Microsoft has responded to a list of concerns regarding its ongoing $68bn attempt to buy Activision Blizzard, as raised by the UK’s Competition and Markets Authority (CMA), and come up with an interesting statistic.
In response to continued questions over whether Microsoft owning Call of Duty would unfairly hobble PlayStation, Microsoft claimed that every COD player on PlayStation could move over to Xbox, and Sony’s playerbase would still remain “significantly larger” than its own.
Microsoft does not go into detail on its mental arithmetic here, but does note elswhere in its comments that PlayStation currently has a console install base of 150 million, compared to Xbox’s install base of 63.7 million.
That claim is part of a range of comments given to Eurogamer sister site GamesIndustry.biz in response to the CMA’s latest report, which otherwise mostly repeats many of the same concerns raised by the UK regulator – and others around the world – already.
For those following the case, the CMA’s latest intervention will not come as a surprise – it is the next step on the regulator’s recent roadmap for how and when it will weigh in with its final ruling. This month, we were due the CMA’s October “issues statement” – and it seems that this is the document to which Microsoft has now publicly responded.
The usual topics are covered – surrounding the potential for the deal to harm competitors should Microsoft gain too much of an advantage owning Activision Blizzard franchises (mainly, Call of Duty) and therefore being able to leverage their brand power to become a dominant market leader in the console market and cloud streaming.
Specifically, the CMA sees potential for the deal to harm Sony but also other streaming services such as Google (perhaps a moot point now), Amazon and Nvidia.
“Having full control over this powerful catalogue, especially in light of Microsoft’s already strong position in gaming consoles, operating systems, and cloud infrastructure, could result in Microsoft harming consumers by impairing Sony’s – Microsoft’s closest gaming rival – ability to compete,” the CMA wrote, “as well as that of other existing rivals and potential new entrants who could otherwise bring healthy competition through innovative multi-game subscriptions and cloud gaming services.”
In response, Microsoft said such “unsupported theories of harm” were not enough to even warrant the CMA’s current Phase 2 investigation – which was triggered on 1st September.
“The suggestion that the incumbent market leader, with clear and enduring market power, could be foreclosed by the third largest provider as a result of losing access to one title is not credible,” Microsoft told GamesIndustry.biz.
“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.
“Should any consumers decide to switch from a gaming platform that does not give them a choice as to how to pay for new games (PlayStation) to one that does (Xbox), then 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.”
The CMA is due to notify Microsoft of its provisional findings in January 2023, at which point it can seek possible remedies to any sticking points raised. The regulator’s final report – and overall ruling – will then be published no later than 1st March next year.