In a major development, UK regulators have approved Microsoft’s revised offer to acquire Activision Blizzard, the company behind popular gaming franchise Call of Duty. The Competition Markets Authority (CMA) has given its consent to the deal after blocking the original $69bn bid in April. The revised offer includes handing over the distribution rights of Activision’s games on consoles and PCs over the cloud to French video game company Ubisoft. While the approval signifies a significant shift in the games industry, it also raises concerns about Microsoft’s growing dominance in the market and the potential impact on competitors and consumers.
The CMA’s decision to approve the deal comes with certain criticisms directed towards Microsoft. The competition watchdog had previously expressed concerns about the takeover, and after blocking it in April, Microsoft’s President, Brad Smith, had voiced his concerns about the decision, stating that it was “bad for Britain.” However, CMA’s chief executive, Sarah Cardell, highlighted that Microsoft had the opportunity to address the concerns during the initial investigation but chose to pursue measures that the CMA knew would not be effective. This prolongation of the proceedings is seen as a waste of time and money.
Despite the criticism, the CMA believes that the revised deal will ensure competition and lead to better services and more choices for consumers in the gaming industry. By granting Ubisoft the cloud streaming rights of Activision’s games, the CMA aims to prevent Microsoft from having excessive control over this rapidly growing market.
On Microsoft’s side, the approval marks a crucial milestone towards completing the deal. Microsoft’s President, Brad Smith, expressed gratitude for the CMA’s thorough review and decision. Similarly, Activision Blizzard welcomed the news, considering it as “great news.” However, Sony, Microsoft’s main competitor in the gaming industry as the owner of the PlayStation console, has strongly opposed the deal. Sony fears that major Activision titles like Call of Duty could become exclusive to Xbox consoles in the future, potentially affecting Sony’s sales. The competition between Xbox and PlayStation is heavily reliant on access to high-quality content, and Sony is known for acquiring successful studios to strengthen its position in the market.
The acquisition of Activision Blizzard by Microsoft also mirrors a previous move by the tech giant when it purchased Bethesda, another renowned gaming studio. In 2023, Bethesda released its highly anticipated game, Starfield, exclusively on Xbox and PC platforms. The acquisition further solidifies Microsoft’s position as a dominant player in the gaming industry and poses a challenge to Sony’s dominance in the market.
While the approval of Microsoft’s acquisition of Activision Blizzard presents new opportunities and challenges for the gaming industry, there are several aspects that require caution. Firstly, the deal consolidates Microsoft’s power, potentially leading to reduced competition and limited options for consumers. The exclusivity of major titles may force consumers to switch platforms, limiting their freedom of choice. Secondly, the acquisition may impact the pricing of games, with Microsoft potentially having the ability to manipulate prices without significant competition. This could potentially result in higher costs for gamers.
Another concern arises from the influence and control that Microsoft could exert over the development and direction of the gaming industry. As Microsoft expands its reach, it may shape the trends and standards of the industry, potentially stifling innovative and diverse gaming experiences. Developers and studios may feel compelled to align with Microsoft’s preferences to ensure success and financial stability, limiting creative freedom.
Furthermore, the acquisition raises questions regarding data privacy and security. Microsoft’s access to vast amounts of player data and personal information raises concerns about how this data will be used and protected. Safeguarding user privacy and ensuring transparent data practices should be a priority for Microsoft to maintain trust among consumers.
In conclusion, the approval of Microsoft’s acquisition of Activision Blizzard by the UK regulators marks a significant move in the gaming industry. While it presents new opportunities and benefits for Microsoft and Activision Blizzard, it raises concerns about competition, consumer choice, pricing, creativity, and data security. As the deal progresses, it is crucial for regulatory bodies to closely monitor its impact on various aspects of the gaming industry and take necessary measures to maintain a fair and competitive landscape while protecting the interests of consumers.
