24 Mar UK Regulator Drops Concerns Over Call of Duty on PlayStation, to Focus on Cloud Streaming
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The UK regulator, the Competition and Markets Authority (CMA), has published an addendum to its provisional findings on Microsoft’s Activision Blizzard acquisition and has now narrowed its scope of concerns.
The CMA has received new evidence that has led it to conclude that if the acquisition is approved it won’t significantly lessen competition in the video game console market in the UK. The new evidence shows that Microsoft would lose significant money if it were to make Call of Duty exclusive to Xbox consoles and this would incentivize Microsoft to continue to release Call of Duty games on PlayStation consoles.
“We appreciate the CMA’s rigorous and thorough evaluation of the evidence and welcome its updated provisional findings,” said the corporate vice president and deputy general counsel for Microsoft Rima Alaily in a statement sent to The Verge. “This deal will provide more players with more choice in how they play Call of Duty and their favourite games. We look forward to working with the CMA to resolve any outstanding concerns.”
“The CMA has received a significant amount of new evidence in response to its original provisional findings,” reads the press release from the CMA.
“Having considered this new evidence carefully, together with the wide range of information gathered before those provisional findings were issued, the CMA inquiry group has updated its provisional findings and reached the provisional conclusion that, overall, the transaction will not result in a substantial lessening of competition in relation to console gaming in the UK.
“The most significant new evidence provided to the CMA relates to Microsoft’s financial incentives to make Activision’s games, including Call of Duty (CoD), exclusive to its own consoles. While the CMA’s original analysis indicated that this strategy would be profitable under most scenarios, new data (which provides better insight into the actual purchasing behaviour of CoD gamers) indicates that this strategy would be significantly loss-making under any plausible scenario.
“On this basis, the updated analysis now shows that it would not be commercially beneficial to Microsoft to make CoD exclusive to Xbox following the deal, but that Microsoft will instead still have the incentive to continue to make the game available on PlayStation.”
The CMA still has concerns related to cloud gaming services, where it will continue to carefully consider responses provided in its original provisional findings. The CMA will issue its final report by April 26, 2023.
“Provisional findings are a key aspect of the merger process and are explicitly designed to give the businesses involved, and any interested third parties, the chance to respond with new evidence before we make a final decision,” said Martin Coleman, the chair of the independent panel of experts conducting this investigation.
“Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action.
“Our provisional view that this deal raises concerns in the cloud gaming market is not affected by today’s announcement. Our investigation remains on course for completion by the end of April.”
There was a report earlier this week that Microsoft’s remedies to the European Commission include concerns over cloud streaming, but makes no mention of video game console rival, Sony with its PlayStation.
The lack of any remedies related to PlayStation suggests the regulator no longer has any concerns about competition in the video game console market.
Microsoft has recently signed multiple 10-year deals to bring Xbox games on PC to three cloud streaming services – Nvidia’s GeForce Now, Boosteroid, and Ubitus. Microsoft has also signed a 10-year deal with Nintendo to release Call of Duty on Nintendo consoles on day one with full content parity.
A life-long and avid gamer, William D’Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.