The UK Competition and Markets Authority today published Sony and Microsoft’s full arguments on Microsoft’s proposed acquisition of Activision Blizzard. The watchdog is currently investigating the proposed takeover for its potential effects on the market and possible hindering of competitiveness and previously invited interested parties to present their arguments for and against the merger.
Posted on the official UK government website, Sony’s arguments run to 22 pages and make fascinating reading. The maker of PlayStation has expressed concerns about the merger. Of particular concern is the future of the Call of Duty series, which Sony says is of fundamental importance to its platform.
Activision’s shooter series is one of the most popular and profitable in video games, but it’s especially important for Xbox and PlayStation, where titles sell in the millions around the world. Sony has argued that if Microsoft is allowed to take over Activision Blizzard, this could hurt PlayStation if there is a chance that Microsoft would make the series exclusive to its platform or through its Game Pass service. Xbox boss Phil Spencer has repeatedly stated that this won’t happen, and has even said that CoD could stay on PlayStation for years to come, but Sony remains unsatisfied or convinced.
In Sony’s arguments before the CMA, the Japanese company said that “Call of Duty players are exceptionally important to PlayStation” and stated how many of its user base were CoD players and how much revenue the series generated for PlayStation. (the exact amount figures are redacted from documents released to the public).
Furthermore, he stated that Call of Duty is not a series that can be recreated or copied. “Call of Duty is too entrenched for any rival, no matter how well equipped, to catch up,” he said, citing the example of Electronic Arts. While EA is also a big third-party developer, like Activision, Sony said the company hasn’t been able to produce a rival to CoD with its Battlefield series. He made a comparison in sales figures, with CoD selling over 400 million copies as of August 2021, while Battlefield had sold 88.7 million copies.
Under Microsoft’s own arguments, the Xbox maker has pointed to Nintendo’s success without having access to Call of Duty. Sony, for its part, dismissed this, saying it “misses the point.” The CMA has also noted that Nintendo offers something different to the market compared to Xbox and PlayStation, as their products are more family-friendly. However, under point 14, page 8, of Sony’s argument is something that reads a little unsure of what the market leader is.
“Microsoft claims that Nintendo’s differentiated model demonstrates that PlayStation does not need Call of Duty to compete effectively. But this reveals Microsoft’s true strategy,” Sony writes.
“Microsoft wants PlayStation to become like Nintendo, to be a less close and less effective competitor to Xbox.”
Clearly, Sony is very concerned that, following the proposed merger, Microsoft will become the “one stop shop” for all top-selling shooters like Call of Duty, Halo, Gears of War, Doom, and Overwatch, and that it would be free of serious competitive pressures, as he argues. It doesn’t matter that Doom is also available on Switch and that Sony hasn’t been able to develop its own successful shooter series (while also acquiring Bungie to get into both the shooter and live service).
The entire 22-page document is an insightful read, and one gets the undeniable feeling that Sony is incredibly concerned about the acquisition. On the other hand, the proposed $68.7 billion merger is unprecedented in video games and would see one of the richest companies on the planet, in the form of Microsoft, take ownership of perhaps the world’s largest game publisher. There are many other issues and concerns detailed in the document, while Microsoft’s 111-page arguments have also been published.
Those who want a closer look at Sony and Microsoft’s arguments can find them on the UK government website. here.
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