North Dakota Senator Expresses Concerns About Sony’s Anticompetitive Practices in Gaming Industry

North Dakota Senator Kevin Cramer has written a letter to Mr. Kenichiro Yoshida, Chief Executive Officer of Sony, expressing concerns about the company’s efforts to protect its gaming console business from the competition. Senator Cramer highlights that Sony has dominated the gaming console market for over 20 years, but its anticompetitive practices may jeopardize economic development opportunities for North Dakota.

In the letter, Senator Cramer emphasizes the significance of the gaming industry as a large and rapidly growing economic sector, generating over $200 billion in revenues in 2021 and projected to grow by over 20 percent annually. 

He highlights the economic impact of video gaming in North Dakota, producing over $20.6 million statewide and accounting for an estimated 221 jobs, with potential for significant growth as gaming moves to mobile platforms. He projects a 14 percent increase in technology job openings in North Dakota over the next decade, with an estimated 6,320 new and replacement technology jobs needed to support the growing tech industry in the state.

However, Senator Cramer expresses concerns about Sony’s anticompetitive conduct, citing reports that the company controls over 68% of the global gaming console market and 98% of the Japanese market. He alleges that Sony’s dominance is attributable to exclusionary practices, including paying game publishers not to distribute their games on rival platforms. 

Senator Cramer also notes that Sony has lobbied against Microsoft’s proposed acquisition of Activision, a transaction that many experts believe would promote a more competitive gaming market. He finds it troubling that Sony’s lobbying efforts began shortly after the company acquired Bungie, Inc., another major gaming competitor, and that Sony has refused to accept an agreement that would expand consumers’ access to games.

Senator Cramer asserts that Sony’s anticompetitive conduct hurts American consumers by leading to higher prices and reduced choice, and also constrains economic opportunities for developers, including small and independent ones. 

To ensure transparency, he requests unredacted copies of :

• Agreements that provide Sony with exclusive rights to distribute games developed by independent publishers.
• Agreements between Sony and game publishers that prevent distribution on the rival subscription or streaming services.
• Internal company documents describing the strategic rationale for Sony’s acquisition of Bungie, Inc., and all correspondence with U.S. federal or state government or regulatory agencies relating to competition in the video gaming industry.

Interestingly, Sony has come under criticism from the US government before for engaging in anti-competitive business practices. In fact, Sony has previously received a couple of open letters from members of Congress in the US who have scrutinized the company’s conduct in this regard. It seems that the obstacles that Sony tried to create to impede the Microsoft-Activision deal are now backfiring on them.

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