Sony identifies 4 errors with CMA's data model, says data is off by at …

A bit ago, the CMA determined that Microsoft has no ability or incentive to foreclose Sony in regards to the Microsoft-Activision merger. Now Sony has delivered a response to the CMA’s findings, calling the agency’s data modelling into question.

Sony identifies 4 errors with CMA's data model, says data is off by at least 70% 123Open Gallery 9

VIEW GALLERY – 9 IMAGES The CMA recently filed its own Provisionary Findings Addendum that concludes Microsoft has no incentive or ability to foreclose Sony using Call of Duty exclusivity.

This determination is based on what is called an LTV model, or a system that attempts to quantify the lifetime value of a video game player, which was used to estimate how Call of Duty exclusivity would affect both Microsoft and Sony. The model attempts to gauge the implied lost or gained value from consumers switching from PlayStation to Xbox if Call of Duty were to become exclusive. Based on the CMA’s findings, Microsoft has no real motivation to withhold Call of Duty on PlayStation, thus one of the CMA’s theories of harms–the partial or full foreclosure of rivals in the console gaming segment–has been squashed.

Predictably, Sony did not approve of this assessment, and the CMA has published Sony’s response to the new findings. Sony Interactive Entertainment legal counsel has identified four errors with the new PF (Provisionary Findings) report.

Sony identifies 4 errors with CMA's data model, says data is off by at least 70% 1Open Gallery 9Sony identifies 4 errors with CMA's data model, says data is off by at least 70% 12Open Gallery 9

First Error

Sony argues that the CMA’s LTV model, or lifetime value model, uses data that was specifically created by Microsoft for use in such a model. Sony says that the model is off by as much as 70% for a number of reasons, including the fact that the CMA’s data model only recognizes average users and not “highly-engaged Call of Duty users”.

Call of Duty players generate “significantly higher spending” than other users on PlayStation platforms, Sony says. Sony also has issues with how the CMA calculated Microsoft’s potential losses from pulling Call of Duty from PlayStation. Counsel further makes the point that Call of Duty will be many times more profitable to Xbox on a post-merger basis because Microsoft will not have to pay a third-party royalty to Activision.

Sony identifies 4 errors with CMA's data model, says data is off by at least 70% 2Open Gallery 9

Second Error

Here it looks like Sony may be accusing Microsoft of presenting potentially misleading information.

Sony says that the CMA used LTV data that was specifically prepared by Microsoft for such a revised model. However, the original data model used in the CMA’s first-published PF report indicates possible foreclosure incentives. To put it in another way, the first LTV model indicated Microsoft could gain quite a bit from making Call of Duty exclusive, whereas this new model, which includes information and data directly provided by Microsoft, indicates that Microsoft would lose tremendously by pulling Call of Duty from PlayStation.

Sony argues that the original LTV model that led to the foreclosure recognition from the CMA used contemporaneous documents, or documents that were essentially produced in ordinary business activities. The new LTV model, Sony says, “discards this contemporaneous evidence and instead adopts, without apparent explanation, Microsoft’s adjusted LTV estimates that are lower than those in its contemporaneous documents and were created solely for the purposes of this proceeding.” Sony cannot rightly understand how the CMA came to its conclusions based on the data provided.

Nearly all of the data included in the LTV models are redacted so it is very difficult to interpret specific findings.

Sony identifies 4 errors with CMA's data model, says data is off by at least 70% 3Open Gallery 9Sony identifies 4 errors with CMA's data model, says data is off by at least 70% 32Open Gallery 9

Third Error

Sony mentions a very interesting tidbit that hasn’t been talked about very much: The CMA’s LTV model do not reflect the “significant strategic benefits” of bringing Activision games to Game Pass. These benefits were not included in the original LTVs used for the first-published Provisionary Findings, nor are they present or included in the newly-revised Provisionary Findings Addendum. This indicates the LTV model did not reflect one of the biggest parts of the Microsoft-Activision merger.

In its new PF report, which concluded Microsoft had no incentive of partially foreclosing Sony due to the enormous losses it would incur from pulling Call of Duty from PlayStation, the CMA notes that the perceived gains from adding Activision games to Game Pass would not mitigate the losses of removing games from PlayStation entirely. However, Sony argues that this assessment is “not consistent with the CMA’s duty to base its decisions on evidence, rather than speculation.” If potential gains from Game Pass were not quantified in the LTV, then Sony believes the CMA’s assertion in regards to Game Pass to be speculative in nature.

Sony identifies 4 errors with CMA's data model, says data is off by at least 70% 4Open Gallery 9Sony identifies 4 errors with CMA's data model, says data is off by at least 70% 42Open Gallery 9

Fourth Error

The final error is based around how the CMA collected its evidence for the LTV model.

The CMA surveyed UK gamers in an attempt to determine how many people would switch from PlayStation to Xbox. Certain criteria was used to narrow the pool of gamers to those who were more regularly involved with Call of Duty. The data from the pool of surveyed users was narrowed to include those who had spent least £100 and 10 hours on Call of Duty.

These users were more apt to switch from PlayStation to Xbox, the CMA had found. Sony argues that this isn’t correct and that users who play for less than 10 hours shouldn’t be discounted; after all, these users did buy the game. Sony says that 10 hours isn’t a good measurement because it discounts users who buy the game simply to play the singleplayer campaigns; COD campaigns last around 6-8 hours, which is just under the 10-hour threshold.

Sony argues that these players should not be discounted from data.

Sony also confirms that they would have to make a payment in order to accept the 10-year Call of Duty licensing proposal.

frankie-and-benny-s listed on couponmatrix.ukfunction-18 listed on couponmatrix.ukpoundtoy listed on couponmatrix.ukproviz listed on couponmatrix.ukroutledge listed on couponmatrix.ukthomas-cook listed on couponmatrix.uk
frankie-and-benny-s listed on couponmatrix.ukDiscover delicious Italian American food for any occasion with Frankie & Benny’s. With a menu chock-full of hearty breakfasts, quick lunch bites and comforting main meals, Frankie & Benny's make it easy to celebrate or catch up with friends, and stop hunger in its tracks. The whole family can save with your Frankie & Benny’s voucher with loads of delicious meals for all ages. You'll also find plenty of vegan and gluten free options too - so a dietary requirement won't stand in your way! Do things your way by customising your own pizza or burger, or pick from an amazing range of Frankie & Benny classics and allow the experts to take care of the details.
function-18 listed on couponmatrix.ukLove golf? Then you'll love Function 18! A fantastic one-stop shopping outlet for all your golf clothing and accessories. Here, you'll find everything you need to play, practice and compete in style. The range includes top designers and covers everything from clothing and footwear to golf bags, balls and much, much more. Grab a Function 18 discount code and you'll be getting a hole-in-one when it comes to great products at incredible prices. Love golf and love fashion with Function 18.
poundtoy listed on couponmatrix.ukFun for all is the agenda at PoundToy, where the most popular toys, games and books come at unbeatable price. Whether your child loves to draw, build or break, a PoundToy discount code will help you save on those many little things that keep your kid smiling. Offering boundless ways to entertain on a budget, you can trust PoundToy and their bargains whenever the next birthday, celebration or holiday is on the horizon.
proviz listed on couponmatrix.ukCross-country runners to inner-city cyclists will appreciate the quality sportswear you can grab at Proviz Sports. With a dedication toward making every amateur athlete feel comfortable and capable of pushing themselves to the limit, you need only a Proviz Sports discount code to perform at your best on a budget. Exercise is hard enough to maintain, so give yourself a fighting chance and keep yourself in comfort with clothing from Proviz Sports.
routledge listed on couponmatrix.ukAs one of the most prestigious academic publishers with over 150 years of experience, Routledge is a fantastic place to find reference-led content on subjects as diverse as architecture and dentistry. This publisher is the authority on high-quality research, so you can trust Routledge to have your back whether you’re a university student, research assistant or professional. With books and essays covering the humanities, science and technology, engineering and more, when you use a Routledge discount code from Groupon, it’s more affordable than you think to get those grades soaring.
thomas-cook listed on couponmatrix.ukFly away in style with the help of Thomas Cook. Whether it’s a city break, backpacking holiday or a cruise you’re after, you’ll be able to make a major saving on your hotels, flights and activities in your dream destination with the help of a Thomas Cook discount code on top of your next booking. Simply type in your free dates, your top spot to visit and you’ll be on your way to sun, sea and sand in no time.