Sony calls UK regulator’s reversed stance on the Microsoft Activision deal ‘surprising and irrational’
Sony has criticised the UK’s Competition and Markets Authority (CMA) on its revised appraisal of Microsoft‘s proposed acquisition of Activision Blizzard.
After five months of investigation, the UK regulator provisionally found in February that the deal could reduce competition and “result in higher prices, fewer choices, or less innovation for UK gamers”.
However, a month later the CMA seeminglyreversed its decision, saying it had updated its provisional findings after receiving fresh evidence that alleviated some of its concerns about the $69 billion deal.
Sony’s response, published today by the CMA, questions the regulator’s new stance.
“The CMA’s reversal of its position on its consoles theory of harm is surprising, unprecedented, and irrational”, Sony’s response reads.
The PlayStation company argues that the CMA had “assessed a significant body of evidence” to come to its initial conclusion where it had suggested there would be an issue with the acquisition.
It adds that the CMA’s new “diametrically opposite approach” is based “almost exclusively on a single economic model on which it places ‘significantly more weight’ than other available evidence”.
Specifically, it claims that the CMA’s new findings are based on a new ‘lifetime value’ model, which shows how much an average player is worth to a company over time.
It says the new model suggests Microsoft would see a “significant financial loss” if it kept Call of Duty exclusive to Xbox, and that therefore there was no incentive to keep it off PlayStation.
However, Sony claims the new data the CMA was using was flawed, and that if the “errors” were to be corrected then the gains Microsoft would get from players switching to Xbox would be “three times as high as the lifetime
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