More tension around the massive acquisition
Sony has issued a new statement regarding the Competitions and Markets Authority, or CMA, and its recently narrowed scope of concerns over Microsoft’s pending acquisition of Activision Blizzard.
The paper, submitted last month and recently publicized, sees Sony describing the CMA’s “reversal” of its position on its consoles theory of harm as “surprising, unprecedented, and irrational.”
This is in regard to the CMA’s recent update, where its provisional findings determined that a strategy of making Activision games like Call of Duty exclusive to Xbox would be “significantly loss-making under any plausible scenario.” On this basis and from its updated analysis, the CMA says that Microsoft will still have an incentive to continue making Call of Duty available on PlayStation.
“Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action,” said Martin Coleman, chair of the independent panel of experts conducting the CMA’s investigation in the statement. “Our provisional view that this deal raises concerns in the cloud gaming market is not affected by today’s announcement. Our investigation remains on course for completion by the end of April.”
Sony’s response
Sony’s response goes into several errors it believes the CMA has made in its findings, including an assertion that Minecraft, which is already on multiple platforms, says “nothing” about whether Microsoft would pursue Call of Duty exclusivity.
In one instance, Sony cites a recent quote from Arkane’s Harvey Smith to IGN. In it, Smith said that Redfall was in development for PlayStation 5 prior to Microsoft’s acquisition of Bethesda.
“We got bought by Microsoft and that was a huge sea change,” Smith said. “They said, ‘No PlayStation 5. Now we’re gonna do Game Pass, Xbox, and PC.'”
Sony asserts that this provides compelling evidence of Microsoft’s ability, and incentive, to “foreclose rivals to acquired games.” The company also brings up a point it’s mentioned before: that any degradation of performance or quality of play on PlayStation, or delays in release, would harm Sony’s reputation.
It ultimately calls on the CMA to revisit its analysis of Microsoft’s incentives and partial foreclosure. “In conclusion, SIE respectfully submits that the Addendum does not justify the CMA’s U-turn on the consoles theory of harm,” Sony’s statement concludes.
Microsoft’s response
Microsoft also had a response, issuing the following statement today (via Eurogamer):
“The Provisional Findings Addendum correctly confirms that Microsoft has no incentive to withhold or degrade access to Call of Duty. As Microsoft has explained throughout the course of the CMA’s investigation, such a strategy makes no commercial sense and would result in Microsoft writing off billions from the deal value.”
The CMA is expected to deliver its final decision on Microsoft’s acquisition of Activision Blizzard no later than April 26.
