Microsoft is publicly pleading for its deal with Activision Blizzard to go ahead, just as the UK’s Competition and Markets Authority (CMA) has raised concerns. Microsoft surprised the gaming world earlier this year with its plans to acquires Activision Blizzard in a $68.7 billion dealby far the biggest in gaming. Now regulators are beginning to take notice.
the UK CMA says is “concerned that Microsoft’s early purchase of Activision Blizzard may substantially lessen competition in game consoles, multi-game subscription services, and cloud gaming services.” After an initial investigation phase, the CMA says it will move to what it calls a Phase 2 investigation if Microsoft can’t respond to your concerns within five business days.
A Phase 2 investigation will see an independent panel examine Microsoft’s deal in more detail and whether control over games like Obligations Y world of warcraft will damage opponents. In response, Microsoft Gaming CEO and Xbox boss Phil Spencer explained Microsoft’s position. in a blog post today.
Detailing Microsoft’s plans for games beyond Xbox consoles, Spencer says the company will follow a “principled path” in its approach to Xbox Game Pass and Obligations. Microsoft says it will Supervision, DevilY Obligations all available on Xbox Game Pass but they don’t prevent games like Obligations to be available on PlayStation.
“We have heard that this deal could be taken to franchises like Obligations away from the places where people currently play them,” says Spencer. “That’s why, as we’ve said before, we’re committed to making the same version of Obligations available on PlayStation the same day the game is released elsewhere.”
Spencer compares Microsoft’s Activision Blizzard deal to the company’s $2.5 billion acquisition of Minecraft. “We know that players benefit from this approach because we have done it with Minecraftwhich continues to be available on multiple platforms and has further expanded since Mojang joined Microsoft in 2014,” says Spencer.
Brad Smith, president and vice president of Microsoft, is even more direct about the Obligations situation. “We stand ready to work with the CMA on the next steps and address any of your concerns. Sony, as an industry leader, says it is concerned Obligations, but we have said that we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less.”
Microsoft has also previously argued that not to distribute games like Obligations at rival console stores “it just wouldn’t be profitable” for the company. In the documents presented to Brazil’s Administrative Council for Economic Defense (CADE) regulator, the company says a strategy of not distributing Activision Blizzard games on rival consoles would only be profitable if the games could attract a large number of gamers to the Xbox ecosystem, which which would generate revenue to offset losses from not selling these titles on rival consoles.
While the FTC, CMA and European Commission are still looking into Microsoft’s Activision Blizzard deal, Saudi Arabia became the first country to approve the acquisition last month. I understand that Microsoft still expects the deal to fully close in the spring of 2023, with plenty of months to go for competitors to voice their concerns and for Microsoft to make the case for this big acquisition. Spencer says he’s open and ready for the in-depth reviews to come:
“We will continue to engage with regulators in a spirit of transparency and openness as they review this acquisition. We respect and welcome difficult questions being asked. The gaming industry today is robust and dynamic. Industry leaders, including Tencent and Sony, continue to expand their deep and extensive libraries of games, as well as other entertainment brands and franchises, enjoyed by gamers around the world. We believe that a thorough review will show that the combination of Microsoft and Activision Blizzard will benefit the industry and gamers.”
Update, September 1, 8:35 am ET: This article has been updated with a statement from Microsoft Chairman Brad Smith.