In an intriguing turn of events, a bipartisan group of Congressional members is urging the Biden administration to address concerns regarding the gaming console competition between PlayStation and Xbox in Japan. The lawmakers believe Sony’s business practices in its home country may be preventing U.S. companies from gaining a foothold in the Japanese gaming market, possibly violating U.S.-Japan trade agreements.
Last week, policymakers voiced their apprehensions to Biden officials. The issue gained public attention when Senator Maria Cantwell (D-Wash.) questioned U.S. Trade Representative Katherine Tai during a trade hearing. Additionally, ten House members penned two letters to Tai and Commerce Secretary Gina Raimondo, calling for action on the matter.
One letter, signed by four Republican House members, emphasizes that Sony PlayStation holds a staggering 98% of the high-end console market in Japan.
The letters highlight the seemingly lopsided Japanese video game market and suggest discriminatory trade practices could be at play. One letter, signed by four Republican House members, emphasizes that Sony PlayStation holds a staggering 98% of the high-end console market in Japan. It also alleges that Sony strikes deals to keep popular Japanese games away from Microsoft’s Xbox, which may breach Japan’s antitrust laws.
The Japanese government’s apparent lack of action against Sony is seen as a barrier to U.S. exports, negatively affecting not only Microsoft but also numerous American game developers and publishers. Meanwhile, a letter from six Democratic lawmakers from Washington state – Microsoft’s home base – raises similar concerns.
Despite the apparent advantage Sony has held over Xbox in Japan for years, the actual reasons remain shrouded in mystery due to the secretive nature of gaming contracts. While Sony does secure exclusives for major platforms, it’s worth noting that the Japanese console market isn’t solely a battle between Sony and Microsoft – Nintendo dominates both companies.
This intensified scrutiny on Sony coincides with the company’s own efforts to persuade antitrust regulators to block Microsoft’s $69 billion acquisition of Activision-Blizzard. Microsoft spokesperson David Cuddy stated that the company welcomes further investigation into Sony’s alleged anti-competitive tactics to ensure a level playing field in the gaming industry. Although the extent of Microsoft’s involvement in this push is unclear, Axios reports that the company’s government affairs team has discussed the matter with members of Congress.
In response to these concerns, House members have requested that the issue be raised with the Japanese government and have sought to identify additional barriers for American companies in the Japanese gaming market. Trade Representative Tai assured Senator Cantwell that she would look into the matter, admitting that it was a new issue for her.
