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Microsoft and Sony are feuding behind the scenes over the Activision Blizzard acquisition, and Microsoft is no longer holding back with regulators.
By Tom Warren / @tomwarren
Oct 12, 2022, 6:23 PM UTC |
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Alex Castro / The Verge illustration
Microsoft is dissatisfied with Sony, as is the UK's Competition and Markets Authority. The UK regulator has indicated that Microsoft's $68 billion deal will be thoroughly investigated.The CMA published its full 76-page report (PDF) on its findings following Activision Blizzard's $7 billion acquisition last month. The.
Microsoft pleaded for its agreement on the day of the Phase 2 decision last month, but the gloves are now off. Microsoft calls the CMA's concerns "misplaced," claiming that the regulator "adopts Sony's complaints without considering the potential harm to consumers" and "incorrectly relies on Sony's self-serving statements that significantly exaggerate the importance of Call of Duty."." Microsoft even accuses the CMA of adopting "Sony's complaints without the appropriate level of critical review," implying that the regulator is simply paying too much attention to what Sony says.
The issue at hand is access to Call of Duty and concerns about the future of game subscriptions. "The CMA recognizes that ABK's newest games are not currently available on any subscription service on the day of release," the UK regulator says. "After the merger, Microsoft would gain control of this critical input and could use it to harm its competitors' competitiveness.".”
The Verge obtained Microsoft's full response to the CMA, which includes parts in which the company attempts to make it appear, ironically, that it is bad at gaming and can't compete. Microsoft claims that Xbox is "last in console," "seventh in PC," and "nowhere in mobile game distribution globally," and that it has no reason to harm or degrade rival cloud gaming services because it wants to "encourage the major shift in consumer behavior required for cloud gaming to succeed.".”
Microsoft may have finished last in console sales during the previous generation, but it is certainly investing billions of dollars to ensure that any future Xbox sales aren't less than half of those of the PlayStation and that its Xbox Game Pass bet pays off.
Sony and Microsoft have also been at odds over Call of Duty, and the CMA acknowledges this by expressing concern about Sony's future revenue from the game. "While Sony currently has a larger share of the console gaming market than Xbox, the CMA believes that losing access to Call of Duty (or losing access on competitive terms) could have a significant impact on Sony's revenues and user base.".”
Call of Duty is at the heart of the conflict between Sony and Microsoft.Image: Activision
Sony demonstrated how important Call of Duty is by calling Microsoft's offer to keep Call of Duty on PlayStation "inadequate on many levels.".According to The Verge, Microsoft Gaming CEO and Xbox chief Phil Spencer made a written commitment to PlayStation head Jim Ryan earlier this year to keep Call of Duty on PlayStation for "several more years" beyond the existing marketing deal Sony has with Activision. "After nearly 20 years of.
Microsoft now claims that keeping Call of Duty on PlayStation is a "commercial imperative for the Xbox business and the transaction's economics.".Microsoft claims that pulling Call of Duty from PlayStation would jeopardize revenue, and that "Microsoft has been clear that it is counting on revenues from the distribution of Activision Blizzard games on Sony PlayStation.".”
Microsoft also accuses Sony of not welcoming Xbox Game Pass competition and of blocking Game Pass on PlayStation. "This increased competition has not been welcomed by market leader Sony, which has chosen to protect its revenues from newly released game sales rather than offer gamers the option of accessing them through its subscription, PlayStation Plus.".This comes just months after Microsoft claimed in court documents that Sony pays for "blocking rights" to keep games off Xbox Game Pass.
If the battles in the United Kingdom are any indication, this acquisition could get messy as Microsoft and Sony compete behind the scenes to sway regulators. Microsoft has even created a dedicated website to highlight its arguments as it tries to persuade regulators that its massive deal isn't bad for gamers. We're still months away from final regulator decisions, but expect this battle to spill out onto the streets of the internet.
Join the conversation
Here's how it feels to wear the Dyson Zone.
Sony's DualSense Edge, the $200 PS5 gamepad, is put through its paces.
The battery life on Sony's $200 DualSense Edge for PS5 will be "moderately shorter."
Here's how it felt to use the first Matter devices in real life.
Fails of 2022: The Nintendo Switch was clearly showing its age.
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