There is a realistic prospect of a substantial lessening of competition in gaming consoles, multi-game subscription services, and cloud gaming services,” the firm said in an extensive document. The CMA believes that the acquisition of exclusives like Call of Duty and other potential exclusivity on Xbox will create a sizeable network effect on Microsoft’s platform. A network effect is where a console with a lot of gamers attracts more content, which in turn attracts more gamers.
“The CMA is concerned that having full control over this powerful catalogue, especially in light of Microsoft’s already strong position in gaming consoles, operating systems, and cloud infrastructure, could result in Microsoft harming consumers by impairing Sony’s – Microsoft’s closest gaming rival – ability to compete as well as that of other existing rivals and potential new entrants who could otherwise bring healthy competition through innovative multi-game subscriptions and cloud gaming services.”