Microsoft’s big push for this deal is a direct play on the competition with gaming industry giants Tencent and Sony. The latter has publicly stated that this could affect fair competition in the market, particularly when it comes to Activision Blizzard’s flagship games such as Overwatch and Call of Duty – as the company behind XBox and Gamepass, Microsoft would technically be in a privileged position to make games like Call of Duty exclusive to their own platforms and consoles, in addition to direct control of the titles. Addressing Sony’s concerns, Microsoft said in a statement in October that it was “committed” to making Call of Duty available “same day” on both XBox and Playstation. But with the scale of the fallout that could result from Microsoft breaking such a commitment, neither Sony nor the EU is satisfied. Image credit: MarketWatch
Microsoft says the deal is focused on mobile gaming
Microsoft has steadfastly maintained that no Activision title will be taken away from its competitors. In a statement in September, Microsoft had said in a statement that it would “follow a course of principle” and not deprive players of where they currently play games like Call of Duty. They also said cross-platform services won’t go away, citing the 2014 deal to acquire Mojang, creator of the ubiquitous Minecraft title. In the same statement, Microsoft also pointed out that it was primarily pursuing this merger because of Activision’s capabilities as a mobile game developer, suggesting that the PC and console gaming sectors were not necessarily their biggest targets with this deal. They added that they were confident that the details of this deal would prove to be in the best interests of the industry as a whole.
Microsoft misses Commission’s remedy deadline
The transaction to complete this merger was notified to the authorities in September, after which a preliminary investigation had been launched. At that point, the UK’s Competition and Markets Authority had also taken cognizance of the transaction and said a merger could lead to a “substantial lessening” of competition in the UK. Shortly thereafter, the EU raised similar concerns and sought remedies from Microsoft in relation to its proposed bid. The deadline for Microsoft to submit these remedies was October 31, and the tech giant missed it, prompting a deeper investigation into the deal. “The preliminary investigation indicates that Microsoft may have the ability, as well as a possible financial incentive, to engage in exclusionary strategies against competing distributors of Microsoft’s console video games, such as preventing those companies from distributing Activision Blizzard’s console video games on with the consoles or the downgrading of the terms and conditions for their use or access to these video games,” the European Commission said in a statement. It is generally understood that companies do not submit remedies during the first stage of the review, as doing so would open a months-long investigation too early into the deals. In this case, as the EU opens Phase 2 of its investigation, the lack of submission looks like a move by Microsoft to buy more time. The European Commission will take its decision on March 23, 2023. As things stand, the UK is also exploring this deal and so is expected from at least a portion of the markets that will need to approve the deal – Australia, New Zealand, Japan and South Korea are some notable names in this the forehead, the front line in combat .
