A few years ago Microsoft announced that they had reached an agreement to buy Activision Blizzard. This announcement was a bombshell in the gaming sector and many companies opposed it, Sony among them. Now we have news.
When a giant in one sector buys another giant in the same sector, the regulatory bodies of the various countries where these companies operate come into play. Here, in particular, we are talking about anti-trust and pro-market administrations.
For this reason, as soon as Microsoft announced the purchase of the Activision Blizzard studio conglomerate, all the alarm bells went off. Was it legal? Wouldn’t it turn Xbox into a monopoly in the gaming sector?
First regulator to make a decision: three more to go
After months of deliberations, the UK will finally rule this week on Microsoft’s $68.7 billion attempt to buy Call of Duty publisher Activision Blizzard.
The UK’s Competition and Markets Authority (CMA) is one of three key regulators around the world still examining the Microsoft deal, along with the U.S. Federal Trade Commission and the EU’s European Commission.
The CMA’s final decision is due before the deadline this Wednesday, April 26, and Microsoft has every reason to hope that its efforts to convince the UK authority will ultimately succeed.
Last month, the CMA published its provisional findings on the deal, stating that it considered that Microsoft’s bid to take over Activision Blizzard “would not lead to a substantial lessening of competition in relation to console gaming in the UK”.
This marks a radical change in the CMA’s attitude to approving the deal, after an earlier interim report raised serious doubts about whether it would go ahead, and warned sternly that such a deal “could harm UK gamers” and potentially result in “higher prices, less choice or less innovation.”
Sony fears Xbox banning Call of Duty on PlayStation
In particular, the CMA was concerned about the possibility that Microsoft would limit access to Call of Duty to PlayStation once the deal closed.
Microsoft has always argued that doing so would not make business sense, that it would lose access to a lucrative market of Call of Duty players for PlayStation and that the game would suffer as a result. Microsoft appears to have convinced the CMA.
“New data (providing a better understanding of the actual purchasing behavior of Call of Duty players) indicates that this strategy would be significantly flawed under any plausible scenario,” the CMA acknowledged last month.
To convince Sony and regulators, earlier this year, Microsoft president Brad Smith announced that he was offering a 10-year Call of Duty contract for PlayStation to sign, thus demonstrating that his intention is in no way to harm Sony with this move.
Video games that Xbox buys with Activision Blizzard
This announcement came at a time when Xbox kept announcing acquisitions of video game studios. After a somewhat bad generation for the green company, Microsoft decided to start buying studios to ensure good exclusives.
With the purchase of Activision Blizzard, Phil Spencer has secured a large number of studios and intellectual properties (IPs) that can unbalance the balance three years from now.
Overwatch 2, Diablo IV, Call of Duty, World of Warcraft, Candy Crush, etc. These games are not only industry heavyweights, they are also games that -many- are subscription-based or annual, hence they are money-making machines.
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