GET IT ALL – How Sony is trying to derail Microsoft’s takeover of Activision Blizzard

The consolidation of the video game sector brings new life to the battle between the giants of the industry. But that does not prevent the rivalry between Sony and Microsoft from expressing itself.

Due to the lack of electronic components, the expected battle between the latest generation consoles is disappointing. Almost two years after the launch of the PlayStation 5 and Xbox Series X and S at the end of 2020, manufacturers Sony and Microsoft have abandoned their traditional sales war. From now on, it is with blow of redemption that the two rivals clash.

While a consolidation of the video game market is underway, everyone is placing their pawns. However, Microsoft seems to have knocked out the competition with the announcement of the Activision Blizzard takeover on January 18. With this $68.7 billion operation, the Xbox maker could get its hands on iconic video game franchises such as 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 has passed a symbolic but crucial step. On April 28, 98% of Activision Blizzard group shareholders validated the sale to Microsoft. From now on, the marriage has until June 2023 to be ratified. But this will have to go through an agreement from the competition authorities.

• Why is the operation particularly monitored?

If the sale is finalized, Microsoft would become the third largest player in the video game sector, behind Chinese Tencent and Japanese 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 that must be studied.

In the United States, anti-trust laws seek to limit or prevent the monopolies of certain companies in a market. This is why the US Federal Trade Commission (FTC) has been asked to look into 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, the British and European authorities will also have their say.

• Where are the verifications?

The US competition authority has completed its first phase of review. This 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 is due to end in September. On the other hand, the European investigation has not yet started

These decisions could jeopardize Microsoft’s projects in the event of refusal. But conditions can also be implemented in order to approve the sale while 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 largest franchises in the industry, Call of Duty generates the most fear. The shooter license (owned by Activision) is a top seller every year. Above all, it allows Sony to offer privileges on its PlayStation for many years. By purchasing the new annual opus on the Japanese console, players can access content and test versions of the game in advance.

If the license changes ownership, Sony should logically lose its benefits to Microsoft. The American could even favor his own customers: Xbox players.

• Are Sony’s fears legitimate?

The day after the announcement of the acquisition of Activision announced, the community of PlayStation players was already worried about a possible exclusivity of the game, that is to say a marketing only on certain platforms. More recently, the Japanese company considered the series of games to be essential and able to influence the choice of purchasing a console from a gamer. An argument that resonates all the more in the context of a renewal of the gaming machine park linked to the release of the PlayStation 5 and the Xbox Series X and S at the end of 2020.

However, Microsoft quickly wanted to reassure regulators. The Xbox manufacturer 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 financially profitable. Sony’s fears therefore seem to be exaggerated.

These various positions have been reported 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 the acquisition of Activision Blizzard by Microsoft, other countries are interested in the sale. This is notably the case of Brazil and New Zealand, some of whose documents have been made public.

• Have other indiscretions been brought to light by these documents?

During the examination of the Brazilian documents, in particular, it was confirmed the superiority of Sony in terms of the sale of consoles. Discreet about the number of copies of machines sold during the previous generation, Microsoft has formalized its poor commercial performance. The American company has acknowledged 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 range of titles as part of a monthly subscription.

This low marketing blow is part of the new console war which sees the manufacturers fight through the performance of their machine, the exclusive games, but now also with the quality of the services offered.

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