Microsoft's Claim of 20% European Market Share: A Breakdown

This week, during the European hearing on the Activision Blizzard acquisition, Microsoft presented itself as the underdog in the video game market. A slide showcased the European console sector, with PlayStation dominating at 80% and Xbox holding 20%. Microsoft's Brad Smith further elaborated on the global market share, stating that PlayStation leads with approximately 70%, while Xbox trails at about 30%. In Japan, the disparity is even greater, with PlayStation at 96% and Xbox at 4%. These figures have remained relatively consistent over two decades, with Sony outselling Microsoft by a significant margin of 69 to 31 in the fourth quarter. Critics argued that Microsoft conveniently omitted Nintendo from the comparison, as the Nintendo Switch has been a market leader, particularly in Europe. However, Microsoft's decision to focus on PlayStation and Xbox is strategic, as it aims to counter the argument that Call of Duty is essential for a console's success. By highlighting Nintendo's success without Call of Duty, Microsoft undermines this claim. Regulators have accepted that Nintendo operates in a distinct market, targeting a different demographic, and have defined the console market as comprising only Xbox and PlayStation. Microsoft's presentation simply aligns with this regulatory perspective.