The tech giant told the UK's competition regulator that games put into Game Pass see a decline in sales during a year following their addition to the subscription service.
Amidst the ongoing scrutiny of its Activision Blizzard deal, Microsoft has tried to downplay regulators' concerns that the merger would create challenges for competitors to contend with its subscription service claiming that Game Pass negatively impacts the direct sales of games in its library.
Last week, the UK's competition watchdog, the CMA, released its provisional findings report on Microsoft's proposed acquisition of Activision Blizzard where it claimed that the merger could reduce competition in the console and cloud gaming markets and noted that it is willing to explore potential solutions and prefers "structural remedies", such as divestiture of a part of Activision’s business.
As spotted by GamesIndustry.biz, the report also highlights parties' views including Microsoft's admission that putting games into Game Pass leads to "cannibalization" of buy-to-play sales.
"Microsoft also submitted that its internal analysis shows a [redacted]% decline in base game sales twelve months following their addition on Game Pass," the document reads.
Microsoft's admission contradicts statements made by Microsoft Gaming CEO Phil Spencer in 2018, asserting that Game Pass increases sales rather than undermines them.
"When you put a game like Forza Horizon 4 which I can’t stop playing on Game Pass, you instantly have more players of the game which is actually leading to a lot more sales of the game," Spencer said at the time. " You say, 'Well isn’t everyone just going to subscribe for $10 and go play this thing?' But no, gamers find things to play based on what everyone else is playing."
In addition, in the document, the CMA noted that Microsoft's internal analysis has "some limitations" as the statistics apply to an entire year which, according to the regulator, is a long time period which makes it unclear whether subscription impacts the proportion of consumers making buy-to-play purchases.
Elsewhere in its report, the CMA cites Microsoft claiming that Activision is skeptical about adding its titles into subscription services on any platform because it believes that this would "severely cannibalise B2P sales, particularly in the case of newer releases."
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