Microsoft attempts to strong-arm the system
Video games are big business in 2023, and that’s only going to accelerate. As the Verge Reports, Microsoft’s Activision Blizzard Acquisition has been approved by EU regulators – one of tech’s biggest companies has been given the green light to strong-arm the rest of the industry, and it seems like the end user might be the one that pays. What does Microsoft acquiring Activision mean for you?
Microsoft’s macro bid
In the world of console-based, mainstream gaming, there are three key players: Microsoft, Nintendo and Sony; Microsoft’s Xbox Series X and S, and Sony’s PlayStation 5 mark the ninth generation of consumer-grade, home-based consoles. Since Microsoft entered the sandbox with the original Xbox in 2001, it has vied for supremacy with Sony’s PlayStation. Each generation is a new battleground – the Xbox 360, for the longest time, eclipsed its competitor. The Xbox One? Not so much – this time around, Microsoft seems to think that monopolising the industry is the way to go.
As reported by the Verge, the company’s $68.7 billion deal (that’s £54.9 billion in GBP) to acquire Activision Blizzard has been approved by regulators in the EU, just weeks after regulators in the UK blocked the same acquisition. The European Commission has concluded that Microsoft, “would have no incentive to refuse to distribute Activision’s games to Sony.”
“Even if Microsoft did decide to withdraw Activision’s games from the PlayStation, this would not significantly harm competition in the consoles market.” – The European Commission
The future, however, of gaming, doesn’t seem to be anchored wholly in home consoles found underneath your television, and EU regulators found that even if Microsoft’s big bid doesn’t affect where customers can play their games, it could disrupt the distribution of PC and video game through cloud gaming services.
Microsoft acquiring Activision Blizzard – beyond the box
For years, the Call of Duty series, one of Activision’s big earners, has dominated as a multi-platform behemoth, across both PlayStation and Xbox brands. In 2023, Sony has enjoyed a 44.1% market share, compared to Microsoft’s paltry 16% – many users feared that Microsoft might be attempting to simply close the door on Sony’s Call of Duty player base. Microsoft, however, seems to be setting its sights on a future fight.
The European Commission has identified a remedy in its judgement: decade-long licensing deals that Microsoft has offered to competitors in the space, to assuage concerns that Call of Duty might jump ship. What’s more, a free license to customers in the European Union would allow end-users to stream all current and future Activision Blizzard PC and console games via any cloud game streaming service of their choice.
The UK’s Competition and Markets Authority (CMA), however, had a less optimistic view of Microsoft’s colossal offer, expecting that the acquisition could in fact lead to “reduced innovation and less choice for UK gamers.” Nintendo and Sony have traditionally had recognisable mascots in their camps – think Mario and Zelda, and Crash Bandicoot and Lara Croft. Sony’s crop, however, due to deft deals between publishers, has found its way to other platforms. In the walled garden home console space, players have often baulked at these forced, timed exclusivities, with many opting to simply go without that shell out for another overpriced system.
With luck, Microsoft’s Xbox division will stay true to its word and not erect such roadblocks in the future.
The nature of the beast
Ultimately, this is a bid for supremacy in a burgeoning tech space, rather than the ninth console generation, and it’s here that the CMA’s worries lie. Activision is now known as Activision Blizzard because of a similar acquisition – just on a much smaller scale. In 2016, the company acquired King Digital, the mobile game developer responsible for the impossibly popular Candy Crush series.
The company’s chief executive Bobby Kotick castigated the CMA’s move against the acquisition last month, stating he believed it was evidence that the UK was “closed for business”. As Microsoft’s walled garden grows, however, it lends credence to the CMA’s foresight. At this rate, Microsoft could end up with all the toys in the toy box, and if that happens, gamers will be forced to get on board with the Xbox brand, or go find their fun elsewhere.
Source: The Verge
What do you think of this proposed new deal? Is it good news for the end-user? Have your say below!
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