CMA: Xbox Game Pass will become more expensive if Microsoft buys Activision

This week, the CMA gave its verdict, blocking the deal between Activision Blizzard King and Microsoft, and today we can see that the regulatory agency relied on one of the supposed benefits that Microsoft assured the purchase would bring to Game Pass users to block it.

The UK Competition and Markets Authority (CMA) defended its verdict and also released an extensive document of more than 400 pages explaining in detail the reasons why it did not give the green light to the deal.

Microsoft confessed that among its plans was, if the purchase of Activision were approved, to bring Activision games to its subscription service Xbox Game Pass (console and PC) on release day, which is why prohibiting it would make no sense since it would be a significant benefit for the consumer (RCB), unless these benefits were to be blocked for users.

Interestingly, this information did not work in favor of Microsoft, but rather the CMA used it to block the deal.

Why? The CMA considers that this benefit would be "limited" and believes that having Activision games available on Xbox Game Pass would represent a new way to pay for content that is already available for purchase on Xbox and "would only represent better value than the status quo for some consumers."

Most interestingly, the CMA expects the purchase of Activision and the arrival of its games on Xbox Game Pass to be sufficient "reason to increase the price of Game Pass" to compensate for the value that the Activision games will add to the service and, as a result, the value immediately given to users would be removed.

"We found that even the most modest price increase would significantly reduce or eliminate any potential RCB," the organization determined.

However, the CMA recognized that bringing Activision content to Xbox Game Pass is an "attractive scenario" and identified it as one of the reasons why many users support the purchase.

Nevertheless, the organization found that having this new way of obtaining Activision games "will not offset the overall harm to competition (and ultimately consumers) that would arise from this merger in the cloud gaming services market."

At the moment, it is known that Microsoft will appeal the CMA's decision, but we do not know what their arguments or evidence will be to make the organization change its mind, apart from the fact that the process will be long before a resolution is reached.