Microsoft and Activision Blizzard
The European Union has officially begun its investigation into Microsoft's acquisition of Activision Blizzard. According to what reported by Reuters, the European antitrust has sent surveys to developers to hear their opinions and possibly concerns about this $ 68.7 billion maneuver that could drastically change the balance of the market.The developers will have until October 10 to answer the questionnaire, which includes about 100 questions spanning various topics such as the following reported by GamesIndustry:
Whether the deal will affect the bargaining power for developers and publishers looking to sell console and PC games through Microsoft platforms and services How important is the Call of Duty franchise for platform owners and subscription service providers. Whether there would be viable alternatives if Microsoft decides to make Activision Blizzard's games an Xbox, Game Pass and Xbox Cloud Gaming exclusive. If the exclusivity of Activision Blizzard games would give Microsoft and by extension Windows an advantage on PC. If the large amount of data on Activision users would give Microsoft some advantage in the development, publication and distribution of video games. Whether the deal could change consumers' perception of which cloud gaming services are most attractive.
Activision Blizzard As we can see, the topics covered are of great importance and therefore the choice of listening to the opinions of the experts seems undoubtedly sensible by the European antitrust.
Europe began its analysis on the acquisition of Activision Blizzard in late September, with a deadline set for phase 1 on November 8th. Microsoft will also be able to provide further documentation by that date, before a possible phase 2 if European bodies deem a more in-depth investigation necessary.
Yesterday, the Brazilian antitrust gave its approval on the acquisition, explaining that in your opinion it would not lead to a monopoly risk.
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The EU Wants to Know if Microsoft’s Activision Merger Will Deter Competition
Microsoft’s acquisition of Activision Blizzard has drawn considerable attention from the gaming community. The deal, if approved, would see Microsoft owning the Call of Duty IP as well as other IPs in the Activision Blizzard repertoire, including Warcraft, Candy Crush, Tony Hawk, Diablo, Overwatch, Spyro, Hearthstone, Guitar Hero, Crash Bandicoot, and StarCraft.
The EU document demonstrates that the proposed acquisition, the largest acquisition in the gaming industry, will help Microsoft better compete with tech leaders like Tencent or Sony. The EU competition enforcer also questioned whether Activision’s vast user database would give the American software giant a competitive advantage in the development, publishing, and distribution of computer and console games.
The European Commission is anticipated to launch a four-month inquiry following its decision next month, highlighting regulatory worries about Big Tech acquisitions.
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Microsoft will have to wait until November 8 to see whether the European Commission will allow the deal to move forward. After all, the transaction is being reviewed by worldwide regulators due to antitrust concerns at a time of rising concentration in the gaming sector, so every piece of investigation is warranted.
It’s incredibly important for regulators to examine everything with a fine tooth comb and truly understand what the implications of a deal like this are. Microsoft has already gone to great lengths to argue its side of the deal by launching a website that clearly lays out the benefits to players, developers, and the industry and what some of its plans are long-term.
The U.K.’s Competition and Markets Authority expressed concern last month that Microsoft’s acquisition of Activision would “significantly lessen competition” in the gaming industry, so regulators there are also keeping an eye on the deal.
Sorcha O’Carroll, senior director of mergers at the CMA, said, “We are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming,” Microsoft stated that it is willing to work with the CMA to allay its concerns.
Regulators also wanted to know if the purchase would result in an adequate number of alternate vendors and if Microsoft would choose to make Activision’s games exclusively available on its Xbox, Games Pass, and cloud game streaming services.
They questioned the importance of the Call of Duty franchise to console game publishers, managers of computer multi-game subscription services, and providers of cloud game streaming services.
Another query was if competitors like NVIDIA GeForce NOW, PlayStation Now, Google Stadia, Amazon Luna, and Facebook Gaming would be viewed favourably when the transaction was finalized.
The questionnaire, which has around 100 questions, must be completed by October 10, 2022.
Both the UK’s Competition and Markets Authority and the US Federal Trade Commission are currently in the second stage of their investigations. According to reports, the first may decide by the end of November, while the second is expected to submit its final findings on March 1, the results of which may drastically affect the gaming industry.