Microsoft & Acquisition Deal: Sony Claims CMA U-Turn "Irrational" & Would "Never Recover" From Degraded COD

Published: April 6, 2023 12:29 PM /


Microsoft Activision Acquisition

Today the UK's Competition and Markets Authority (CMA) published the responses from involved parties to its previous announcement that pretty much reversed its position on the acquisition of Activision Blizzard by Microsoft. 

The regulator's update to its provisional findings expresses the position that the acquisition is unlikely to substantially harm competition in the console market.


Unsurprisingly, Microsoft's response certainly sounds pleased, arguing that the CMA's conclusion is correct, but mentions that its potential gains from withholding Call of Duty from PlayStation are overstated even in the amended findings. 

Sony's response is also fairly predictable, albeit perhaps not in the vehemence of its opposition to the CMA's U-turn. The house of PlayStation, represented by law firm Cleary Gottlieb Steen & Hamilton, calls the CMA's change of tune "surprising, unprecedented, and irrational."

Sony also argues that the CMA underestimates the gains Microsoft would enjoy by withholding COD from PlayStation by about 70%, and also downplays the strategic benefit for Microsoft in adding Activision content to Game Pass. 


The house of PlayStation continues to hold firm on the position that "a considerable portion of users" would Switch to Xbox if the acquisition was passed. Interestingly, Sony partly justifies its assumption that "The single-player campaign of Call of Duty is one of its most compelling elements that is valued by gamers."

Another argument that Sony repeats is that Microsoft's handling of the Minecraft franchise is not relevant to what it would do with Call of Duty, while the example of Bethesda's acquisition is "highly probative."

More points argued by Sony include the fact that Activision would have no incentive to use "the advanced features in PlayStation not found in Xbox" and the implication that Microsoft might "degrade Call of Duty on PlayStation (including simply by not making it as good as it could be), raise its price, release the game at a later date, or make it available only on Game Pass."


According to Sony, COD fans are "passionate, knowledgeable, and sophisticated. Gamers engage with each title in the franchise immediately after its release, are keenly aware of a game’s price, quality, and features, and regularly compare the quality, performance, and features of their favorite games across PlayStation and Xbox" citing Digital Foundry and other sources as "highly influential."

Lastly, the house of PlayStation cites its own CEO Jim Ryan, who argues that receiving a degraded version of Call of Duty would:


seriously damage our reputation. Our gamers would desert our platform in droves and network effects would exacerbate the problem. Our business would never recover.

In conclusion, Sony pretty much demands another U-Turn from the CMA, expecting it to walk back on the reversal of its previous position. 

The CMA is expected to provide a ruling on the acquisition by April 26. This follows the conclusion of the Japanese regulator, which ruled in favor of the acquisition, mentioning that it wouldn't substantially harm competition. 

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