Sony Influenced UK Activision Blizzard Probe, Says Microsoft
Microsoft fires back at its gaming rival Sony, alleging its objections were used by UK’s regulator to justify phase 2 probe
Microsoft has hit back at gaming rival Sony and alleged the UK competition regulator was influenced by complaints from the Playstation maker.
Microsoft said the UK’s Competition and Markets Authority (CMA) had relied on objections from Sony – concerning Redmond’s $69 billion acquisition of Activision Blizzard.
It comes after the UK’s CMA announced in September that it would conduct a deeper Phase 2 investigation of the acquisition.
Regulatory probe
It was back in January this year when Microsoft announced its biggest acquisition to date, by acquiring Activision Blizzard in an all-cash transaction valued at $68.7 billion.
Redmond said at the time that the deal would accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud, and would provide building blocks for the metaverse.
Ever since 2001 Microsoft has had a significant foothold in the gaming sector thanks to its Xbox console and gaming brand.
The Activision Blizzard acquisition however will give Microsoft access to a huge library of classic games that span the Playstation, Xbox and PC platforms.
These games include Call Of Duty, World of Warcraft, Diablo, Candy Crush, and Starcraft.
In July the UK’s CMA said it would begin Phase 1 investigation over whether the deal would reduce competition in the UK.
That Phase 1 investigation revealed regulatory concerns, leading to the CMA last month saying it would begin a deeper Phase 2 investigation.
The CMA said at the time it was concerned that Microsoft could leverage Activision Blizzard’s games, together with Microsoft’s strength across console, cloud, and PC operating systems, to damage competition in the nascent market for cloud gaming services.
Sony complaints
But now Reuters reported that Microsoft has said that the UK’s competition regulator had relied on objections from Sony, in particular its “misplaced” concerns about ‘Call of Duty’.
According to Reuters, Microsoft said the CMA had adopted Sony’s complaints without the “appropriate level of critical review.”
In its submission to the CMA, Redmond said Sony’s PlayStation had been the largest console platform for more than 20 years, and it was not credible to suggest its dominance would be challenged by losing access to one title.
“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,” Microsoft reportedly said.
It added that it had committed to keeping ‘Call of Duty’ on PlayStation.
Bad for competition?
“Our inquiry is about protecting competition in the interests of UK gamers and businesses. The Phase 1 decision identified three areas where the deal could cause harm: gaming consoles, multi-game subscription services and cloud gaming services,” a CMA spokesperson told Reuters in a statement.
“We have now launched an in-depth investigation and our findings will be published in the New Year.”
Microsoft made clear the acquisition was good for the gaming sector.
“This deal will benefit gamers, developers, and the industry as we seek to bring more games to more people,” a spokesperson for Microsoft said.
But it is perhaps no surprise that Sony does not agree with this.
Speaking to Reuters, a spokesperson for Sony PlayStation reiterated its view that the deal was “bad for competition, bad for the gaming industry and bad for gamers themselves.”
“This deal would give Microsoft’s Xbox ecosystem a unique combination of tech and content, and hence a dominant position in gaming, with devastating consequences for consumers, independent developers, and Sony itself,” he said.
The deal will require approval in the United States as well as other major jurisdictions including the European Union and China.
The deal has just received approval in Brazil.
