CMA Says Microsoft Would Lose 'Substantial' Money By Making Call of Duty Exclusive in 'All Plausible Scenarios'

ign.com:

Among the many findings in the more than 400-page report released by the UK's Competitions and Markets Authority blocking the acquisition of Activision Blizzard by Microsoft, the agency concludes that the fears put forward by Sony regarding Call of Duty exclusivity are unwarranted. In fact, the UK regulator determines that Xbox would lose "substantial" money if it ever tried to keep Call of Duty all to itself.

While the exact numbers have been redacted to protect the privacy of the third-parties involved (Sony, Xbox, and Activision Blizzard), the report specifically models two theoretical scenarios where Microsoft could attempt to remove Call of Duty from PlayStation platforms, before concluding that "it would not be financially profitable for [Microsoft] to engage in a total foreclosure strategy."

The conclusion is drawn from, among other things, the "critical diversion ratio," which is the rate at which PlayStation Call of Duty players would need to switch over to Xbox in order for it to become profitable for Microsoft, and how much those new players are likely to spend on Call of Duty in the five years following a total foreclosure strategy by Microsoft. By analysing the lifetime total value (LTV) of Call of Duty players, the CMA estimates that Microsoft would see a net loss in the billions over those five years.

The CMA's analysis takes a variety of factors into account, from the potential reputational hit to Microsoft were they to go back on their public statements about Call of Duty exclusivity, to the benefits to Microsoft's Game Pass subscription, Microsoft's history of keeping certain exceptionally popular franchises multiplatform (e.g. Minecraft), and more. Ultimately, that told the story to the CMA that any