Microsoft’s $68.7 billion acquisition of game developer Activision Blizzard has been in the news for quite some time. Britain’s Competition and Markets Authority (CMA) has opposed the deal from the beginning on the grounds that the deal could reduce competition and hurt gamers who can’t afford to buy more expensive gaming consoles. Microsoft, on its part, calmed the CMA’s concerns by signing a 10-year-long binding agreement with Nintendo and Nvidia to bring Activision’s gaming catalog to the Nintendo Switch and Nvidia’s GeForce Now in return for its support on its Activision acquisition deal. Tried to do. However, one company that has strongly opposed the deal is Sony.
Now, in a more detailed letter to the CMA, Sony has detailed several reasons why Microsoft’s acquisition of Activision could be harmful to competition.
what is sony saying
Sony stated in its letter to the CMA that if the deal goes through, Microsoft may, intentionally or unintentionally, reduce the quality and performance of Call of Duty on PlayStation compared to Xbox. The company has also said that after the deal, Microsoft may release a PlayStation version of Call of Duty (CoD), where bugs and errors are revealed only in the last level of the game or after subsequent updates. Even if these bugs are resolved, it will take time which will cause gamers to lose faith in PlayStation to provide a quality CoD experience.
here are the excerpts sony’s letter to CMA
a) As PF acknowledges, Microsoft may implement a number of strategies to foreclose access, in whole or in part, to the Activision Content. With respect to Call of Duty, SIE also clarified that, in addition to preventing access to existing or future Call of Duty titles, Microsoft may adopt one or more partial foreclosure strategies to reduce PlayStation’s competitiveness. . These strategies may include:
– Raising the price of Call of Duty on PlayStation;
– Reduced quality and performance of Call of Duty on PlayStation compared to Xbox;
– belittling Call of Duty for ignoring PlayStation-specific features (eg: improved controller haptics) or not prioritizing investment in such features;
– Restrict, degrade or de-prioritize investment in the multiplayer experience on PlayStation; Or
– Making Call of Duty available only on MGS on Game Pass.
b) Today, Activision is encouraged to reach an agreement with SIE to distribute Call of Duty. Following the transaction, the merged entity would profit from the failure to distribute Call of Duty on PlayStation. This dramatically improves the merged entity’s bargaining position and will allow Microsoft to receive a higher revenue share for its content than would be obtained on a merit basis with an independent actuary.
c) Following the transaction, Microsoft will be required to make an election regarding the support it will provide for developing any PlayStation versions of Call of Duty. Even if Microsoft acted in good faith, it would be incentivized to favor and prioritize the development of the Xbox version of the game, such as by using its best engineers and more of its resources. There would be no practical way for the CMA (or SIE) to monitor how Microsoft allocates its resources and the quality/quantity of engineers dedicated to the PlayStation version of Call of Duty, to ensure that the SIE’s Will be treated fairly and equally.
Microsoft may release a PlayStation version of Call of Duty where bugs and errors emerge only in the final level of the game or after subsequent updates. Even if such degradation can be detected quickly, any remedy will come too late, by which time the gaming community trusts PlayStation as the go-to venue for playing Call of Duty. Must have lost Indeed, as Modern Warfare II attests, Call of Duty is most often bought within the first few weeks of release. If it became known that the game’s performance on PlayStation was worse than on Xbox, Call of Duty gamers may decide to switch to Xbox for fear of playing their favorite game in a second tier or less competitive venue.
what microsoft is saying
Microsoft, on the other hand, has confirmed that it has no intention of making Call of Duty exclusive to the Xbox platform or in favor of COD time COD updates. The company has said that once the deal is complete, it aims to bring it to PlayStation. To continue to offer COD. While expanding its availability to other gaming platforms, namely Nintendo Switch and Nvidia GeForce Now.
“The inclusion of Activision content in Game Pass will encourage Sony to invest in its subscription offering: By enabling Microsoft to compete more effectively against Sony, the merger will allow Sony to improve its subscription offering.” can be expected to do, for the benefit of more than 46 million customers, resulting in lower prices, higher quality and/or more choice for console customers,” the company wrote.
“The merger will also benefit customers in the form of lower prices, more choice of high quality, and more innovation in mobile game distribution. This includes both end consumers of native mobile games and developers, each of whom are relevant customers of mobile app stores. ,” the company said.
Furthermore, the company also said that it has offered the same deal to Sony as it did to Nvidia and Nintendo. Here are the details of the deal:
Microsoft’s offer to sony
To resolve the console gaming SLC, Microsoft will commit to continuing to license CoD to Sony – including all current and future releases on Xbox consoles – for a period of 10 years. The key elements of the proposed licensing measure are given below:
Scope: The measure will apply to COD titles for consoles and related content (“COD Games”). CoD Games includes all old and current CoD titles available on PlayStation. In addition, all future CoD titles available on Xbox consoles will also be available on PlayStation.
– Duration: The treatment will be applicable for a period of 10 years.
– Console platforms: The measure will apply to all Sony consoles (including PlayStation 4, PlayStation 4 Pro and PlayStation 5) and any successor consoles.
– Parity: The measure would grant Sony parity with the Xbox platform on release dates, content, features, upgrades, quality and playability. Microsoft is prepared to commit to having an objective third party assessor.
– Economic Terms: All purchases will be subject to a revenue sharing arrangement with Sony []% of revenue from sales of CoD games, and content related to any CoD games.
– Wholesale Pricing Parity: The Measure will provide that the wholesale price (“wholesale price”) of CoD games offered to Sony is for the equivalent version of the game on the Xbox platform.
– Subscription and Streaming Rights: Any CoD game in the Microsoft Multi-Game Subscription is eligible to join Sony’s Multi-Game Subscription service at the same time and for the same duration.
The CMA is set to deliver its ruling on the deal on April 26, when we’ll know whether Microsoft will be allowed to go through with the deal.
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