Microsoft’s acquisition of Activision Blizzard: why the European Commission is concerned

One of the video game’s biggest successes will it be confiscated by Microsoft? Since the American giant’s takeover of Activision Blizzard, many gamers fear that the giant will reserve the publisher’s cult bestseller, Call of Duty, for users of the brand’s devices, thus displacing other consoles in the market, such as Sony’s PlayStation. These sounds from corridors are not whimsical according to the European Commission. An investigation has been opened, the institution states in a press release published on Tuesday 8 November.

The European Commission, the EU’s competition watchdog, explained that it particularly feared that Microsoft could “lock in access to Activision Blizzard’s video games” to consoles and PCs, and was tempted to introduce “strategies to ‘crowd out competing distributors'” ‘. In other words, Microsoft would be tempted to weaken the other manufacturers, led by Sony, by depriving them of the successes of Activision Blizzard. Such strategies could then lead to “higher prices, lower quality and reduced innovation”.

The European director announced that it would “undertake an in-depth investigation into the effects of the operation to determine whether its initial fears have been confirmed”. He now has 90 days, until March 23, 2023, to make a decision. The initiation of an in-depth investigation does not prejudge the outcome of the procedure, the Commission said. In September, the British competition watchdog also announced the opening of an investigation into the matter.

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Call of Duty, tendons of war

Acquired in January for $69 billion – a record for the sector – Activision Blizzard is showing serious success in the booming video game market. It is to this publisher that we owe World of Warcraft, or even Candy Crush, games among the most popular in the world. But it is especially on Call of Duty that the desires are concentrated. With each new release – although some years have been better than others – this first-person shooter franchise attracts tens of thousands of players around the world. The latest opus, released in October, generated a billion dollars in sales in ten days. A record that speaks volumes about the strategic challenge of owning such a game.

For the Commission, it’s not just Call of Duty. The marriage between the two giants – Microsoft also develops games, in addition to consoles – could more generally lead to too great a reduction of competition in the PC operating system market, she believes. Users may also be deterred from buying PCs that don’t run Microsoft’s Windows system, which is made more attractive by access to Activision Blizzard games.

“We continue to work with the European Commission on next steps and to address legitimate market concerns,” a Microsoft spokesperson said on Tuesday. For several weeks, the brand has reiterated that it will not remove Call of Duty from other consoles. “In January, we delivered a signed agreement to Sony to secure Call of Duty on PlayStation, for at least several years beyond the current contract with Sony, an offer that goes far beyond the game’s usual industry agreements,” declared again. in September Phil Spencer, Microsoft’s CEO, to the American newspaper The edge.

The removal of some games has already begun

A position maintained at the time of publication of the study. “Sony says as an industry leader they’re concerned about Call of Duty, but we said we’re committed to making the same game available on the same day on Xbox and PlayStation. We want people to have more access to games, no less,” he said. However, contrary to the statements of its executives, the company has already reserved the availability of certain games, such as Redfall and Starfield, causing concern for players on other consoles.

Activision CEO Blizzard Bobby Kotick said he was confident the deal would be completed by June 2023. “With so many of the world’s leading companies now competing in the nearly $200 billion gaming industry, it is understandable that regulators are trying to understand this industry better,” he said, noting that the group had already been given the green light. countries such as Brazil.

Microsoft’s proposed acquisition comes at a time when Activision Blizzard is going through a difficult patch. The group on Monday reported a 32% drop in net profit and a 14% drop in sales in the fourth quarter of the financial year. The operation thus aims to help the publisher get out of this bad period, and to propel Microsoft to third place in the world in this industry in terms of revenue, after China’s Tencent and Japan’s Sony, producer of the Playstation.



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