Speaking to the UK’s Competition and Markets Authority (CMA), Microsoft has claimed that its Game Pass subscription service harms the direct sales of games in its library.
Currently, Microsoft’s proposed acquisition of Activision Blizzard faces increased scrutiny by regulators across the world. The United States Federal Trade Commission has already announced that it will attempt to block the acquisition, and last week the CMA confirmed that the merger could “damage competition” in the games industry.
As part of the CMA’s provisional findings report (via GamesIndustry.biz), Microsoft has attempted to downplay concerns that the acquisition would make it difficult for rivals to compete with Game Pass.
The report claims that Microsoft’s “internal analysis shows a [redacted] per cent decline in base game sales twelve months following their addition on Game Pass,” suggesting that Game Pass can be harmful to game sales in the long-term.
Additionally, Microsoft’s internal documents claim that “adding titles to Game Pass would lead to cannibalisation of [business-to-person] sales.”
However, the CMA claims Microsoft’s internal analysis is “limited” due to the statistics applying to an entire year after their addition.
In a statement issued to NME, an Xbox spokesperson said: “We’re focused on helping game creators of all sizes maximize the total financial value they receive through Game Pass. Each game is unique, so we work closely with creators to build a custom program to reflect what they need, ensure they are compensated financially for their participation in the service, and allow room for creativity and innovation. As a result, the number of developers interested in working with Game Pass continues to grow.”
As part of its findings, the CMA has suggested that Microsoft makes some compromises to pass its acquisition, including selling off Activision’s Call Of Duty elements or other “practicable remedies” to its concerns.
Last week, Activision Blizzard CEO Bobby Kotick accused Sony of “trying to sabotage” the attempted acquisition.
Kotick claimed that Sony’s “entire leadership team stopped talking to anyone at Microsoft,” and speculated that it was “all Sony just trying to sabotage the transaction.”
“The whole idea that we are not going to support PlayStation, or that Microsoft would not support PlayStation, is absurd,” Kotick added.
Earlier in the month, Kotick claimed the UK risks “becoming Death Valley” if it opposed Microsoft’s bid.