Microsoft’s proposed acquisition of Activision Blizzard has come under scrutiny from multiple competition regulators across the globe, and in the UK, the Competition and Markets Authority has decided to begin a second phase of inquiry into the deal. The CMA has expressed a number of concerns related to the $68.7 billion acquisition, which it says could have a major impact on Sony if Microsoft decides to make Activision Blizzard content exclusive to Xbox.
Microsoft has dismissed those claims and added that the CMA has adopted Sony’s complaints without doing an appropriate level of critical review. According to Microsoft (via Games Industry), there were more than 280 first- and third-party exclusive titles available on PlayStation, almost five times more than what Xbox had locked down, and it pointed out that Sony “losing access to one title” is not a credible argument.
“In short, Sony is not vulnerable to a hypothetical foreclosure strategy, and the Referral Decision incorrectly relies on self-serving statements by Sony which significantly exaggerate the importance of Call of Duty to it and neglect to account for Sony’s clear ability to competitively respond,” Microsoft said. “While Sony may not welcome increased competition, it has the ability to adapt and compete. Gamers will ultimately benefit from this increased competition and choice.”
Microsoft once again mentioned that it plans to keep Call of Duty as a multiplatform franchise, and that making it an Xbox exclusive will “tarnish both the Call of Duty and Xbox brands.” If consumers choose to jump from PlayStation to Xbox, Microsoft says that this will be because its platform offers more choice and value when compared to Sony. “That is the sort of consumer switching behavior that the CMA should consider welfare-enhancing and indeed encourage. It is not something that the CMA should be trying to prevent,” Microsoft explained.
The CMA will issue its preliminary findings from its second phase investigation in January, with the final report being released by March 1. Take-Two Interactive CEO Strauss Zelnick has been in favor of the deal, and in a series of legal documents made public by Brazil’s Administrative Council for Economic Defense, it was revealed that Xbox Game Pass for consoles generated $2.9 billion in revenue in 2021.
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