Sony Stock (NYSE:SONY)
Sony (NYSE:SONY) is criticizing the United Kingdom’s (UK) apparent softening of its position on Microsoft’s (NASDAQ:MSFT) planned $69 billion purchase of Activision Blizzard (NASDAQ:ATVI), which Sony describes as “surprising, unprecedented, and irrational.” As a result, Sony’s stock declined in the market.
In an addendum to its provisional findings on the Microsoft/Activision combination, the UK antitrust regulator, the Competition and Markets Authority, announced two weeks ago that it was shifting its focus from console sales (and the rivalry between Microsoft’s Xbox and Sony’s PlayStation) to the growing cloud gaming market.
The Competition and Markets Authority (CMA) announced that it had “provisionally concluded” that Microsoft’s planned purchase of Activision Blizzard Inc. would not significantly reduce competition in the UK console gaming market.
On Thursday, statements from Sony, Microsoft, and London academic Joost Rietveld were published in reaction to the results.
Sony Interactive Entertainment responded, saying, “The CMA’s reversal of its position on its console’s theory of harm is surprising, unprecedented, and irrational.”
Sony stock argued that the preliminary findings “assessed a significant body of evidence in the round to support its finding that Microsoft would have the ability and incentive to withhold Activision content and that this would substantially lessen competition by foreclosing PlayStation.” The report said that the new annex’s conclusion—that Microsoft wouldn’t have the incentive to keep Activision’s successful Call of Duty exclusive to Xbox because of a possible “significant financial loss”—represents a “diametrically opposite approach” to economic models.
Naturally, Microsoft was more optimistic in its response: “Overall, Microsoft welcomes the CMA’s revised findings and agrees with the CMA’s conclusion that the Merger will not result in a substantial lessening of competition for the market for the supply of console gaming services in the UK.”
Microsoft also clarified, “It has no intention to withhold or degrade access to Call of Duty or any other Activision content on PlayStation.” This statement has been consistent with the company’s stance from the announcement of the Merger.
Activision Blizzard settled a lawsuit with the Department of Justice over esports compensation limitations this week.
Featured Image: Unsplash @ Omar Markhieh
Author Shariq Khan 
