Microsoft isn’t Happy with a UK Regulator’s Math on its Activision Blizzard Deal
March 23, 2023
The Competition and Markets Authority (CMA) is once again the protagonist in relation to the purchase of Activision Blizzard because of Microsoft. The United Kingdom regulator is in a second phase of investigation because of the body’s concerns about consent. As revealed from Gamesindustry.biz, the CMA considers that the purchase may affect PlayStation and other subscription services. In other words, since Microsoft could make all the new content it receives unique and, along with other tools, surpass other competitors such as Google, Amazon or Nvidia in the streaming technology section.
“There is a realistic vision of a significant decrease in competition in game consoles, subscription services for various games and cloud gaming services”
They say from the organization.
The CMA is concerned that taking full control of this powerful portfolio may be where Microsoft will hurt customers. Especially in light of Microsoft’s already strong position on gaming consoles, operating systems, and cloud infrastructure. It will then damage the role of Sony, Microsoft’s closest gaming opponent. As well as that of other existing rivals and likely new entrants that might otherwise produce healthy competition through innovative and diverse cloud gaming subscriptions and streaming services.
Although Activision Blizzard’s works do not reach subscription services like Xbox Game Pass at launch, from the CMA they point out that:
“after the merger, Microsoft would obtain control of this fundamental contribution and could use it to affect the competitiveness of their rivals.”
Xbox Custody Faced with these arguments
Xbox has decided to come out of the closet by responding to the CMA. For the Phil Spencer-led spinoff, each of these questions remains “off target” and it is suggested that Sony is in a position of power to afford to raise the cost of PS5 “without fear of losing market share”. Xbox believes that if all of PlayStation’s Call of Duty players were to switch to Xbox, PlayStation’s player base would still be significantly larger than Xbox’s. The document shows that Sony released well over 280 exclusive titles, both first party and third party, in 2021, a figure 5 times that of Xbox.
The company defends that the CMA is:
“incorrectly inspired by unnecessary statements from Sony that significantly exaggerate the value of Call of Duty to them and do not take into account Sony’s clear ability to respond competitively”
Yes, Xbox is clear that “gamers will ultimately benefit from this increased competition and choice”. Xbox says that the main goal with the purchase of Activision Blizzard is to make its games on Xbox Game Pass. He emphasizes that Call of Duty is not going to be unique, a fact that we already knew.
So, Microsoft shows that if gamers choose to leave PlayStation for Xbox, it will be because Xbox offers different options in their approach to how they can market games. Be that as it may, the CMA will give its preliminary verdict in the first month of the year and a final election on the first of March. Saudi Arabia and Brazil have already given the go-ahead for the purchase.