The UK’s CMA (Competition and Markets Authority) fears that Microsoft’s acquisition of Activision Blizzard could make the value Xbox Game Pass is growing very bigBefore creating a monopoly on similar services and reducing competition.
According to a report released today by the CMA, Game Pass has a dominant position in the subscription services landscape and its competitors are significantly smaller in terms of subscribers and revenue, as well as having lower popularity and a smaller catalog. The concern of the British agency is that with the acquisition of Activision Blizzard, the service could grow to the point thatand “Create barriers to entry for competitorsreduce competition and significantly increase Microsoft’s market power..
“Most Game Pass competitors don’t have the popularity and variety of content that Game Pass can have once purchased. Depending on the importance of Activision’s content, current and future competitors may be affected by coverage strategies using that content.
“Subscription multiplayer services are a nascent market that is showing both direct and indirect effects. Combining Game Pass with Activision’s core catalog of games could substantially reduce competition following a complete or partial spin-off, or a combination of both. This could raise barriers to entry, reduce the number of competitors to one or more providers, and significantly increase Microsoft’s market power. A takeover could have this effect, or at least accelerate the process, thereby depriving consumers of a long period of cross-platform competition.”
Elsewhere in the document, the CMA states that even in the third party’s opinion, the acquisition would significantly increase the cost effectiveness of Game Pass.
“Microsoft’s first-party games are not available on any subscription service other than Xbox Game Pass, even when those titles are available for purchase on competing consoles. Microsoft’s internal documents further highlight its drive to undercut competitors in game subscription services.
“Third parties told the CMA that Microsoft would benefit from Activision content exclusively for Game Pass, and this would be consistent with Microsoft’s approach to previous acquisitions, including ZeniMax Media.”
However, it must be said that what What the CMA said is not entirely true. For example, Deathloop has been available in the PlayStation Plus Extra catalog for a few weeks, and Fallout 4 is included in the PlayStation Plus collection. On the other hand, it should also be noted that the inclusion of Bethesda titles in Sony’s services stems from agreements entered into by Microsoft prior to the acquisition.
It’s not just CMA’s misgivings about Microsoft’s acquisition of Activision Blizzard. UK antitrust fears Call of Duty could become exclusive.