Xbox angry with UK regulators siding with PlayStation over Activision buyout

Public spats over the Microsoft Activision buyout continue, with Microsoft now taking umbrage with UK regulators’ ‘misplaced’ concerns.

While Microsoft’s acquisition of Activision Blizzard has been given the thumbs up by Brazil and Saudi Arabia, it’s having some difficulty receiving approval from the UK’s Competition and Markets Authority (CMA).

As a reminder, the acquisition can only go through if it is approved by regulators across the world, whose job is to ensure such a deal won’t give Microsoft any sort of unfair advantage within the industry.

The CMA is being far more scrutinous with the deal than most others, having started a second, more detailed, investigation into the matter. Microsoft, unsurprisingly, isn’t happy about that and has publicly dismissed the CMA’s concerns as ‘misplaced.’

In something of a win for Sony, the CMA believes that Activision Blizzard’s titles becoming Xbox exclusive would be detrimental for Microsoft’s competitors.

Microsoft has been somewhat cagey about whether it intends to make future Activision releases Xbox exclusive. So far, it’s only assured that it will uphold existing agreements for the Call Of Duty series, but Sony’s Jim Ryan has implied that Microsoft intends on making the franchise an Xbox exclusive by 2028.

Plus, the company has already demonstrated its willingness to keep new acquisitions to itself. All of Bethesda’s future releases, for example, are so far only for Xbox, with no mention of a PlayStation release.

An Xbox exclusive Call Of Duty has Sony worried that PlayStation fans will switch platforms. Microsoft has already claimed that PlayStation fans are more loyal than its own and with the CMA appearing to take Sony’s side, it’s now arguing that Call Of Duty becoming an exclusive would make zero difference.

In a statement to GamesIndustry.biz, Microsoft said that if every Call Of Duty player on PlayStation did ditch it for Xbox, then Sony’s platform would still have a ‘significantly larger’ userbase. Although it didn’t share any figures to back this up.

If Microsoft is to be believed, such a discussion is pointless anyway since it’s added that taking Call Of Duty away from PlayStation owners would ‘alienate’ fans and ‘tarnish both the Call of Duty and Xbox brands.’

‘The suggestion that the incumbent market leader, with clear and enduring market power, could be foreclosed by the third largest provider as a result of losing access to one title is not credible,’ it said, referencing how, in terms of revenue made from video games, Sony outpaces Microsoft.

It also doubled down on how Call Of Duty totally isn’t that big of a deal, despite it being one of the biggest gaming franchises in the world and Microsoft dropping over £50 billion for its developer.

‘Sony is not vulnerable to a hypothetical foreclosure strategy, and the Referral Decision incorrectly relies on self-serving statements by Sony which significantly exaggerate the importance of Call Of Duty to it and neglect to account for Sony’s clear ability to competitively respond,’ it added.

‘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.’

Of course, Microsoft wasn’t going to say anything different, and the CMA doesn’t sound especially convinced by its arguments, at least so far.

With subscription services becoming more commonplace, it believes that the Activision buy out could allow Microsoft to keep Activision games locked to Xbox Game Pass.

‘The CMA recognises that [Activision Blizzard’s] newest games are not currently available on any subscription service on the day of release but considers that this may change as subscription services continue to grow,’ it said.

‘After the merger, Microsoft would gain control of this important input and could use it to harm the competitiveness of its rivals.’

Microsoft has argued the opposite, that Activision games on Game Pass would give customers more options. Although it doesn’t seem to have ruled out or denied the possibility of keeping those games exclusive to Game Pass.

In the middle of all this, Take-Two CEO Strauss Zelnick has said that he’s in favour of the buyout. In a Spotlight Conversation interview (which can be viewed below), he said ‘We’re certainly of the belief that it’s a good thing for Microsoft and for the industry.

‘It’s a highly fragmented business and there’s plenty of room for creativity to go around. And Microsoft is an ally of ours, and if this makes their business more powerful, we think that’s good for us.’

EA CEO Andrew Wilson was far more frank, saying that he approves the buyout because an Xbox-only Call Of Duty would benefit EA’s own Battlefield series – since it would have less competition on PlayStation.

Both EA and Take-Two have already said they are open to being acquired, including potentially by Microsoft.

Whatever the case, the CMA won’t be sharing its findings for another three months, with a final report not expected until March next year.

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