Call for Investigation
Democratic Senator Maria Cantwell has raised concerns about Sony’s alleged monopoly in Japan’s high-end gaming market. She accused Japan of allowing Sony to engage in anti-competitive conduct through exclusive deals and payments to game publishers, resulting in the establishment of popular games in Japan. Cantwell called for US trade representatives to discuss the issue with Japan as part of ongoing digital trade negotiations.
US Members of Congress are worried about Sony’s monopoly over the high-end games market in Japan. Sony controls 98% of the high-end game market in Japan, according to Cantwell. Cantwell also accused Sony of engaging in blatant anti-competitive conduct through these exclusive deals and payments to game publishers. Moreover, the Japanese Fair Trade Commission has failed to investigate these exclusionary conduct.
Pressure on Biden Administration
Members of Congress from both parties are urging the Biden administration to take action on the competition between PlayStation and Xbox in Japan. Policymakers have raised concerns over Sony’s business practices in Japan, which they claim are blocking US companies from competing in the Japanese gaming market and could potentially violate US-Japan trade deals.
A letter signed by Republicans claims that Sony PlayStation has 98% of the high-end console market in Japan and signs deals to keep hit Japanese games from Microsoft’s Xbox. A separate letter from Democratic lawmakers from Washington state, where Microsoft is based, covers similar ground.
Moreover, house members are asking for the issue to be raised with the Japanese government and identify additional barriers to American companies accessing the Japanese gaming market. The U.S.-Japan Digital Trade Agreement requires non-discriminatory treatment of digital products, including games. However, it is unclear if it pertains to game consoles.
Microsoft’s Support
Microsoft spokesperson David Cuddy said that Sony’s anti-competitive tactics deserve discussion, and they welcome further investigation to ensure a level playing field in the video game industry. Microsoft has been struggling with low market share in Japan historically. Cantwell’s call for investigation comes at an interesting time as Microsoft’s proposed acquisition of Activision Blizzard is triggering many debates about anticompetitiveness.
Sony’s Advantage Over Xbox
Sony’s advantage over Xbox in Japan has existed for decades, and while the reasons are unclear, Sony occasionally secures major platform exclusives. However, this discussion seems to ignore the existence and prevalence of Nintendo in the Japanese market, which has also secured its place amidst competition from Sony.
Conclusion
The pressure on Sony to address anti-competitive conduct and create a level playing field in Japan’s gaming industry is growing from both political parties in the United States. Whether the Biden administration will take action on this issue remains to be seen. Nevertheless, Cantwell’s call for investigation and letters sent by members of Congress indicate that the US government is watching closely.
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