GET IT ALL: How Sony is trying to derail Microsoft’s acquisition of Activision Blizzard

Due to the lack of electronic components, the expected battle between the next generation consoles is disappointing. Nearly two years after the PlayStation 5 and Xbox Series X and S launched in late 2020, manufacturers Sony and Microsoft have abandoned their traditional sales war. From now on, it is with a stroke of redemption that the two rivals collide.

While a consolidation of the video game market is underway, everyone is putting up their pawns. However, Microsoft seems to have eliminated the competition with the announcement of the acquisition of Activision Blizzard on January 18. With this $68.7 billion deal, the Xbox maker could get its hands on iconic video game franchises like Call of Duty, World of Warcraft, Diablo and Candy Crush.

• Where is the sale of Activision Blizzard?

After its announcement at the beginning of the year, the takeover bid has passed a symbolic but crucial stage. On April 28, 98% of the shareholders of the Activision Blizzard group validated the sale to Microsoft. As of now, the marriage has until June 2023 to be ratified. But this will have to go through an agreement of the competition authorities.

• Why is the operation monitored in particular?

If the sale goes through, Microsoft would become the third largest player in the video game sector, behind China’s Tencent and Japan’s Sony. But it is the scale of the acquisition that worries competition regulators. If such an amount has never been put on the table in the field of video games, it is the consequences of the takeover bid that must be studied.

In the United States, antitrust laws seek to limit or prevent monopolies by certain companies in a market. This is why the US Federal Trade Commission (FTC) has been asked to investigate this matter. But in total, there are three competition authorities that Microsoft will have to convince. As the GamesIndustry site explains, in addition to the FTC, British and European authorities will also have their say.

• Where are the checks?

The US competition authority has completed its first phase of review. It consists of consulting all the competitors through questionnaires. Now, a second stage of verification is underway to determine the impact of the sale on the video game sector. In the UK, the first phase will end in September. On the other hand, the European investigation has not yet started

These decisions could jeopardize Microsoft projects in case of refusal. But conditions can also be implemented to approve the sale limiting its consequences. It is precisely for these reasons that Microsoft’s competitors, Sony -maker of the PlayStation- in the lead, are taking advantage of this period to play their influence.

• What is the main point that could derail the sale?

One of the biggest franchises in the industry, Call of Duty strikes more fear. The shooter license (owned by Activision) is a best seller every year. Above all, it allows Sony to offer privileges on its PlayStation for many years to come. By purchasing the new yearly play on the Japanese console, players can access content and try versions of the game in advance.

If the license changes hands, Sony should logically lose its profits to Microsoft. The American might even favor his own customers: Xbox gamers.

• Are Sony’s fears legitimate?

The day after the announcement of the acquisition of Activision, the PlayStation gaming community was already concerned about a possible exclusivity of the game, that is, a marketing only on certain platforms. More recently, the Japanese company considered the game series to be essential and capable of influencing a gamer’s choice of console purchase. An argument that resonates even more in the context of a renovation of the arcade machine park linked to the launch of PlayStation 5 and Xbox Series X and S at the end of 2020.

However, Microsoft quickly wanted to reassure regulators. The Xbox maker has announced its intention not to deprive its rival of Call of Duty titles. He even admitted that an exclusivity of the game would not be economically profitable. Therefore, Sony’s fears seem exaggerated.

These various positions have been informed through questionnaires from the competition authorities. If the American, British and European entities are the main ones to be able to decide the fate of Microsoft’s acquisition of Activision Blizzard, other countries are interested in the sale. This is especially the case in Brazil and New Zealand, some of whose documents have been made public.

• Have other indiscretions been revealed in these documents?

During the examination of the Brazilian documents, in particular, Sony’s superiority in terms of console sales was confirmed. Discreet about the number of copies of machines sold during the previous generation, Microsoft has formalized its poor business performance. The American company has recognized that the PlayStation 4 has sold at least twice as much as the Xbox One.

Also in exchanges with the Brazilian authorities, Microsoft complained that its rival had paid development studios to prevent them from integrating certain games into the Xbox Game Pass catalog. This service allows players to access a variety of titles as part of a monthly subscription.

This low marketing blow is part of the new console war in which manufacturers are fighting for the performance of their machine, the exclusive games, but now also for the quality of the services offered.