Microsoft, Sony and Activision Respond to CMA’s Provisional Findings Alongside Six Different Game Companies

The CMA has published the responses of Sony, Microsoft,  Activision and six other gaming companies to its provisional findings.

Last month, the UK regulator published its provisional findings and provisionally concluded that Microsoft has the incentive to make Activision-Blizzard’s Call of Duty franchise exclusive to Xbox once the merger has been finalized. “The evidence available to the CMA, including data on how Microsoft measures the value of customers in the ordinary course of business, currently indicates that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own consoles (or only available on PlayStation under materially worse conditions)”, the CMA wrote in its findings.

After the regulator published its provisional findings, Microsoft issued a statement, saying that the company is committed to addressing the regulator’s concerns. Fast forward one month and we now have the responses of Microsoft, Activision, and Sony as well as responses from five anonymous gaming companies and the co-founder of 4J Studios – a Scottish developer responsible for porting Minecraft to consoles and other platforms. 4J Studios also worked on Perfect Dark for the Xbox 360 and the Xbox 360 Banjo-Kazooie ports.

The responses are quite extensive but we’ve included some parts of them below:

Sony

As expected, Sony states that Call of Duty is of major importance and believes that the transaction will cause harm to the industry. Blocking the megadeal between Microsoft and Activision could prevent this from happening. “Call of Duty’s importance would give Microsoft the ability to foreclose its rivals”, the conclusion in Sony’s response reads. “Microsoft’s previous acquisitions and strategic rationale indicate its incentives to foreclose. Foreclosure will cause irreparable harm to the console and cloud gaming industry, to the detriment of gamers and competition. The way to prevent that harm is for the Transaction to be blocked.”

Microsoft

Microsoft, on the other hand, strongly disagrees with the CMA’s findings and has said that it doesn’t have any incentive to make Call of Duty exclusive to Xbox. “The evidence presented in the Provisional Findings do not provide any plausible basis on which it could be found that the Merger is likely to give rise to an SLC in any market in the UK. Microsoft’s conduct in concluding legally
binding agreements with Nintendo and NVIDIA shows that it has neither the ability nor
incentive to make CoD exclusive to the Xbox platform.”

Activision

Activision also disagrees with the CMA’s findings and says that the CMA has “failed to read the evidence in its full and proper context.” Activision adds that the CMA “often takes statements out of
context to support its own case, for example by failing to consider the seniority of the
author and the clear position of Activision Blizzard’s senior management [redacted].

4J Studios

The co-founder has 4J Studios has also responded to the regulator’s provision findings and says that it’s “inevitable that companies like Microsoft need to gain access to more content and talent to justify their continued investment into large scale hardware platforms such as Xbox”. The co-founder and chairman adds that he doesn’t see the planned merger as “anything other than
a natural evolution of the industry and it does not give us any cause for concern for
our own future opportunities.”

We suggest reading the responses from the five other (anonymous) gaming companies as well. Alongside 4J Studios, all of these companies believe that the merger should go ahead.

The responses are worth the read if you’re interested in the Microsoft-Activision-Blizzard merger.