Activision Blizzard CEO Bobby Kotick recently went on TV to says the UK will become “Death Valley” if it doesn’t approve his company sold 69 billion dollars to Microsoft. Now we know why. The country’s competition and markets authority released interim findings on Wednesday that the deal would threaten competition in the gaming market and even suggested that for the merger to be approved , Activision Blizzard will need to sell out Call missions part of his business first.
“Xbox and PlayStation are currently in close competition with each other, and access to the most important content, like CoD, is an important part of that competition,” the CMA wrote. in a press release. “Reducing competition between Microsoft and Sony could result in all gamers seeing higher prices, reduced range, lower quality, and worse service in consoles over time.”
Regulators have tried specifically to look at what the acquisition might mean for the console and cloud markets. In both cases, the CMA said its investigation found that Microsoft’s creation of the Activision Blizzard games would be “commercially beneficial.” exclusive to its platformsor at least “materially worse” than its competitors.
Microsoft has repeatedly said that it will not change the status of call of duty on PlayStation after the sale, going further than suggesting a contract 10 year contract to be effective. That agreement will report also includes the option for Sony to set call of duty on its own subscription service, PS Plus. But the CMA is not very excited about these possibilities, which will require “monitoring and enforcement”. Instead of, it proposes “structural remedies” to root out potentially anticompetitive mergers.
Those remedies, as presented in today’s report, include four great possibilities:
Divestment of business related to call of duty
Divestment from Activision Blizzard, Inc.’s Activision segment.
Divestment from Activision segment and Blizzard segment
Divestment is a fancy word for a sell-off, and the CMA basically says their current priority is that Microsoft buys only a portion of Activision Blizzard and not the entire publisher, like crushed candy part, or World of Warcraft partly, but definitely not call of duty part.
Activision Blizzard spokesman Joseph Christinat said: “These are provisional findings, meaning that the CMA puts its concerns in writing and both parties have an opportunity to respond. Kotaku in a statement. “We hope between now and April we will be able to help the CMA better understand our industry to ensure they can achieve their stated mission of fostering an environment where people can trust think they’re getting great options and fair trade, where competitive, fair-trade business can innovate and grow, and where the UK economy as a whole can efficient and sustainable development.”
The major merger is also facing close scrutiny in the European Union, as well as antitrust lawsuit by the Federal Trade Commission in the US In any event, panel exclusivity seems to be the main concern of regulators. One of the most anticipated blockbusters of the year didn’t help, star schoolIt was originally a cross-platform game before Microsoft bought Bethesda and turned it into a game Exclusive Xbox Series X/S console.
In addition to the promises of Microsoft will not take call of duty aside from the PlayStation 5, it was also argued that it wouldn’t make financial sense. But the CMA’s analysis came to a different conclusion:
We find for the moment that the calculation itself is generally profit-neutral. The other model looks at data used by Xbox in the normal course of business for the ‘lifetime value’ of new customers. This is beneficial for capturing 5 years of spending on Xbox platforms and on CoD. This model, which we now believe is a better way to estimate long-term financial incentives, suggests that creating an Xbox-exclusive CoD would be profitable for Microsoft.
It added that in a survey of players, 24% said they would leave PlayStation if call of duty was no longer on it.
For now, CMA will continue to attract consumers respond within the next month, and Microsoft and Activision Blizzard have until March 1 to file a rebuttal. The final report will be out on April 26. It is possible that companies will find some other remedy to satisfy regulators or they may threaten to withdraw from the UK market altogether. Great Britain.
Microsoft and Activision Blizzard have previously told investors that the deal will close at the end of June 2023. “As we continue to prepare for the close of the agreement, you will begin to see notices or requests. Request information from your colleagues in the integrated planning team. ” Kotick told staff in an email today. “This is all part of the normal integration process to prepare for business continuity on the first day after the deal closes.”