The UK government’s Competition and Markets Authority (CMA) has released the feedback on their initial assessment that Microsoft’s proposed acquisition of Activision would not result in limited competition in the console industry. This marks a significant shift from their previous provisional stance.
Sony Interactive Entertainment expressed surprise and disagreement with the CMA’s decision, stating that they believed there was substantial evidence supporting concerns about Microsoft potentially withholding Activision content from PlayStation platforms, which could negatively impact competition.
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The CMA updated its response stating that Microsoft would not benefit financially from making Activision content exclusive to Xbox, which aligns with Microsoft’s statement that removing Call of Duty from PlayStation would not be a smart business move.
For its part, SIE said it “respectfully questions” the CMA’s decision and how it came to it. For some background, the CMA said it was looking at the lifetime value of an average gamer to estimate Microsoft’s incentive to make Call of Duty exclusive to Xbox.
“SIE respectfully questions whether this can be the case for any model, in particular given the CMA’s explanation that ‘quantitative modelling is subject to uncertainties and has to rely on assumptions where information is imperfect,’ which ‘limits the weight we can give this type of evidence.’ More specifically, reliance on the revised [lifetime value] model is unsound because it includes serious conceptual errors that bias the analysis in favor of finding that Microsoft does not have an incentive to foreclose,” Sony said.
