Will Microsoft be able to buy Activision Blizzard? More than a year after the publisher of Windows and Xbox consoles announced its intentions, the merger has still not been finalized. In question: the reservations of anti-competitive authorities around the world, but also the Sony lobby, which is doing everything to derail the operation.
However, Microsoft has just won an important battle by obtaining the green light from the European Commission. Three weeks after the veto of the British competition authority (CMA), it approved the acquisition of Activision Blizzard, American publisher of successful video games like “Call of Duty”, “World of Warcraft” or “Candy Crush “. It still issues a condition: Microsoft will have to respect measures to guarantee competition in the market for dematerialized games accessible by streaming. These commitments “fully address the issues raised by the Commission”, the EU executive said in a statement.
Even with the support of Brussels, it is not certain that Microsoft can become the owner of Activision Blizzard. The project has been underway since January 2022, when the American giant wanted to get its hands on Activision for a record amount of $69 billion. This is one of the most expensive redemptions in the history of culture. For comparison, Disney paid “only” $4 billion for Star Wars. Microsoft and Activision are thus following the acquisition of 21st Century Fox by Disney in 2017, for 71 billion dollars.
Sony is worried
A takeover of such scope worries, starting with the Japanese Sony. This publishes the PlayStation console, the main competitor of the Xbox. He believes that acquiring Activision would give Microsoft too big of an advantage. He fears that Microsoft could “reserve” games like “Call of Duty” for its Xboxes, and stop marketing them on PlayStation. In March, he even assured that Microsoft could be able to provide “Call of Duty” in a degraded version on PlayStation. The American publisher has always denied. He offered Sony to market “Call of Duty” for at least ten years – an agreement that the Japanese company has so far not accepted. Nintendo, on the other hand, accepted the outstretched hand and will be allowed to distribute “Call of Duty” and other exclusives on its consoles.
However, it is not Sony that poses a problem to the anti-competitive authorities. “Microsoft would have no interest in refusing to distribute Activision games to Sony,” the Commission ruled, noting that PlayStation sells four times more than Xbox. “Sony could leverage its size, deep games catalog and market position to counter any attempt to weaken its competitive position.”
One step ahead of cloud gaming
The problem would rather be at the level of streaming games (“cloud gaming”). It is for this reason that the CMA rejected the takeover project, and that the American authority (FTC) launched proceedings in December to block it. Cloud gaming is playing on any medium, whether it’s a TV, tablet, smartphone, or whatever. It’s a recent concept, but buying Activision would allow Microsoft to get a head start on its competitors by bringing successful games to this market.
In April, the CMA said the merger could “change the future of the growing cloud gaming market and lead to reduced innovation and choice for UK gamers over the years”. Microsoft immediately appealed the decision. The green light from Brussels should provide him with solid arguments to defend himself, even if the CMA renewed its veto after the Commission’s decision. “If Microsoft does not win the appeal, it will not be able to proceed with the acquisition,” said Anne Witt, specialist in competition law at EDHEC, to AFP. “Unless, of course, he decides to exit the UK market, but that seems unlikely to me.” If the merger takes place, Microsoft will become the third player in the sector in terms of turnover, behind Tencent and Sony.