What you need to know
- The UK’s Competition and Markets Authority recently sought feedback on Microsoft’s purchase of Activision Blizzard.
- Around 75% of participants were in favor of the acquisition, and shared thoughts across a range of topics supporting the deal.
- The Competition and Markets Authority reviewed 2,100 emails on the merger.
Microsoft’s purchase of Activision Blizzard is being looked at by several governing bodies around the world. The UK’s Competition and Markets Authority (CMA) began an in-depth probe of the purchase earlier this year. The body then shared a statement about the purchase in October 2022 and asked for feedback about the acquisition. Respondents showed overwhelming support of the merger, with around 75% of participants sharing views in favor of the deal going through.
While the majority of those polled were in favor of the purchase, the summary of the findings (PDF) listed opinions both for and against Microsoft acquiring Activision Blizzard (via Idle Sloth on Twitter).
Here are the views expressed that were in favor of the deal:
- Sony and Nintendo are stronger than Microsoft in console gaming, and the Merger will help Microsoft to compete more closely against them.
- The Merger will not harm rival consoles because Microsoft has made public and private commitments to keep Activision content, including Call of Duty, non-exclusive. The availability of Minecraft on rival consoles shows that Microsoft’s commercial strategy is not to make games exclusive; 1 The CMA received approximately 2,600 emails, but some of these were excluded from our review because they contained abusive content (with no other substantive content), or were blank, unintelligible, stated to be from non-UK consumers, or not in English.
- It is unlikely that Microsoft would make Call of Duty exclusive due to its multiplayer nature. Making Call of Duty exclusive to Xbox would only create a gap in the market that could be filled by a rival cross-platform shooter game.
- Call of Duty has competition from a number of other games including Battlefield (Electronic Arts), Grand Theft Auto (Take Two) and FIFA (Electronic Arts).
- The Merger will push Sony to innovate, such as by improving its subscription service or creating more games to compete with Call of Duty.
- The Merger is a reaction to Sony’s business model for PlayStation, which has historically involved securing exclusive content or early access to popular cross-platform gaming franchises, such as Final Fantasy and Silent Hill.
- Microsoft’s plans to add Call of Duty to Game Pass are pro-competitive and will lower the price of accessing games for consumers.
- Microsoft would not make Activision’s content exclusive to Xbox post merger because it would lose significant potential revenue from rival platforms.
- Consumers could revert to buying games on a buy-to-play basis if Microsoft were to raise the price of Game Pass post-Merger.
- The Merger will lead to more funding and higher-quality games in the industry.
- The Merger will allow Microsoft to provide Activision with better guidance and leadership, and to encourage it to invest more in games other than Call of Duty.
- The Merger is pro-competitive in the mobile segment because it will create new options for mobile gamers and allow Microsoft to compete against Google and Apple, which are the two dominant mobile platforms.
- The Merger will not create competition concerns in cloud gaming services because there are other potential competitors, such as Netflix.
- Some industry participants have said they are not opposed to the Merger.
These opinions have been echoed around the web since opposition to the merger emerged. Microsoft President Brad Smith discussed several of the same topics, including Xbox Game Pass, cloud gaming, and the company’s long-term plans for Call of Duty on PlayStation.
Below is a collection of views shared by participants in the CMA’s poll that are against Microsoft acquiring Activision Blizzard. Interestingly, some of the points discuss the same topics as the opinions in favor of the deal but have the opposite takeaway.
- Microsoft is already dominant in PC operating systems, and this Merger is an attempt to gain a similar position in gaming.
- Microsoft has the resources to create an offering that competes with PlayStation exclusives without acquiring Activision.
- The Merger would lead to consolidation and would set a harmful precedent in the gaming industry of acquiring large publishers rather than encouraging organic growth.
- This would be the largest merger in gaming history, paving the way for a potential string of future acquisitions of publishers such as Take Two, EA, Ubisoft, thereby increasing concentration in the market.
- Microsoft will make Call of Duty exclusive to Xbox, just as it did with Bethesda after it acquired ZeniMax Media.
- Microsoft will have the incentive to make Call of Duty exclusive to Xbox post-Merger. This will adversely affect gamers who cannot afford an additional console and they would therefore switch to Xbox at the launch of the next console generation.
- Microsoft would be able to deteriorate the quality of Call of Duty games on PlayStation post-Merger, which could cause consumers to switch to Xbox.
- Microsoft can capture the multi-game subscription market after the Merger because it can afford to add games to Game Pass at a loss.
- Microsoft is already dominant in cloud gaming, and the Merger could affect the future of new entrants into that space.
- The Merger will raise barriers to entry for smaller studios and independent developers.
- The Merger will lead to an increase in Microsoft’s bargaining power in relation to game publishers.
