Activision Blizzard: Microsoft answers CMA with clear words

Microsoft has found a clear word on the numerous concerns of the British authorities regarding the takeover of Activision Blizzard.

While the decision to acquire Activision Blizzard by Microsoft has already been approved in Brazil and Saudi Arabia, the deal is in a second phase of review in the UK.

The UK’s Competition and Markets Authority (CMA) recently expressed its concerns. Sony could become less competitive if Microsoft had a huge catalog to feed, among other things, with Xbox and PC Game Pass or with its cloud gaming service.

Microsoft, on the other hand, has found clear words on this and considers the theories of wanting to harm the competition and consumers to be unfounded to justify a second phase of the test.

The group responded in detail and gave several reasons why the concerns of the CMA were completely unfounded.

With 150 million installed consoles, PlayStation is the market leader, according to Microsoft. In contrast, there are 63.7 million Xbox consoles. The company also points to the price increase of its PlayStation 5 console, which the market leader made without fear of losing shares in the market.

In a statement to Gamesindustry.biz, Microsoft said: “The claim that the incumbent leader, which has clear and enduring market power, could be squeezed out of the market by the third largest player because it loses access to a title is not credible .”

Microsoft also claims that even if all Call of Duty players switched to Xbox, the PlayStation player base would still be significantly larger. However, the company did not give any figures to support its claim.

Furthermore, reference was made to the many exclusive games for PlayStation. Sony will have more than 280 exclusive games (first and third party) on its platform in 2021. That’s five times as many exclusive games as on Xbox.

Microsoft continued, “In short, Sony is not susceptible to a hypothetical foreclosure strategy, and the referral decision erroneously relies on self-serving statements by Sony that grossly overstate the importance of Call of Duty to the company and Sony’s clear ability to compete.” react, disregard.”

“While Sony doesn’t necessarily welcome the increased competition, the company is able to adapt and compete. Ultimately, players will benefit from this increased competition and choice.”

Regarding the Call of Duty shooter series, Microsoft had reaffirmed its intention to keep it on PlayStation consoles as well. With an exclusion, one would alienate oneself from the fan base and stain both Call of Duty and the Xbox brand, according to the company.

The main motivation for taking over Activision Blizzard with its catalog of games is to give players more choices about content in Game Pass.

Microsoft also doesn’t think it’s true that subscription services like Xbox Game Pass would go in Microsoft’s favor if the deal goes through. Because traditional models such as buy-to-play and free-to-play are still very popular and therefore always a competitor.

The CMA should continue to endorse the deal if it’s in favor of giving players more choices about how to pay for their games. Because Microsoft offers this in contrast to Sony.

“Should consumers decide to switch from a gaming platform that doesn’t give them choices when paying for new games (PlayStation) to a platform that does (Xbox), this is precisely the type of switching behavior that the CMA should be seen as promoting welfare and should even be promoted. It’s not something the CMA should try to prevent.”

Along with these concerns, the CMA also has some concerns regarding video game streaming. For example, the takeover could give you a dominant position if Microsoft were to use games on PCs via its in-house cloud service provider Azure and its Windows operating system.

Microsoft allayed those concerns by saying that Xbox Cloud Gaming doesn’t use Azure or PC hardware for streaming.

“There is no benefit. In fact, Xbox believes it faces a number of significant disadvantages compared to competing game streaming infrastructure providers.

About blocking possible streaming competitors, Microsoft replied:

“Consumer adoption of cloud gaming remains low. Damaging or disrupting competing services would significantly set back the adoption of this technology, thereby protecting the market-leading incumbents (ie Sony on console, Apple and Google on mobile, and Steam on PC).”

“Xbox, as the platform that ranks last for consoles, seventh for PCs, and last for mobile games distribution worldwide, has no incentive to do so — instead, its incentive is to have widespread adoption Encourage adoption of cloud gaming technologies by as many vendors as possible to support the fundamental shift in consumer behavior needed for cloud gaming to thrive.”

In January 2023, the CMA will present its preliminary results of the Phase 2 investigation. The final report, on the other hand, is expected by March 1st.

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