The saga of Microsoft’s acquisition of Activision Blizzard continues to make headlines. Currently, the focus is on a review of the acquisition offer by British competition authorities. As a result, Microsoft has now had to admit that the Xbox Game Pass negatively impacts sales. This contradicts earlier statements.
Various competition authorities worldwide are dealing with Microsoft’s planned acquisition of Activision Blizzard. It is being examined whether the acquisition of the company behind titles like World of Warcraft, Diablo, or Call of Duty by the software giant could have a detrimental effect on competition in the highly competitive gaming market.
A preliminary report from the British Competition Authority CMA (Competition and Markets Authority) on the acquisition of Activision Blizzard by Microsoft shows how fiercely the companies are vying with each other.
The report contains a lot of explosive details. In it, Microsoft admits that the Xbox Game Pass negatively affects the sales of certain titles. It was recently revealed that the competition regulators are suggesting breaking up Activision Blizzard.
The competition authorities are looking at the influence of Call of Duty on Xbox and PS5 sales figures. What influence does the franchise have on consumer decisions?
Sony wants to prevent acquisition – Competition authorities also view the plans critically
What are the competition regulators investigating? The regulators fear that the acquisition could lead to a company with too much market power. The authorities criticize that the acquisition could result in less competition in the gaming industry. This would lead to poorer quality and higher prices for consumers.
The authorities are examining, among other things, whether individual titles in Activision Blizzard’s portfolio could persuade consumers to purchase the Xbox if they were offered exclusively for this console. This specifically concerns the Call of Duty franchise.
According to Sony, the franchise is a flagship of the industry. It would significantly contribute to console sales. If Microsoft decides after the acquisition to offer Call of Duty exclusively on the Xbox, this would mean massive financial losses for Sony. Should Call of Duty become part of the Xbox Game Pass, this would be a decisive argument for consumers to choose to buy an Xbox instead of a PS5.
Microsoft wants to appease competition authorities
What does Microsoft say? In the course of negotiations, Microsoft has now disclosed internal information. Contrary to previous statements, the inclusion of a game in the Xbox Game Pass does not lead to better sales.
Microsoft also submitted that its internal analysis shows a [redacted]% decline in base game sales twelve months following their addition on Game Pass.
An internal analysis from Microsoft shows that after a game is added to Game Pass for 12 months, a percentage decline in the sales figures of this title can be observed.
Preliminary report of the Competition and Markets Authority
This statement from Microsoft directly contradicts a statement made by Xbox chief Phil Spencer back in 2018. He stated that the inclusion of a game in the Xbox Game Pass leads to more sales. He justified this by saying that the Game Pass increases the player base. The more people play a game, the more players would notice the title. This, in turn, would lead to more people buying the title.
More about the acquisition of Activision Blizzard by Microsoft:
- Sony says: ‘Battlefield can’t keep up’ – Xbox downplays Call of Duty: ‘Neither special nor unique’
- Microsoft compares Call of Duty to Minecraft and explains why Starfield & Elder Scrolls 6 are better exclusive titles
- PS5: Sony comments on Microsoft’s acquisition of Activision Blizzard – ‘Call of Duty has no competition, will never have any’
What else is in the report? In addition to countless economic and antitrust issues, a statement from Activision Blizzard is likely to be of interest to gamers. This seems to support Microsoft’s statement.
According to the report, Activision Blizzard is quite critical of the possibility that their titles could appear in Game Pass after the acquisition. They believe that this would cannibalize B2P sales [buy-to-play sales]. Especially with new releases, they fear that an inclusion in the Xbox Game Pass could depress the sales numbers of titles like Call of Duty or Diablo.
Activision Blizzard explains why they had to sell themselves instead of buying EA
