CMA narrows Activision concerns after revising console model

The UK’s Competition and Markets Authority narrowed its provisional concerns over Microsoft’s Activision acquisition on 24 March. It now expects no substantial reduction in console competition. Cloud-gaming concerns remain, with a final report due by 26 April.

Photo: efes, 2015. Original photograph via Wikimedia Commons. CC0 1.0. Recompressed; responsive crops.

The published addendum explains the financial change. Earlier modelling compared five years of gains from customers switching to Xbox with one year of lost PlayStation profits. The revised calculation accounts for five years of foregone profits, including in-game spending.

The CMA also used newer Xbox customer-value data. It rejected a further adjustment for later adopters because likely switchers more closely resemble early buyers.

The result is a significant loss from withholding Call of Duty under every scenario the regulator considers plausible. Precise amounts are redacted.

The CMA separately reconsidered tactics that could worsen PlayStation’s offering without removing the game entirely. It provisionally found these wouldn’t materially undermine PlayStation’s ability to compete.

The change therefore rests on revised incentives and a separate assessment of lesser restrictions. It doesn’t settle the cloud investigation or approve the acquisition.

Related: February’s provisional findings.