We already know the CMA’s decision to end their investigation to what the Microsoft – Activision deal will do to consoles. However, there are still some interesting details in CMA’s statement that are worth talking about.
In the document titled Addendum to Provisional Findings, published on March 24, 2023, Microsoft had noted that their own reputation was on the line when it came to Call of Duty exclusivity.
This is what they stated on page 5 of the document:
“Reputational benefits: Microsoft stated that, as withholding CoD would directly contradict Microsoft’s public statements, the effect would be likely to be very negative given the significant gamer backlash that would inevitably occur following such a reversal.
Also, Microsoft submitted that, insofar as the suggestion is that those reputational harms would be outweighed by having CoD on Xbox, there is no good evidential basis for that conclusion.
However, Microsoft conceded that, to the extent that CoD causes switching, the five-year horizon in the LTV again likely means that any reputational benefits are captured in the calculation.”
Not that we needed to know this, but Microsoft has pointed out to the CMA that the backlash if they ever actually did make Call of Duty exclusive to the Xbox would be monumental. It is unlikely that gamers will switch consoles because of the high costs of doing so. But, that would only fuel that anger that would be directed towards Microsoft for such a decision. It should also be noted here that gamers do have a high distrust of corporations, in spite of (or perhaps, because of) the fact that most video games are produced by such big companies as well.
Microsoft follows up this statement by pointing out that they don’t believe that it would be worth it for them to attempt such a maneuver. This means they had weighed the possibility that Call of Duty exclusivity might sway gamers to buy Xboxes, whether they wanted to or not. They decided, lacking proof, that it probably isn’t, and it definitely isn’t worth finding out.
The last note is merely hypothetical. Microsoft confirms that if Call of Duty exclusivity could make gamers switch consoles, that would only be good for the next five years.
As gamers themselves know, there is something of a reset in between console generations, as gamers review their console purchasing decisions. There are, in fact, quite a few gamers who can afford to buy PlayStation, Xbox, and Nintendo platforms at the same time.
But the industry is fueled by trends, and gamers will bandwagon on the platform they believe will be the ‘winner’; AKA, the console they think will be the best seller of their generation. So many of those gamers will choose to stick to one platform.
In any case, Microsoft’s awareness they could shoot themselves in the foot by making Call of Duty exclusive is clearly good reason to believe they would not do it, even if the regulators didn’t come after this deal at all. They may have never even seriously considered it.
