Microsoft has responded to the ongoing controversy surrounding the company’s acquisition of Activision Blizzard. The company has struggled to get the purchase approved in multiple regions around the world with only Brazil giving the buyout the greenlight after months of investigations.
Last week, the UK Competition and Markets Authority (CMA) announced that it would launch into a second phase investigation of the purchase after recent concerns came to light on the impact the buyout would have on cloud streaming and subscription-based gaming services.
In its official response, Microsoft has denied all claims that the company’s purchase of Activision Blizzard will affect the gaming industry and create a monopoly where its Xbox Game Pass service would be the only place to play certain titles. The company says that all statements released during the first phase of the investigation are unsupported theories and aren’t sufficient enough to warrant a Phase 2.
The company released a massive four-page statement covering the biggest issues on hand and referenced Sony’s recent acquisitions, and user base as a scapegoat as to why owning Activision won’t make Xbox a bigger gaming brand. The document details some of the following:
- Sony PlayStation has been the largest console platform for over 20 years, with an installed base of over 150 million consoles making it larger than Nintendo and more than double the size of Xbox.
- Sony engages in conduct today which is reflective of its market power in console gaming, including increasing the prices of its consoles without fear of losing market share.
- 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. There are more than 4,000 games available on PlayStation alone.
- The evidence shows that the number of PlayStation’s monthly active users (“MAUs”) playing Call of Duty is not sufficiently material. Even without all of those gamers (a highly improbable outcome from a hypothetical foreclosure strategy), the PlayStation gamer base would remain significantly larger than Xbox is today.
- Since the Transaction was announced, Sony has acquired several game studios—including Bungie, developer of the popular online game Destiny 2, Haven Studios, Lasengle and Savage Games—and a minority interest in From Software, the developer of the biggest game of 2022, Elden Ring (among other hit games). This complements Sony’s existing minority shareholding in Epic Games, publisher of Fortnite, strong first-party game catalogue and extensive portfolio of exclusive arrangements with third-party publishers. There were over 280 exclusive first and third-party titles on PlayStation in 2021, nearly five times as many as on Xbox
You can read into each and every page below if you are interested in what Microsoft had to say about the ongoing CMA approval process. At the moment, it isn’t clear whether or not the acquisition will enter a Phase 2 but the UK CMA definitely wants it to happen.
Microsoft wants to avoid a Phase 2 but by the look of things, it might actually happen after all. Read the full statement below:
— Tom Warren (@tomwarren) October 16, 2022