Xbox calls PlayStation too big to fail after UK agency criticizes Activision Blizzard deal

Xbox has developed a new tactic to defend its acquisition of Activision Blizzard, which is still making its way through various regulatory bodies around the world: self-deprecation.

In response to claims of concerns raised by the UK Competition and Markets Authority [CMA]Microsoft issued a lengthy statement to calling the criticism “unsupported” and pointing to PlayStation’s leading position in the market as the reason why.

“The suggestion that the incumbent market leader, with clear and lasting market power, could be foreclosed by the third-largest provider as a result of losing access to one title is not credible,” Microsoft said in a statement.

Activision Blizzard deal compared to other major acquisitions

To put Microsoft's acquisition of Activision Blizzard into perspective, we've compiled a list of other major studio acquisitions (and their costs) in the video game, film, and television industries.

While Microsoft hasn’t shared any numbers, the company says that if every Call of Duty player on the PlayStation consoles switched to Xbox, “the remaining PlayStation gamer base would be significantly larger than Xbox.”

In summary, Sony is not vulnerable to a hypothetical foreclosure strategy, and the order for reference erroneously relies on selfish statements by Sony that significantly exaggerate the importance of Call of Duty to the company and fail to account for Sony’s apparent ability to respond competitively, said the statement from Microsoft. “While Sony may not welcome increased competition, it has the ability to adapt and compete. Gamers will ultimately benefit from this increased competition and choice.”

As for the CMA’s concerns about the streaming market, Microsoft says it has “no advantage” and says Xbox has “some significant drawbacks” compared to other competitors due to its relatively limited platform support for Xbox Cloud Gaming. The company also says that video game streaming adoption is relatively low and that undermining the market in any way would only have long-term damaging effects on its own products.

Microsoft is not happy with the British CMA regulator over the comments about the acquisition of Activision Blizzard. It describes the regulator’s concerns as “misplaced” and that it “takes over Sony’s complaints without considering the potential harm to consumers” ? ? 1/3

— Tom Warren (@tomwarren) October 12, 2022

“Xbox, as a platform that ranks last on console, seventh on PC, and nowhere in the global distribution of mobile games, has no incentive to do so — instead, it’s an incentive to encouraging adoption of cloud gaming technologies by as many providers as possible to encourage the major shift in consumer behavior needed for cloud gaming to succeed,” the statement reads.

As noted by Tom Warren of The Verge, Xbox also claimed that Sony has “chosen to block Game Pass from PlayStation” while protecting its own first-party games.

In its response, Xbox emphasizes Sony’s strength in the market while positioning itself as a weaker competitor. It’s all part of a major effort to influence global opinion on the acquisition, which will add World of Warcraft, Call of Duty, and other major franchises to a stable that already includes Halo, Fallout, and Skyrim, going as far as to open a website touting the benefits of the acquisition.

Sony, for its part, has criticized the buyout as “major negative impact on gamers” and praised the CMA.

Xbox could hurt rivals’ competitiveness

Xbox responded to the CMA’s initial report, the full text of which was published today. The CMA says it fears that Microsoft absorbing a third-party company as large as Activision Blizzard will harm the PlayStation brand. In addition to the ability to make Activision Blizzard games such as Call of Duty exclusive to Xbox and Windows platforms, the CMA points out that having those games exclusively on Microsoft services such as Xbox Cloud Gaming could have similar implications for competitors of video game streaming platforms. such as Amazon and Nvidia.

“The CMA is concerned that having full control over this powerful catalog, especially in light of Microsoft’s already strong position in games consoles, operating systems and cloud infrastructure, could lead Microsoft to harm consumers by Sony’s – Microsoft’s closest gaming rival – compete to harm, as well as those of other existing rivals and potential entrants who could otherwise bring healthy competition through innovative multi-game subscriptions and cloud gaming services,” the authority wrote in its report.

At the time of writing, Activision Blizzard games are not made exclusively for Xbox platforms and services, and Microsoft has said it plans to bring Call of Duty to PlayStation. But the CMA says that may change as Microsoft continues to invest in and grow in these companies in the future.

“The CMA recognizes that ABK’s latest games are not currently available on a subscription service on release day, but believes this could change as subscription services continue to grow. Following the merger, Microsoft would gain control over this important input and be able to use it. to harm the competitiveness of its rivals,” the CMA wrote.

The CMA’s investigation will continue in January, when it will publish its second phase of findings. The final report will be ready on 1 March next year.

Kenneth Shepard is a writer on games, entertainment and queerness on the internet. Find him on Twitter at @shepardcdr and listen to his biweekly video game retrospective podcast Normandy FM, which currently covers Cyberpunk 2077.

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