Microsoft claims Sony pays for ‘blocking rights’ to keep games off Xbox Game Pass

According to Microsoft, Sony pays to stop developers from adding their content to the game pass. The claims are part of a document that was filed with Brazil's national competition regulators.

In an August 9th filing to the Administrative Council for Economic Defense (CADE), Microsoft claimed that Sony wanted to prevent Game Pass growth. Blocks are paid by Sony to prevent developers from adding content to Game Pass.

Does this mean Sony is bad or that Microsoft is doing bad things? On both sides, the reality is more complex. Sony could be paying for exclusive rights for its own streaming services or it could have clauses in some publishing contracts that prevent some games from being published on rival subscription services.

Illustration by Alex Castro / The Verge

When rights for streaming and subscription services are involved, contracts for publishing games can be complex. Microsoft was considering lowering the revenue split for PC games in exchange for the grant of streaming rights to Microsoft, according to documents filed in the case.

Microsoft could have prevented some games from being available on rival streaming services if it had gone ahead with its plans. It depends on how publishing contracts are written, and both Microsoft and Sony secure game exclusives that involve timed releases, console exclusives, and lots of marketing dollars.

Microsoft is attempting to convince Brazil's CADE regulator that it should waive through the company's proposed acquisition of the video game publisher. The correspondence between Microsoft and the FTC is not public. In Brazil, public documents that give insight into the business competition between Microsoft and Sony are offered by the competition regulators.

Image: Microsoft

Posters on ResetEra highlight the juicy parts of the CADE documents that have been analyzed by XBOX and PSone fans over the past week. Sony and other Microsoft competitors have been asked about the acquisition. Sony said that it would be difficult for other developers to create a franchise that could compete with Call of Duty and that it stood out as a gaming category on its own.

Microsoft disagrees, and a number of other companies have highlighted competition to Call of Duty in the form of titles such as Battle Royale, Unreal Tournament, and more.

Adding content to the game pass will increase competition according to microsoft. Microsoft argues that the inclusion of high-quality content in Game Pass will not affect the ability of other players to compete in the market.

Sony hasn't responded to this particular point yet, but it's easy to imagine consumers picking that option to play titles like Call of Duty rather than paying $60 or more to purchase and own the game.

Image: Activision

It would not be profitable for Microsoft to not distribute games like Call of Duty at other stores. Microsoft said it will keep Call of Duty on the PS4. Microsoft says a strategy of not distributing games on rival consoles would only be profitable if the games attracted a high number of players to the Xbox platform.

It wouldn't be the first time Sony has used financial incentives to block developers. Sony implemented a crossplay revenue share for publishers that wanted to enable crossplay in their games, despite holding back PS4 cross- platform play for years.

Sony's cross- platform revenue share forced publishers to pay Sony a royalty whenever their players contribute more than a certain percentage to the bottom line of a cross- platform game. Sony was the only platform holder that required this compensation, according to Tim Sweeney.

We reached out to Sony to find out what they block. We don't expect either company to comment on the details. We will be watching the documents from Brazil to see if Sony responds to Microsoft.