Microsoft’s acquisition of Activision Blizzard has been making headlines recently as it seeks approval from regulatory bodies around the world. With several countries already granting their approval, including South Africa, concerns remain about potential antitrust issues and the impact on the gaming industry. Here’s an update on the latest developments and what they mean for the gaming market.
In January 2022, Microsoft announced to pay $68.7 billion to acquire Activision Blizzard. One of the biggest deals in gaming industry. Since then, the acquisition has been the subject of investigations by regulators worldwide.
In a statement, the South African Competition Commission stated that it didn't think the merger would significantly lessen competition in the gaming industry.. Despite concerns that Microsoft and Activision might make Call of Duty exclusive to Xbox, the competition watchdog is satisfied that there is no incentive for the parties to foreclose competing game distributors, including Sony and Nintendo.
Concerns about market competition have been further allayed by the merging parties' commitments to keep supplying Call of Duty games to other console manufacturers.
Many countries have given their approval include Saudi Arabia, Brazil, Serbia, Chile, and Japan. However, United Kingdom Regulators and European Union are still expected to rule on the transaction. Competition and Markets Authority in the United Kingdom expected to release its decision by April 26 and the European Commission by May 22.
CMA has expressed concern about the impact on the cloud gaming market even though it no longer thinks the deal would significantly lessen competition in console gaming market. However, Microsoft’s willingness to offer game licensing deals to rivals may address these concerns, as it is seen as a potential solution to EU antitrust concerns.
Activision Blizzard merger has been sued by the Federal Trade Commission in the US due to antitrust issues. According to the Federal Trade Commission (FTC), agreement would grant Microsoft an excessive control over the gaming industry and possibly result to higher prices for consumers.
Microsoft's response to these worries is pro-competitive and would not misuse its market dominance to disadvantage consumers. The business also highlighted the fact competes highly in a market with powerful rivals like Amazon, Google, and Facebook.
The acquisition may or may not be completed if Microsoft is able to overcome these challenges.
Activision Blizzard's proposed acquisition by Microsoft raised concerns about its potential effects on gaming industry. While some regulatory bodies accepted the acquisition, others still need to make a decision.
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If the deal approved, Microsoft would gain ownership most well-known gaming franchises including Call of Duty and World of Warcraft. Which could give Microsoft advantage in the gaming industry. Microsoft said, it does not intend to make Call of Duty an Xbox-exclusive game, and wanted to continue working with other creators.
The acquisition might have effects on the cloud gaming industry as well. It might give Microsoft an edge over its competitors if it takes control of Activision Blizzard's cloud gaming technology. These issues could be addressed, though, by the company's willingness to offer rivals game licensing deals.