Microsoft recently provided a response to UK regulators in regard to the continued investigation into theActivisionacquisition detail, and it stated, among many other things, that it believes Sony “significantly exaggerates the importance ofCall of Duty.” The Competition and Markets Authority (CMA) is the regulating body in the United Kingdom responsible for scrutinizing the pending acquisition of Activision Blizzard Inc. by Microsoft. It recently expanded its investigation into a ‘second phase’ due to concerns that the deal may hamper fair competition in the UK gaming market.
The CMA states that there is a “realistic prospect of a substantial lessening of competition in gaming consoles, multi-game subscription services, and cloud gaming services.” On the console end, the CMA is afraid of a ‘network effect’, where the influx of players that the acquisition would bring in, would in turn bring in more content and so on. The regulator stated thatXboxhaving this powerful Activision catalog under its ownership could impairPlayStation’s ability to compete, as well as any other up-and-coming platform.
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Its concern, however, now leans a bit more towards Xbox’s gaming subscription service,Game Pass. The CMA believes that Activision-Blizzard games could have gone to other services, but won’t, were this acquisition to go through, therefore Xbox could have an anti-competitive dominance over other subscription services. Furthermore, due to Microsoft’s strong cloud infrastructure with Azure, as well as its ownership over the ubiquitous Microsoft OS, the CMA states that the acquisition will give Xbox an “unparalleled advantage” in cloud streaming, another important service that’s included in Game Pass.
In statements that were shared withgamesindustry.biz, Microsoft contested that these arguments didn’t justify further investigation, due to PlayStation’s current significant market advantage. The Xbox parent claimed that PlayStation’s install base (150 million) more than doubles Xbox’s (63.7 million). It even referenced the recent PlayStation 5 price increase in certain countries outside the United States, and stated that this was done “without fear of losing market share.”
Microsoft went on to accuse the CMA of letting the ‘second phase’ decision be reliant on “self-serving statements by Sony.” Microsoft claims Sony “exaggerates the importance of Call of Duty,” and though PlayStation may not welcome increased competition, it certainly has the ability to adapt to it. It reiterated one more time that there are no plans to make Call of Duty exclusive, this time stating it would tarnish the image of both the Xbox and Call of Duty brands.
Its plans to put the popular franchise on Game Pass are, of course, unchanged, but it states that if any consumers switch to Xbox for this reason, it is due to Xbox’s better provision of purchasing choices, which is something that only benefits players, and therefore something the CMA should encourage. When it comes to Xbox’s potential dominance on cloud streaming services, Microsoft purported that trying to foreclose rivals wasn’t in its best interest because cloud gaming is a growing market, and it wants to encourage its presence as a whole.
