Microsoft sent a lengthy defense of its Activision Blizzard acquisition to Brazil's Administrative Council for Economic Defense (CADE). It mainly says that Sony's fears of anticompetitive exclusivity practices are unfounded.
Last week, many large game companies, including Sony, responded to an inquiry from CADE, one of many international competition regulators scrutinizing the Microsoft-Activision deal. Sony told CADE that it thinks Call of Duty would be irreplaceable if Microsoft ended the development of PlayStation versions — that no other developer or publisher could release a game that competes on the same level.
Microsoft disagreed and reiterated its intention to keep future Activision Blizzard games like Call of Duty, Diablo 4, and Overwatch 2 on PlayStation. Furthermore, it claimed that making such games exclusive wouldn't attract enough new customers to Xbox to compensate for lost sales of PlayStation versions. Microsoft still supports PlayStation and Nintendo Switch versions of Minecraft, recognizing it is bigger than Xbox could ever be.
Sony's and Microsoft's comments to CADE raise the question of how much competition Call of Duty has. Its free-to-play Battle Royale mode — Warzone — has plenty of rivals like Fortnite, Apex Legends, and PUBG. The landscape is less clear when comparing rival games to Call of Duty's other multiplayer modes or solo campaigns. Battlefield is the most obvious competitor, but its most recent entry — Battlefield 2042 — lacks a single-player narrative and received a cold reception from players and critics.
Rainbow Six Siege is another popular military-themed multiplayer shooter, but its gameplay style doesn't overlap perfectly with Call of Duty. Microsoft highlighted other companies' remarks questioning the usefulness of genre categories to CADE. For example, Overwatch may compete with Apex, Siege, Valorant, or Team Fortress 2 (the last two of which aren't on PlayStation), despite all being different combinations of hero shooters, tactical shooters, and battle royale games.
However, Sony didn't say that no other company could make a game like Call of Duty, only that they can't replicate Call of Duty's brand. It has easily been the top-selling premium-priced first-person shooter for several years (though its biggest competitors nowadays are free-to-play).
Machine translation from Portuguese
In addition to stating it won't make Call of Duty exclusive to Xbox anytime soon, Microsoft called out Sony's deals to keep games like Deathloop, Ghostwire Tokyo, and the Final Fantasy VII remake off Xbox. Deahtloop and Ghostwire are from Bethesda, which Microsoft acquired after Sony struck those deals.
Microsoft also called out Sony's fears that putting Call of Duty and Blizzard games on Game Pass would represent a "tipping point," drawing customers away from retail PlayStation purchases. The company claimed Sony is afraid that a subscription service, representing a new business model, would threaten its dominance in traditional console game distribution.
Sony recently responded to competition from Game Pass by completely restructuring PlayStation Plus and PlayStation Now into a multi-tiered service. However, Microsoft insinuated Sony's refusal to include its latest in-house releases like Horizon Forbidden West or Gran Turismo 7 in the subscription indicated hesitance to commit fully to the business model.
Additionally, the Redmond company explained that acquiring Activision Blizzard doesn't give it anywhere close to monopolistic market share in any corner of the gaming sector. It claims that it and Activision Blizzard each have no more than a 10-percent slice of the game development pie. Furthermore, while Microsoft has over 30 percent of the console game digital distribution market, Sony has over 50 percent.
Call of Duty's uniqueness and importance in the market is up for debate, but it seems unlikely that buying Activision Blizzard would give Microsoft an unfair advantage.