After a few days of calm in the context of Microsoft’s takeover of Activision Blizzard, the CMA is putting the matter back on the table today by siding with Microsoft following an in-depth analysis of the situation, but this has not not to everyone’s taste.
The CMA considers that Microsoft would have nothing to gain by blocking Call of Duty on PlayStation
Last month, the UK Competition and Markets Authority tentatively concluded that Microsoft might try to make the Call of Duty license exclusive and deprive competitors, including Sony, of it. The CMA initially concluded that this strategy would be profitable. Faced with this, Microsoft has been saying the opposite for several months and has even publicly criticized the CMA’s calculations, stating that their financial modeling was flawed and that it contained “obvious errors”. Martin Coleman, chair of the CMA’s Independent Panel of Experts, ultimately reversed his position by stating:
“After reviewing the additional evidence provided, we have tentatively concluded that the merger will not result in a substantial lessening of competition in console game services, as the cost to Microsoft of removing Call of Duty from PlayStation the would outweigh the benefits of such action.
We have considered the parties’ and third parties’ comments on our LTV model and modified the input data where appropriate. Based on our updated results, our quantitative modeling indicates that a full foreclosure strategy would result in significant net financial loss to the parties under all scenarios we considered plausible.”
Rima Alaily, corporate vice president and assistant general counsel at Microsoft, couldn’t hide her joy as she praised the CMA’s decision to correct its financial model. with our colleagues from The Verge.
“We appreciate the CMA’s rigorous and comprehensive assessment of the evidence and welcome its updated interim findings. This agreement will allow more players to have more choice in how they play Call of Duty and their favorite games. We look forward to working with the CMA to resolve outstanding issues.”
Activision executive Lulu Cheng Meservey had this to say:
“The CMA’s updated interim findings demonstrate a better understanding of the console gaming market and a commitment to supporting gamers and competition. Sony’s campaign to protect its dominant position by blocking our merger can do nothing against the facts, and Microsoft has already submitted effective and enforceable remedies to address each of the CMA’s remaining concerns. We know this will benefit competition, innovation and consumers in the UK. »
On the side of Sony, morale has not been good since this announcement from the CMA and the Japanese giant considers the position of the organization “surprising, unprecedented and irrational”. With this significant development in the deal and CMA findings, a 10-year deal between Microsoft and Sony regarding Call of Duty could be increasingly plausible. Nevertheless, the CMA continues to investigate the impact of the deal on the cloud gaming market. Martin Coleman said this on behalf of the CMA.
“Today’s announcement does not affect our preliminary view that this agreement raises concerns in the cloud gaming market. Our investigation should be completed by the end of April. »
We will have to wait for the verdict of the CMA, which must decide on the agreement by April 26.
To find all the key points of the Activision Blizzard and Microsoft affair, we advise you to watch our summary video to understand everything about the issues surrounding the takeover of Activision-Blizzard by Microsoft, as well as our complete file on the subject.
