Microsoft: Sony’s Stance on Activision Blizzard Deal Is A Self-Serving Attempt To Protect Its Dominance
Microsoft has responded to the CMA’s preliminary findings, claiming that Sony’s stance on the Activision Blizzard King deal is a self-serving attempt to protect its market dominance.
The CMA has published both Microsoft and Sony’s response to its provisional findings. Microsoft claims that Sony’s stance on the Activision Blizzard King deal is a “self-serving attempt to protect its dominant market position”. Meanwhile, Sony claims that when it comes to multi-game subscription services, it is “beyond doubt that Game Pass is far ahead of PlayStation Plus” in terms of market share.
Microsoft clarifies that the CMA’s calculations contains a fundamental and obvious error in calculating the gains of the Activision Blizzard King acquisition to Microsoft. The calculation uses a five-year gross profit figure, but in assessing the ‘losses’ side, it uses a figure that measures losses for only a single year. The software giant further states that long-term strategic benefits are, by their nature, speculative and uncertain.
Furthermore, the response states that the CMA can’t place reliance on Microsoft’s past behaviour following acquisitions of smaller studios/publishers to question the clearly articulated strategy in relation to the Activision Blizzard king deal. According to Microsoft, Minecraft remains the closest analogue to CoD in terms of its previous acquisitions. The franchise has remained on all platforms post-acquisition, in
addition to being made available on many new platforms, including Nintendo’s.
On the other hand, in Sony’s view, Microsoft would also have the incentive to engage in one or more partial foreclosure strategies. It may opt to raise the price of Call of Duty on PlayStation, degrade the quality and performance of Call of Duty on PlayStation compared to Xbox, restrict, degrade, or not prioritize investment in the multiplayer experience on PlayStation, or make Call of Duty available on multi–game subscription services only on Game Pass or provide Call of Duty on PlayStation Plus at a commercially
nonviable price, thereby making it de facto exclusive. According to Microsoft, however, the data gathered by the CMA actually shows that Microsoft has no incentive to withdraw Call of Duty from PlayStation.
Previously, it was reported that Microsoft will propose a deal to the CMA and European Commission in order to allow all future Activision titles to release on all platforms for a 10 year period.