PlayStation could be significantly weakened by Activision’s Blizzard takeover, the UK’s Competition and Markets Authority says.
Yesterday, the UK’s Competition and Markets Authority (CMA) made public its concerns about the Activision Blizzard-Microsoft merger.
Among the concerns is that the acquisition could be a significant weakening for PlayStation.
In a summary consisting of 35 points, the CMA summarizes numerous concerns that could end up in a second phase investigation if they cannot be resolved. Regarding Sony’s competitiveness, it states:
“The CMA is concerned that full control of this powerful catalog, particularly given Microsoft’s already strong position in games consoles, operating systems and cloud infrastructure, could lead to Microsoft harming consumers by damaging the competitiveness of Sony – Microsoft’s closest games rival.”
“The CMA believes that in the short to medium term, the main competitor that could be affected by this behavior would be Sony. There is evidence that Microsoft and Sony compete closely in terms of content, audience and console technology.”
The agency also believes that the acquisition could be detrimental to Sony’s purchase of the next generation of consoles if gamers prefer to go Xbox. The risk that dropping Call of Duty could have a significant impact on revenue and users is listed as a reason.
“PlayStation currently has a larger share of the console games market than Xbox, but the CMA believes that Call of Duty is so important that losing access to it (or losing access on competitive terms) could have a significant impact on Sony’s revenues and user base.”
“This impact is likely to be felt most during the launch of the next generation of consoles, when gamers will be making new decisions about which console to buy. The CMA believes that the merger could therefore significantly weaken Microsoft’s closest competitor, which would be detrimental to overall competition in console gaming.”
The CMA also makes the argument that by offering Activision Blizzard’s games on Game Pass, Microsoft could eliminate competition.
“As the market for subscription gaming services grows with multiple games, Microsoft could use its control over Activision Blizzard’s content to exclude competitors, including new and future entrants in the gaming space as well as more established players such as Sony.”
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