Sony Claims UK Regulator Dropping Console Concerns With Call of Duty is 'Irrational' - News
by William D'Angelo , posted on 06 April 2023 / 3,537 Views
The UK regulator, the Competition and Markets Authority (CMA), last month published an Addendum to its provisional findings on Microsoft's Activision Blizzard acquisition. The regulator received new evidence that has led it to conclude that if the acquisition is approved it won't significantly lessen competition in the video game console market in the UK.
Sony Interactive Entertainment in its response to the Addendum said it was surprised by this change in position and that it is unprecedented and irrational.
"The CMA’s reversal of its position on its consoles theory of harm is surprising, unprecedented, and irrational," reads Sony Interactive Entertainment's response. "The Provisional Findings (PFs) assessed a significant body of evidence in the round to support its finding that Microsoft would have the ability and incentive to withhold Activision content, and that this would substantially lessen competition by foreclosing PlayStation."
Sony Interactive Entertainment added, "The Addendum takes a diametrically opposite approach and focuses almost exclusively on a single economic model on which it places 'significantly more weight' than other available evidence. That model, which is based on the lifetime value (LTV) of an average gamer, is used to estimate Microsoft’s incentives to make Call of Duty exclusive to Xbox.
"The PFs contained a similar analysis based on then available LTV data, which found that Microsoft would have 'strong incentives to foreclose.' The Addendum reaches a different conclusion based on new assumptions and preliminarily concludes that a revised LTV model suggests that 'making Call of Duty exclusive to Xbox would result in a significant financial loss for Microsoft post-Merger' and, as a result, that Microsoft would not have an incentive to withhold Call of Duty.
"The Addendum does not, however, reverse the PFs’ finding that Microsoft would have the ability to foreclose PlayStation or its determination that such foreclosure would substantially lessen competition. Nor does it call into question other evidence establishing Microsoft’s incentives to foreclose, including the 'strategic value to Microsoft' of expanding Game Pass and financial modelling considered to be subject to 'underestimation' which found that Microsoft’s incentives to foreclose are 'broadly neutral.'
"As to Microsoft’s past behaviour following acquisitions, the Addendum does not include any new evidence calling into question the PFs’ original assessment. Rather, it notes that the CMA simply places 'less weight' on that evidence."
The CMA still has concerns related to cloud gaming services, where it will continue to carefully consider responses provided in its original provisional findings. The CMA will issue its final report by April 26, 2023.
There was a report last month that Microsoft's remedies to the European Commission include concerns over cloud streaming, but makes no mention of video game console rival, Sony with its PlayStation.
The lack of any remedies related to PlayStation suggests the regulator no longer has any concerns about competition in the video game console market.
Microsoft has recently signed multiple 10-year deals to bring Xbox games on PC to three cloud streaming services - Nvidia's GeForce Now, Boosteroid, and Ubitus. Microsoft has also signed a 10-year deal with Nintendo to release Call of Duty on Nintendo consoles on day one with full content parity.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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That quality control portion is especially hilarious after their Last of Us PC port.
Yes, and Sony also said, "Call of Duty gamers are passionate, knowledgeable, and sophisticated." 2 minutes on voice chat will throw that out the window lol
Basically Sony wants to continue getting shit tons of free money just by CoD existing on PlayStation. Which is fine, but stop pretending it’s something else.
If only, Sony is not even afraid of such scenario they fully know MS will continue to provide CoD on their platform. Sony is simply afraid that MS will add this title to GamePass and shift the paradigm in gaming and by the same token shift the very metrics used to measure success in the console space.
More hilarious takes from jimbo.
Regulators finally starting to realize Sony is just trolling them on this whole thing.
"The Addendum takes a diametrically opposite approach and focuses almost exclusively on a single economic model on which it places 'significantly more weight' than other available evidence."
Except the addendum did not change the model with which the CMA had first introduced the console SLC, they only fixed a mathematical error in it. Strange that the erroneous version was fine when it did go your way but the fixed version is irrational now that it run awry to your arguments.
I would say the same for Sony and everyone else, nobody should be able to buy the biggest publishers out there. either they know the industry and can keep up themselves, or they are in the wrong place in the industry.
If Activision had a dominant market position, as in over 50% of the software market, then I would agree. But they don't, not even close. Even after the purchase, there will still be lots of other big game publishers such as EA, Ubisoft, Square Enix, Sony, Nintendo, Take Two, and too many others to list.
When the deal is through, you should think about abolishing the authorities.
If you let the biggest corporations buy up everything indiscriminately, there is no reason for such agencies to exist.
There is no indiscriminate. This entire deal has been looked at from varies angles for well over a year now. The problem is your personal bias about this deal.
