The European Union is currently questioning players in the video game industry to determine whether Microsoft’s takeover of Activision Blizzard poses a risk to competition. Further evidence of regulators’ mistrust of major corporate mergers.
The biggest takeover in video game history
The Redmond company announced the purchase of the Activision Blizzard studio in January 2022 for $68.7 billion. With titles like Call of Duty and World of Warcraft under its belt, Blizzard is one of the biggest publishers in the business, and Microsoft’s takeover is arguably the biggest deal of its kind in gaming history. video.
Last week, Microsoft submitted its proposed acquisition to the European Commission, which has until November 8 to approve it. If not, it will launch an investigation which should last at least four months.
In that context, the news agency Reuters reports that regulators have sent a document with 100 questions to video game developers, publishers, distributors, Microsoft’s competing operating systems as well as cloud service providers. Among them we find Nvidia, Sony, Google Stadia, Amazon Luna or even Facebook Gaming.
Their goal: to determine whether the takeover will have a negative impact on the competitiveness of the Redmond company’s rivals.
What did the EU demand from Microsoft’s competitors?
The document asks game companies whether Microsoft would have any incentive to block rivals’ access to Blizzard’s best-selling games, and whether the acquisition would affect their bargaining power over the terms of sales of console and PC games. via Xbox and its online game streaming. service, Game Pass.
Regulators are also seeking to determine the importance of the Call of Duty franchise to console game distributors, third-party desktop multi-game subscription services and video game streaming service providers. She thus asked the various operators if they thought Microsoft would make the studio’s major franchises exclusive to its products.
Their questions extend beyond the gaming industry. They thus asked whether the American giant’s exclusivity clauses would strengthen the Windows operating system against its competitors and whether the addition of Activision to the latter, to its cloud computing services and to its software tools related to games would give it an advantage in the video game industry .
For now, Microsoft wants to be reassuring: “ The European Commission’s review of the transaction is progressing in accordance with the expected regulatory timeline and process, and we remain confident that the acquisition will close in fiscal 2023 said one of its spokespersons.
Regulators are wary of such an acquisition
However, the European Union is not the first institution to be wary of acquisitions. If the latter should allow Microsoft to compete with the giants Sony or Tencent, it raises many questions. Last month, the UK’s Competition and Markets Authority (CMA) decided to open a full review of the takeover after finding it could lead to a ” significant reduction of competition in the game console, multi-game subscription and cloud markets.
The Federal Trade Commission (FTC), the US agency responsible for monitoring anti-competitive practices, is also investigating the matter. For now, Microsoft hasn’t detailed its plans for Activision Blizzard; we can pretty much assume that the publisher’s games will be included in the Game Pass offering, but the big question is whether they will be exclusive to Microsoft.
The Redmond company has previously downplayed the acquisition, saying Blizzard has no must-have games under its belt, but it’s unclear whether regulators agree.