Activision exec says UK regulator’s concerns over Microsoft acquisition focus only on Sony

A short thread to address the CMA’s thread… https://t.co/Mpr9TK1Baw

— Lulu Cheng Meservey (@lulumeservey) February 8, 2023

Lulu Cheng Meservey, EVP at Activision Blizzard, addressed Britain’s Competition and Markets Authority (CMA) disapproving provisional findings over its probe on the $69 billion Microsoft-Activision deal. In a series of tweets, Meservey expressed how the watchdog’s conclusions only focus on Sony and fail to mention other relevant details in its findings, including Microsoft’s 10-year COD licensing deal to its competitors, Sony’s market dominance, and the UK customers’ support for the deal.

CMA didn’t go easy in delivering its findings regarding the merger, stressing that it “could harm UK gamers.” Worse, the regulating body even indicated a better preference for structural remedies over behavioral remedies to approve the deal. In the document it released, it directly suggested partial divestiture of Activision Blizzard, which will sell off the company’s Call of Duty business and other titles.

The recommendations resulted from CMA’s concerns, including possible exclusivity, console and cloud competition, and the deal’s effect on the competition between Xbox and PlayStation. It claimed that the merger “could result in higher prices, fewer choices, or less innovation for UK gamers.”

However, Meservey, also serving as Corporate Affairs and CCO at Activision Blizzard, countered the different points of the findings and pointed out how CMA’s concerns greatly focused on Sony.

“The CMA is concerned the deal could ‘impact rival console gaming platforms,’ explained Meservey. “But it’s really just about one platform: Sony. Nowhere does CMA even mention Nintendo, which has already accepted Microsoft’s offer to guarantee COD access for 10 yrs— bringing games to MORE consoles.”

In addition, Meservey stressed how CMA voiced its concerns about the merger strengthening Microsoft without realizing how influential Sony actually is in the industry. The EVP specifically mentioned reports regarding Sony not considering Game Pass as a real competition and underlined Sony’s actual position in the market.

“Even if the CMA is only concerned with a single competitor, that concern is unfounded,” she said. Sony is the market leader by far. Having to defend that dominance results in more competition, not less. Sony was also offered guaranteed 10 yr access to COD, which they can accept anytime.”

Meservey also recalled the UK customers’ approval of the deal when CMA accepted emails from the public to gather opinions in October 2022 and shared CMA’s own mandate that aims for a “competition that works for people, business and the whole UK economy.”

“We hope between now and April we’ll be able to help the CMA better understand our industry, to ensure they can achieve their stated mandate,” said Meservey.