Microsoft to defend acquisition of Activision Blizzard at UK hearing

News Summary:

  • Many countries have opposed the potential deal since Microsoft announced it on January 18, 2022. Several countries have approved the acquisition of Activision since then, such as Chile, Serbia, Brazil, and India. India and Saudi Arabia, but EU officials remain unconvinced. Last week, Microsoft received a Statement of Objection from the EU, the content of which is not made public. The European Commission is known to be concerned that the deal will have an anti-competitive impact on Sony, particularly on Call of Duty. However, this issue is controversial because Microsoft has suggested that Sony release Call of Duty on PlayStation on the same day as the Xbox release date in the next 10 years.

  • Microsoft will redouble its efforts to secure the planned deal with ActivisionBlizzard on the European stage. Activision’s long process of trying to buy it has come to an end with this brand new development and Microsoft will have to defend its position once again.

The hearing will take place on February 21. Before that date, an EU official will decide whether interested third parties, such as Sony, are invited. Microsoft will then have the opportunity to respond to all concerns the EU has collected in its statement. It’s also possible that Microsoft will once again address the potentially misleading claims of Sony CEO Jim Ryan regarding Call of Duty. Sony classifies the loss of Call of Duty on PlayStation as “irreplaceable”, as statistics have proven that a large chunk of their revenue comes from the FPS franchise. But if Microsoft is willing to work with Sony to mitigate such losses, its opposition may be far weaker to stand.

Initially, when the $69 billion deal was announced, Microsoft stated its intention that by buying Activision it hoped to increase its chances of competing with market leaders Tencent and Sony. Tencent owns shares in a number of international game companies such as Riot Games, Epic Games and Ubisoft. By not participating in these hearings, they felt the deal was far less threatening than Sony’s.

Microsoft made a similar deal with Nintendo for the release of Call of Duty for the next 10 years, and the Japanese company accepted. When it comes to Sony, however, it doesn’t seem like that deal is enough. Therefore, if Sony is invited to the EU hearing, tensions will increase between it and Microsoft.