While concerns have been raised by Sony in particular, ultimately the CMA’s priority is in protecting consumers and not to preserve the status quo of competitors. This industry is far from static and one that frequently has
new entrants that have the ability to
quickly capture market share, such as had happened with
Fortnite. It is understandable that Sony is seeking to maintain its position, given it has invested a lot of capital, time and energy towards creating this.
However, the landscape is changing given the wide adoption of subscription-based services and cloud-based platforms in other industries. These have reduced the barriers to entry and such innovation has allowed consumers to have new methods to pay for content, along with having access to a wider range of content without sacrificing quality.
We believe Microsoft is seeking to propagate innovation and embrace the move towards subscription services and cloud gaming – it is unsurprising that a technology company can see where the direction of travel is headed.
By contrast, it seems that Sony may be looking at this transaction through the lens of a hardware company and not with the future development of the industry in mind. There is no evidence to suggest that this deal would inhibit Sony or any other rival’s ability to compete in the multi-game subscription or cloud gaming markets. The barriers to entry are low, the market is extraordinarily dynamic and new competition can arise through innovation and original content – all of which would be positive for consumers.
Ultimately, the
CMA should continue its focused work in
protecting consumers and not be dissuaded from facilitating the adoption towards subscription and cloud-based platforms in lieu of
preserving the status quo that market leaders have sought to maintain.
