Sony
UK regulators considering Microsoft’s proposed takeover of Activision Blizzard today reversed their stance on a key question, saying they don’t believe Microsoft will remove the Call of Duty franchise from Sony’s PlayStation console. .
Last month, the UK’s Competition and Markets Authority (CMA) tentatively concluded that the combination of Microsoft and Activision Blizzard would undermine competition in console games. At the time, the CMA said, “Microsoft believes that dedicating Activision’s games to their consoles (or making them available only on the PlayStation under substantially worse terms) would be commercially beneficial. deaf,” he said. The agency also expressed concern about the merger affecting cloud gaming rivals.
The preliminary findings are a win for Sony, who has consistently questioned Microsoft’s promise to keep bringing Call of Duty games to the PlayStation. However, Microsoft argued that the CMA’s financial model was flawed and that it was able to persuade the agency to reverse its conclusions. In today’s announcement, the CMA said it had “received a significant amount of new evidence.”
“After reviewing the additional evidence provided, we believe that the costs to Microsoft of withholding Call of Duty from PlayStation will outweigh the benefits of taking such action, so the merger would significantly increase competition for console gaming services. We have tentatively concluded that it will not decrease,” said CMA panel chair Martin Coleman.
As a result, the CMA panel investigating the deal “has updated its preliminary findings to the tentative conclusion that, overall, the deal will not lead to a significant reduction in competition related to UK console games.” reached,” the agency’s statement said.
Withdrawal of CoD will result in ‘significant’ financial loss
According to the latest findings, pulling Call of Duty off the PlayStation would result in “significant net economic losses for both parties under all scenarios we deem plausible”, but the numbers has been removed from the published version of the document.
The CMA said the “most significant new evidence” presented to the agency related to Microsoft’s financial incentives to make Activision games exclusive to the Xbox console, adding:
CMA’s initial analysis showed this strategy to be profitable in most scenarios, but new data (which provides better insight into the actual purchasing behavior of CoD gamers) suggests that this strategy is Based on this, our updated analysis shows that dedicating CoD to Xbox after the deal would not be commercially profitable for Microsoft. But in return, Microsoft still has an incentive to make its games available on the PlayStation.
UK not dropping cloud gaming concerns
This should make it easier for Microsoft to get approval for a merger in the UK, but the company will have to convince regulators that the deal won’t hurt competition in cloud gaming.
“Our tentative view that this transaction raises concerns in the cloud gaming market is not affected by today’s announcement. Our investigation is expected to be completed by the end of April,” Coleman said. says Mr.
According to preliminary findings from the CMA last month, “Microsoft believes dedicating Activision games to its own cloud gaming service (or making them available only to other services is a very bad idea.”). Microsoft has shown that it is commercially profitable to make an estimated 60-70 more Xbox, major PC operating systems (Windows), global cloud computing infrastructure ( Azure and Xbox Cloud Gaming), we have other key strengths in cloud gaming.”
Acquiring Activision Blizzard “will allow us to strengthen this strong position and significantly reduce the competition Microsoft will face in the UK cloud gaming market,” CMA said in a statement. It could change and harm UK gamers, especially those who can’t, who can afford or don’t want to buy expensive consoles and gaming PCs.”
In response, Microsoft told the CMA, “Without the merger, Activision’s games would not have been available on the cloud gaming service,” adding that “Activision content has been a key input for cloud gaming providers.” There is no evidence,” he said. Microsoft also states that the proposed licensing remedy “will make CoD and other of his Activision titles more widely available on cloud gaming services.”
