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Gov.UK: UK CMA has concerns with Microsoft - Activision Blizzard merger: Has been referred to 'Phase 2' of investigation

 

Quote

Microsoft / Activision deal could lead to competition concerns

 

The Competition and Markets Authority (CMA) is concerned that Microsoft’s anticipated purchase of Activision Blizzard could substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services (game streaming).

 

From:

Competition and Markets Authority

Published

1 September 2022

 

Microsoft is 1 of 3 large companies, together with Sony and Nintendo, that have led the market for gaming consoles for the past 20 years with limited entries from new rivals. Activision Blizzard has some of the world’s best-selling and most recognisable gaming franchises, such as Call of Duty and World of Warcraft. The CMA is concerned that if Microsoft buys Activision Blizzard it could harm rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms.

 

The CMA has also received evidence about the potential impact of combining Activision Blizzard with Microsoft’s broader ecosystem. Microsoft already has a leading gaming console (Xbox), a leading cloud platform (Azure), and the leading PC operating system (Windows OS), all of which could be important to its success in cloud gaming.

 

The CMA is concerned that Microsoft could leverage Activision Blizzard’s games together with Microsoft’s strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services.

 

The CMA considers that these concerns warrant an in-depth Phase 2 investigation. Microsoft and Activision Blizzard now have 5 working days to submit proposals to address the CMA’s concerns. If suitable proposals are not submitted, the deal will be referred for a Phase 2 investigation.

 

Phase 2 investigations allow an independent panel of experts to probe in more depth the risks identified at Phase 1.

Sorcha O’Carroll, Senior Director of Mergers at the CMA, said:

 

Following our Phase 1 investigation, we are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming.

 

If our current concerns are not addressed, we plan to explore this deal in an in-depth Phase 2 investigation to reach a decision that works in the interests of UK gamers and businesses.

 

At Phase 2, the CMA appoints an independent panel to examine the deal in more depth and evaluate whether it is more likely than not that a substantial lessening of competition will occur as a result of the merger - a higher threshold than Phase 1.

 

It typically builds on the work and evidence from Phase 1 with more third-party engagement via requests for information and use of its statutory powers in gathering internal documents. At Phase 2, the CMA will also carry out further in-depth review of the merging parties’ internal documents which show how they view competition and the market.

 

 

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Let’s be fair though Xbox buying ABK is a power move and a half. I’m not convinced it’s anti-competitive, but clearly Sony feels so and you can’t blame them. They also don’t have a way to clap back. So I can see why they are complaining about this.

 

I don’t think it’s a bad move, and I don’t think the deal is anti-competitive. I don’t think who holds the keys to CoD holds the keys to the entire game subscription concept. 
 

But it is still a big thing. 
 

I think the news that came out that Sony makes deals with developers to not be on Gamepass is more anti-competitive in a sense. We can’t rival this service but we can do our best to hold it back. Like that’s kind of shitty.

 

For a company that has said that they don’t believe in subscription models is a long term smart move for games. They sure do seem frightened by it

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30 minutes ago, Maf said:

I think the news that came out that Sony makes deals with developers to not be on Gamepass is more anti-competitive in a sense. We can’t rival this service but we can do our best to hold it back. Like that’s kind of shitty.

 

Eh? It's just a part of the games industry, you think Nintendo and Microsoft don't make these kinds of deals with developers/publishers behind closed doors? Lol. It's been going on probably since the start of the industry, even in the days Sega was a big player in the industry.

 

When any exclusivity deal gets signed with any developer/publisher there's a clause in there that x game can't be put on y platform for z amount of months. It's just part and parcel of exclusivity details. If you think that's shitty you should be mad at the whole industry and exclusivity deals as a whole.

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They’re not paying for exclusivity on games they’re paying for non-exclusive games to not be on Gamepass 

 

https://www.eurogamer.net/microsoft-claims-sony-pays-developers-blocking-rights-to-keep-games-off-xbox-game-pass

 

At least according to Xbox

 

I’m not angry about it either. Business is business. But it’s less respectable business in my view 

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Eh, I just see this as inevitable corporate bickering that comes with subscription services. 

 

As these services improve (on Sony's side as well), expect things to become more fractured and resemble the current TV streaming ecosystem.

 

Anyway MS can't be the ones to cast stones when it comes to being anti-competitive, they are the model example of that lol (moreso in corporate/productivity software than games however https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp. )

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Yeah I’ve said similar on here before in regards to Gamepass and rivals. I think services like this will absolute drive exclusive and timed exclusive windows and things. Which I’m all right with. exclusive deals > subscription service > console wars. It’s just more ammo for either box. Which I like, go nuts.

 

I’m not mad Sony is paying games to keep off Gamepass, either. It’s just more hater energy than competitor energy 

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it's obviously not a great thing when people get exclusivity of 3rd party stuff, but I can't get that angry about it with Gamepass and PS+. I think because those services are fairly new and there's plenty of other ways to easily get the game.

 

I don't mean this as a "what about..." but it's probably more felt with tv and film streaming. You know what you want to watch is out there on a platform to watch, but you don't have that so fuck you. At least if you want the game on Xbox you could just do what you would have done and buy the game. By the end of this generation it might be more of an issue

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It is a bit like that. I get why Ryan is out here and fighting hard for this deal not to happen, though. 3 years of CoD is nothing compared to 10 years of CoD. Especially as CoD will get DLC first on Xbox, run better on Xbox and most importantly be effectively free on Xbox. So even if PS gets CoD games for another 3 years, they’ll still be losing a lot of cash. So I get what he’s doing, and he’s doing the right thing.

 

However it must mean there’s very little hope of these 2 ever being on good ground when it comes to CoD for him to be out here calling Spencer a bitch and he’s offer weak. I have to imagine that would end a lot of talks, so they must be done talking about it already.

 

So Ryan is doing the right thing but if I were Spencer I’d be like fine, then have no years of CoD. But I’m taking Minecraft with me as well so nuh 

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I just think for a company that prides itself on it's first party output and quality exclusives whinging about one particular game comes across as particularly petty... as far as I can tell that offer would take them to around 2027, fucking hell if they can't come up with a shooter to fill the void in that time there's something very wrong.

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Dude no one has come up with a shooter to fill the void of CoD since 2007 lol. Fortnite, kinda, but It's just not that easy. I also think this deal between MS and ABK is fair, but PS are going to lose a lot of money so you can't blame him. He's doing his job. 

 

Spencer also started this by talking about the letter he sent to Ryan as well. Ryan is just going - hold the fuck on, let me tell you what that letter said. 

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It's not they can't make a better shooter than CoD, but they can't make something that has that kind of audience. CoD is one of those games like FIFA where it goes beyond what we would think of as a mainstream game. It is a titan in the world of games and it not being on PS is just a ginormous hit. 

 

The problem for PS is even though they probably have the largest CoD audience, they know that audience are CoD fans before PS fans. This is super big and personally I find it fun to watch the drama play out 

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