Xbox Has Lost Console War to PlayStation, Microsoft Admits

Microsoft says it has lost the PlayStation vs Xbox console war. The company made this statement in an opening argument in court yesterday, where it is fighting off the Federal Trade Commission‘s (FTC) attempt to get a preliminary injunction against the Activision Blizzard merger.

Xbox “consistently” behind PlayStation and Nintendo

Microsoft and FTC disagree over the definition of the console market, with the latter excluding Nintendo from “high-end” console market. Nevertheless, Microsoft argues that it is “consistently” behind both the PlayStation and Nintendo, both of whom it believes are in a position to continue dominating, “including by leveraging exclusive content.”

Interestingly, it emerged during the court proceedings yesterday that such is PlayStation’s “market power” that Activision Blizzard demanded a higher revenue split from Microsoft to match that of PlayStation’s, failing which it threatened to not release Call of Duty on Xbox consoles.

Microsoft also said that because of PlayStation’s massive user base, it costs Sony less to secure exclusive content (both first-party and third-party) for the PS5 compared to what Microsoft has to fork out for Xbox exclusivity.

“Sony is the dominant player in consoles,” Microsoft says. “Sony PlayStation, for over two decades and through five generations, has been the leading console both worldwide and in the U.S.”

The legal proceedings will continue for a second day today.

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