Microsoft will suffer major losses if Call of Duty becomes Xbox exclusive says UK’s CMA
The UK's Competition and Markets Authority (CMA) in its 400 page report has mentioned that Microsoft will suffer major losses if Call of Duty titles becomes Xbox exclusives.
The UK's Competition and Markets Authority (CMA) recently blocked the $69 billion acquisition of Call of Duty franchise owner Activision Blizzard by Microsoft. The regulatory body stated that the acquisition will alter the cloud gaming market and reduce choices for the gamers. The 400 page report of the CMA has revealed various details and explained the reasons behind blocking the Microsoft-Activision deal.
As reported by IGN, The CMA released a 400 page report in which they concluded that the claims made by Sony regarding the exclusivity of Call of Duty are not justified. However, the report mentioned that Microsoft would lose substantial money and added that it would not be financially profitable for the Xbox owner to engage in a total foreclosure strategy.
The CMA used various terminologies like “critical diversion ratio” to support its conclusive statement. By the term “critical diversion ratio” the CMA meant that the rate at which Call of Duty players on Playstation would need to switch to Xbox so that Microsoft earns profit from the deal, and how much of those switched players would spend on the Call of Duty in the first five years of the acquisition deal.
The CMA also mentioned the factors that can possibly result in a loss to Microsoft, one of the factors mentioned in the report was the potential hit to Microsoft’s reputation if it goes back to the promises made to keep Call of Duty on multiple platforms. On the other hand Microsoft has been signing deals with multiple cloud gaming platforms to ensure the regulators that the Activision acquisition deal would not affect the Call of Duty titles on other consoles in the long run.
Microsoft and Activision has already made their intentions clear to appeal the decision taken by the UK's CMA to prevent the $69 billion deal between the two.