Acquisition of Activision Blizzard by Microsoft: why the European Commission is concerned

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

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

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

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Call of Duty, sinews of war

Acquired in January for 69 billion dollars – a record for the sector -, Activision Blizzard is displaying serious successes in the flourishing 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 lusts are concentrated. With each new release – even though some years have been better than others – this first-person shooter franchise attracts tens of millions of players around the world. The latest opus, released in October, generated a billion dollars in sales in ten days. A record that says a lot about the strategic challenge of owning such a game.

For the Commission, it’s not just Call of Duty. The marriage of the two giants – Microsoft also develops games, beyond consoles – could more broadly lead to too great a reduction in competition in the PC operating system market, she believes. Users could also be discouraged from buying PCs that don’t run Microsoft’s Windows system, 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 weeks, the brand has been repeating that it will not remove Call of Duty from other consoles. “In January, we provided a signed agreement to Sony to secure Call of Duty on PlayStation, for at least several additional years beyond the current contract with Sony, an offer that goes well beyond the usual industry agreements. of the game”, declared again in September Phil Spencer, the CEO of Microsoft, to the American newspaper The Verge.

The removal of some games has already begun

A position maintained at the announcement of the investigation. “Sony, as an industry leader, says they’re worried about Call of Duty, but we said we’re committed to making the same game available the same day on Xbox and PlayStation. We want people to have more access to games, no less,” he said. However, contrary to the declarations of its leaders, 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. “Since so many of the world’s leading companies are now competing in the nearly $200 billion gaming industry, it’s understandable that regulators are trying to better understand this industry,” he said, noting that the group had already been given the green light. countries like Brazil.

The proposed takeover by Microsoft comes at a time when Activision Blizzard is going through a difficult patch. The group reported on Monday a 32% drop in net profit and a 14% drop in sales in the fourth quarter of its fiscal 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 turnover, behind the Chinese Tencent and the Japanese Sony, manufacturer of the Playstation.



A Ukrainian army BM-21 'Grad' multiple rocket launcher fires at Russian positions in the Kharkiv region on November 3, 2022 in Ukraine.By Frederic Encel

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