The CMA CMA has released a statement signalling its continued intent to investigate Microsoft’s proposed acquisition of Activision Blizzard, reports Gamesindustry.biz. This comes in spite of Microsoft attempting to assuage concerns with the launch of a website detailing their plans.
A chief concern of the CMA is the possibility of Microsoft making the bestselling Call of Duty franchise a console exclusive (foreclosing, as the CMA puts it.) Although the company has stated it has no intention of doing so, this has been a subject of great concern to Sony, with CEO Jim Ryan reportedly lobbying against the acquisition due to the possibility of losing access to the franchise on PlayStation.
“Financial modelling of the merger suggests that the merged entity’s incentive to foreclose Sony may be considerably stronger than suggested by the parties,” stated the CMA.
The short end of the joystick
Even if the company decides to keep Call of Duty available across platforms, the CMA believes that the acquisition could still result in unfair competition.
Microsoft could engage in a partial foreclosure strategy, which would allow it to capture the most dedicated CoD gamers—those who would switch to Xbox to benefit from enhanced content, interoperability, or earlier releases —whilst continuing to generate revenues from less dedicated PlayStation CoD gamers who may not have switched to Xbox in response to a total foreclosure strategy.
The CMA also found no evidence that Microsoft would be deterred from the financial bonuses of making the Call of Duty franchise an Xbox exclusive by the prospect of public backlash.
The CMA did not identify any persuasive evidence that Microsoft would be deterred from engaging in total or partial foreclosure strategies by the prospect of reputational damage to Xbox or CoD.”
In short, the CMA’s concerns are the same as Sony’s own – that Microsoft’s acquisition of the Call of Duty could affect Sony’s ability to compete. Although both companies have made a series of acquisitions, and each have close working relationships with a variety of developers which have led to sometimes contentious exclusivity deals, it appears that the historic success and uncertain future of Call of Duty on both consoles will continue to make this deal a difficult prospect for Sony – and regulators – to swallow.
In August, we listed Activision Blizzard as one of the top 50 mobile game makers of 2022.
