Sony slams UK's narrower focus in Microsoft-Activision deal review
Christian Petersen
Sony (NYSE:SONY) is slamming what looks like a lighter stance in the UK on the proposed $69B acquisition of Activision Blizzard (NASDAQ:ATVI) by Microsoft (NASDAQ:MSFT), calling a reduced focus on the videogame console market "surprising, unprecedented, and irrational."
Two weeks ago, UK antitrust regulator the Competition and Markets Authority issued an addendum to its provisional findings on the Microsoft/Activision combination -- and the big news was that previous attention on console sales (and competition between Microsoft's Xbox and Sony's PlayStation) was giving way to a bigger focus on the cloud gaming market.
"The CMA has provisionally concluded that the anticipated acquisition by Microsoft Corp. of Activision Blizzard Inc. will not result in a substantial lessening of competition in relation to console gaming in the UK," the agency said then.
Thursday brought the publication of responses to those findings, from Sony, Microsoft, and London professor Joost Rietveld.
"The CMAâs reversal of its position on its consoles theory of harm is surprising, unprecedented, and irrational," Sony Interactive Entertainment said in its response.
The earlier provisional findings "assessed a significant body of evidence in the round to support its finding that Microsoft would have the ability and incentive to withhold Activision content, and that this would substantially lessen competition by foreclosing PlayStation," Sony said. It argued that the new addendum takes a "diametrically opposite approach" to economic models with its finding that Microsoft wouldn't have an incentive to make Activision hit Call of Duty exclusive to Xbox because of a potential "significant financial loss."
Microsoft's (MSFT) response was naturally more upbeat: "Overall, Microsoft welcomes the CMAâs revised findings and agrees with the CMAâs conclusion that the Merger will not result in a substantial lessening of competition for the market for the supply of console gaming services in the UK."
"Microsoft has been clear since the announcement of the Merger: it has no intention to withhold or degrade access to Call of Duty or any other Activision content on PlayStation," Microsoft added.
Activision Blizzard this week agreed to a settlement with the Justice Dept. in a suit tied to salary caps for esports.