This is a symbolic first win for Xbox, a minor setback for PlayStation. In Microsoft’s proposed acquisition of Activision Blizzard King, Brazil rejected most of the Japanese rival’s arguments to invalidate the case. One more small stone on Xbox’s long road before welcoming the tenor of video games into its midst.
For nine months and the announcement at the beginning of the year of the takeover bid proposed by the US group worth 68.7 billion dollars, it is not the international authorities that are stopping the union, but PlayStation. The father of PS4 and PS5 has continued to push to prevent its competitor from abandoning flagship licenses like World of Warcraft, Diablo, Overwatch (whose second version has just been released), candy crush The king’s side, and especially obligations in Activision. It is also this last game that crystallizes all the attention -and frustration- of PlayStation, reluctant to lose its other goose that lays the golden eggs with fifa.
Because if the franchise is not exclusive to PS4-PS5, but has often offered exclusive content, Sony’s video game branch fears above all that it will be for the competition once the sale is finalized. Phil Spencer, the head of Microsoft Gaming, was quick to reassure the Tokyo company that upcoming games would still be cross-platform, nothing helped. and the battlefield obligations it has also become the legal battlefield between the two armies of lawyers.
A takeover bid studied case by case around the world
Like any merger that can give rise to a dominant position in an industry, the file is in the sights of anticompetitive organizations around the world, wherever the companies are established, to study their interest, viability and consequences in the market. But it is up to each country to examine the case and take action. Because the alert threshold to initiate a procedure is different for each one, depending on the amount of income of the affected companies in the country for some, the number of employees or the competition problems raised for others.
Given the gigantic size of Microsoft and Activision Blizzard, it’s no surprise that the deal is under scrutiny from all sides, scrutinized by outsiders with little knowledge of the gaming industry. This also gives rise to some extensions of decision and procedure.
So, in the United States, it’s not really about approving the merger or not, but about looking at the documents to see if there’s something wrong with the deal. In absolute terms, the FTC (Federal Trade Commission in charge of the study of the file) cannot disapprove the agreement, it can simply block it and request additional information. Inaction amounts to tacit validation, as the organization has found nothing to add. And the FTC could also deliver its verdict by the end of November according to several US experts. An opinion that will inevitably weigh in the world scale and could turn into a snowball.
UK and Europe under scrutiny
The other sore spot for Xbox concerns the UK. The UK market has been one of Microsoft’s strongholds for years and its regulator, the Competition and Markets Authority (CMA), is reputed to be one of the toughest on the planet. The British authorities are proceeding in this way in stages. A first group of experts began studying the merger and asked for explanations about the commitments made by Microsoft to “solve competition problems”, in particular in response to Sony PlayStation’s concerns.
Brad Smith, president of Microsoft, made arguments such as the promise that obligations it would continue to be available on PlayStation for many years, but that was not enough to stop the process, where the ZeniMax (Bethesda)-Xbox merger had been closed at the first stage. The file has entered phase 2 with a new college of decision makers appointed to study the agreement process. The response should fall around February 2023, a pre-defined calendar period to review items before issuing the opinion.
The EU proceeds differently. Before actually starting the process of studying the file, the Commission usually interrogates all the players, those directly affected (Microsoft, Activision Blizzard), as well as those who could suffer collateral damage. Jim Ryan, head of PlayStation, was thus heard by the European authority to explain what he considers a competitive danger. It is after having listened to all the parties that Europe will enter phase 1 with an official study of the project and a defined deadline to decide or continue with the investigations. The EU could even conditionally approve the acquisition, asking Microsoft to make adjustments or waive certain points. But it seems more likely that the investigation will also move to phase 2 in early 2023.
“The European Commission’s review of the transaction is progressing according to schedule and expected regulatory process, and we remain confident that the acquisition will close in fiscal 2023,” Microsoft said. The case, therefore, should be completed before the end of next June (close of the fiscal year for Microsoft), once all the countries have taken a position. If l’Europe is concerned about près pour prendre global temperature, d’autres pays comme le Brésil et l’Arabie saoudite ont déjà donné leur feu vert à la fusion, rejetant les arguments de PlayStation jugés infondés sur le principe de concurrence désélibrée par the fusion.
It also convinces gamers and developers.
Convincing international organizations is one thing. Convincing gamers is another equally important aspect for Microsoft. For this reason, the computer giant set up a microsite dedicated to the acquisition of Activision Blizzard King to give its point of view, “the benefits” for players and developers, but above all to reassure everyone about its intentions. And that happens through a nice message in the form of a tackle to his great rival:
“Giving gamers choice in how they play their games makes gaming more accessible and leads to larger, more vibrant gaming communities. Choice is just as important for developers,” said Phil Spencer, CEO of Microsoft Gaming.
In 2014, the takeover of the Mojang studio by Microsoft had sown the same start of panic for the star game Minecraft, with many fearing to see the game reserved exclusively for Xbox consoles and Windows PCs. Nothing happened and the title to hundreds of millions of players has even expanded its means of play since then to be available on almost every possible platform.
Call of Duty, the siren song of Xbox
Since then, Microsoft has also evolved in its video game offer and no longer conceives of the console or the PC as its only gateways with big hits of exclusivities as loss leaders. Xbox now offers cloud gaming so you can enjoy your Xbox Game Pass catalog on smartphones, tablets, TVs, Macs, and even PCs or older consoles, anytime, anywhere. And to run this service, you need games.
Certainly, the Redmond house already has almost thirty studios working to fill the catalog, but it also and above all wants to bring the star games from third-party publishers such as Electronic Arts, Ubisoft, Square Enix and many others. be seductive
So a game like obligations it could be a fantastic figurehead for Xbox Game Pass where, like all Xbox Studios games, it would land at launch. Much more profitable as a siren’s song than as an exclusive to attract players.
Between paying 70-80 euros for the game on PS5 (part of which would go to Microsoft’s coffers) or having it “free” on the subscription service with possibly exclusive content as bonuses, Xbox would have a serious argument to bring new players . You still have to be able to show them that the grass is greener in other places than where they already play and for that, you have to leave the game on other platforms… An argument that PlayStation necessarily has in the back of its mind when the wolf cries for guard his flock.
Source: BFM TV
