The British regulator sides with Microsoft over concerns about Call of Duty on PlayStation

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Britain’s Competition and Markets Authority (CMA) has now sided with Microsoft over concerns the software giant could address Duty from PlayStation if the proposed Activision Blizzard deal is approved. The regulator is still concerned about the deal’s impact on the cloud gaming market and will complete its investigation by the end of April.

“After considering the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial reduction in competition in console gaming services because the cost to Microsoft of keeping Call of Duty off PlayStation outweighs the possible benefits of taking such measures. said Martin Coleman, chair of the independent panel of experts conducting the CMA’s investigation.

The CMA had initially provisionally concluded that Microsoft was withholding a strategy Duty of PlayStation would be profitable. Not happy with that conclusion, Microsoft publicly criticized the regulator’s math earlier this month, arguing that the CMA’s financial modeling was flawed.

The CMA has changed its financial model and sided with Microsoft

The CMA used a financial model that compares five-year gains to losses on just one year, and Microsoft argued it had “obvious errors” that ultimately skewed the results. The CMA has now updated its model and admits Microsoft would actually suffer financial losses if it withheld Duty from Playstation.

“We considered the submissions of the parties and third parties about our LTV model and made adjustments where necessary,” the CMA says in a document published today (PDF). “Based on our updated results, our quantitative modeling indicates that a total foreclosure strategy would result in a significant net financial loss to the parties under all scenarios we considered plausible.”

Microsoft says it welcomes the CMA’s decision to correct its financial model. “We appreciate the CMA’s rigorous and thorough review of the evidence and welcome the updated preliminary findings,” Rima Alaily, Microsoft corporate vice president and deputy general counsel, said in a statement to Microsoft. The edge. “This deal will give more players more choice in how they play Duty and their favorite games. We look forward to working with the CMA to resolve any outstanding issues.”

Sony, one of the few opponents to the deal with Microsoft, said in filings with the CMA last month that it was concerned about Blizzard’s proposed acquisition of Activision and the future of it. Duty. Sony said it fears Microsoft could raise the price of Dutymaking it available only on its own Xbox Game Pass subscription service, and even strategically or incidentally improving the quality and performance of Duty on PlayStation.

The CMA has not yet commented on these specific concerns, but the regulator is clearly unconcerned that Microsoft is trying to completely withhold Duty from PlayStation anymore. Phil Spencer, CEO of Microsoft Gaming, tried to reach a settlement Duty on PlayStation debate once and for all in November, which is definitively stated in an interview with The edge that the game will remain on PlayStation:

Original Duty on PlayStation, not coupled with having to carry Game Pass, not streaming. If they want a streaming version of Duty we could do that too, just like we do on our own consoles.

There’s nothing behind my back. It is the Call of Duty Modern Warfare II doing great on PlayStation, doing great on Xbox. The next game, the next, next, next, next, next [game]. Native to the platform, no need to subscribe to Game Pass. Sony doesn’t need to use Game Pass on their platform for that to happen.

Nothing is hidden. We want to keep shipping Duty on PlayStation without any kind of weird ‘aha, I found the trap’, as Phil said ‘our intention’. I understand some people’s concerns about this, and I’m just trying to be as clear as possible.

The CMA’s position could now lead to Microsoft and Sony striking a deal Duty on PlayStation. Microsoft has offered Sony a 10-year contract Duty, but the PlayStation maker has not yet signed the license. “Microsoft has shown no real commitment to a negotiated outcome,” Sony said in its CMA filing last month. “They dragged their feet, engaged only when they felt the regulatory outlook darkened, preferring media negotiation to contact with SIE.”

However, Sony may have waited for the deal to be blocked. Jim Ryan, Sony’s PlayStation chief, has reportedly made it clear that the company is not interested in a deal with Microsoft. ‘I don’t want a new one Duty agreement. I just want to block your merger,” Ryan said on Feb. 21 (the day of the EU meetings), according to Activision’s executive. Lulu Cheng Meservey.

Activision Blizzard has now responded to today’s CMA announcement. “The CMA’s updated preliminary findings demonstrate a better understanding of the console gaming market and demonstrate a commitment to supporting players and competition,” says Messerve. “Sony’s campaign to protect its dominance by blocking our merger cannot dispel the facts, and Microsoft has already presented effective and enforceable solutions to address any of the CMA’s remaining concerns. We know this deal will benefit competition, innovation and consumers in the UK.”

While Microsoft has now addressed a major concern Duty, the CMA is still examining the impact of its deal on the cloud gaming market. “Our preliminary view that this deal is of concern in the cloud gaming market is unaffected by today’s announcement,” said Coleman. “Our investigation is on track to be completed by the end of April.”

Microsoft recently signed cloud gaming deals for its Xbox PC games in another bid to win over regulators. The Xbox maker has signed 10-year deals with Boosteroid, Ubitus and Nvidia to run Xbox PC games on these rival cloud gaming services. This also includes access to Duty and other Activision Blizzard games, if the deal is approved by regulators.

Microsoft also faces scrutiny from the European Commission and the Federal Trade Commission (FTC). The FTC sued last year to block Microsoft’s purchase of Activision Blizzard, and that investigation is still ongoing. Reuters reported earlier this month that Microsoft’s Actvision deal is likely to be approved by EU regulators. The two big deals Microsoft recently signed with Nintendo and Nvidia will reportedly satisfy lawmakers in Europe and help the company get its $68.7 billion deal approved.

Update, 10:30 a.m. ET: Article updated with statement from Activision Blizzard.





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