The Competition Markets Authority (CMA) in the UK has stated that the planned mega-acquisition of Activision Blizzard by Microsoft could have some serious repercussions for competitors and gamers alike. The main concern surrounding this deal is the potential prevention of market competition from their main rival, Sony. Naturally, the green team is pointing the finger at Sony for stirring it up.
As part of a gigantic $69B deal to acquire Activision Blizzard, Microsoft must satisfy market regulators like the CMA in the UK and the Federal Trade Commission (FTC) in the US. Though the deal has already been approved in Brazil and Saudia Arabia, Microsoft still has to satisfy these key markets. It doesn’t end there though, as Microsoft must also appease others like China and the EU.
Sony has introduced concerns with UK regulators by complaining that the acquisition could harm competition. Sony has specifically named multi-game, subscription, and cloud-based services as areas of concern. Naturally, Microsoft claims that the CMA’s concerns are ‘misplaced’ and that the regulator took Sony’s input without critical review. In response, Microsoft cited Sony’s 20-year market dominance as a clear point of bias which conflicts with their involvement with the complaint.
Sony’s complaint focuses on the power position that would come from combining Microsoft’s already significant reach in multiple services with those of Activision Blizzard. Microsoft has sub, cloud, and multi-player-based services like Azure Cloud Services and Game Pass. Activision Blizzard, on the other hand, has major titles like Call of Duty and World of Warcraft. Yeah.
Microsoft’s position is that “The Referral Decision incorrectly relies on self-serving statements by Sony which significantly exaggerate the importance of ‘Call of Duty’ to it and neglect to account for Sony’s clear ability to competitively respond.” That’s basically corporate speak for “Sony was exaggerating to preserve their position but they can totally keep up if they wanted to.” Microsoft made clear that it believes this is a last-ditch effort by Sony to complicate and potentially jeopardize the deal.
The CMS has a slightly different perspective, saying “The CMA recognizes that [Activision Blizzard’s] newest games are not currently available on any subscription service on the day of release but considers that this may change as subscription services continue to grow. After the Merger, Microsoft would gain control of this important input and could use it to harm the competitiveness of its rivals.”
What it means for gamers:
This is far more than simply defining whether or not the CMA likes the prospect of the acquisition or not. The review has already failed the first phase with the CMA and is undergoing a second phase review by the FTC. If it fails approval by these regulatory authorities, the acquisition would likely fail altogether. That would be bad for everyone involved, including gamers at some point.
A failed acquisition with this size price tag could result in layoffs, interruptions, shut-downs, and even the closure of properties. I wouldn’t suspect any of the actual titles to be in jeopardy long-term though. If successful, expect a slew of your favorite titles from Activision Blizzard to join Microsoft’s suite of game services.
Microsoft has reaffirmed that making titles like World of Warcraft or Call of Duty platform-exclusive is neither reasonable nor desirable. Honestly, I don’t see that changing anytime soon either. Unfortunately, failure could set an important precedent, discouraging other studios and organizations from approaching deals like this going forward. Not to mention sending Sony the message that it has the power to sway deals like this in the future.
However you cut it; this all seems like some heavy, last-circle battle royale action between two major players who always seem to be in the winners’ circle anyway. I’d bet the recently announced, shutdown of Google Stadia isn’t adding any comfort either.
Hey Nintendo, pass the popcorn.