As Microsoft awaits regulatory approval for its takeover of Activision Blizzard, the Competition and Markets Authority (CMA), the UK agency responsible for monitoring anti-competitive behaviour, has detailed its fears about the scale of such an acquisition. The Redmond company answered him.
CMA concerned about market competitiveness
Announced in January for $68.7 billion, this acquisition is the largest in video game history and should allow Microsoft to add the entire catalog Activision Blizzard offers to its Game Pass offering. So far, Brazil and Saudi Arabia have given their consent for the American giant to continue its operations, but other countries are much more reluctant.
This is particularly the case in the United Kingdom. After reviewing the terms of the acquisition, the CMA did not accept it and decided to proceed by proceeding to the second stage of approval. In that context, the organization returned to its many questions about the operation, which it considers dangerous for competitiveness in gaming and the cloud.
Anti-competitive behavior towards Sony?
For example, the CMA believes the deal could hurt Sony and its PlayStation and other multi-game subscription offerings, as Microsoft could make the decision to make Activision Blizzard content exclusive to its own offerings. The organization also fears that Microsoft will use the studio, which notably offers Call of Duty or World of Warcraft, to compete with historical rivals such as Google, Amazon and Nvidia in video game streaming, reports Game industry.
The CMA is particularly concerned about the effect of ” network by the industry that a console with a large number of players attracts more content, which in turn attracts more players. She explains that the potential exclusivity of the Call of Duty franchise may have this effect in a disproportionate way.
Finally, the fact that Microsoft owns the Azure cloud offering also raises CMA’s suspicions about the company’s PC gaming offering. By adding Activision Blizzard’s content to it, she fears the company will get a “ unmatched advantage on other cloud streaming providers.
It is important to note that these various elements are also at the heart of the concerns of the EU, which is also investigating the purchase. The Commission actually sent a large questionnaire to Microsoft’s competitors in the field, and many of the questions related to issues very similar to those raised by the CMA.
Microsoft reacts and reminds that Sony surpasses it in the video game sector, and by a long way
According to Microsoft, the questions raised by the British organization are not justified, especially those related to its competition with Sony. The Japanese company leads the console market with 150 million installed units, compared to 63.7 million for Xbox, which takes third place on the podium behind Sony and Nintendo.
” The suggestion that the historic market leader with clear and enduring power could be squeezed out by the third largest provider due to loss of access to a title is not credible “, assures the Redmond company. She further explains that if every Call of Duty player on PlayStation moved to Xbox, “ the remaining PlayStation player base would be significantly larger than the Xbox “.
In addition, Microsoft claims that Sony has much more exclusive content and that the company has the means to remain competitive even if the purchase of Activision Blizzard goes through. The company goes on to explain that if gamers choose to leave PlayStation for Xbox, it will be because Xbox offers more choice in its approach to how games can be purchased. According to Microsoft, this type of behavior should be encouraged by the CMA because it is an element that emphasizes the well-being of consumers.
Finally, regarding Microsoft’s cloud offering, the latter believes that the organization’s concerns are not justified because Microsoft’s Xbox Cloud Gaming service does not use Azure and does not stream games to from PC hardware.
The CMA will now analyze these responses and will deliver its judgment on 1 March. As a reminder, in addition to the UK and the EU, the US is also investigating the purchase through the Federal Trade Commission (FTC).