Hi, this is Wayne again with a topic “What’s next for Microsoft’s giant Activision Blizzard $68.7 billion deal?”.
Microsoft’S 69 billion dollar plan to acquire Activision Blizzard has turned into one of the hottest legal Battlegrounds in gaming. History. Microsoft is fighting with Regulators across the U.S in Europe and in the UK trying to convince them that this deal is good for gamers. Meanwhile, competitor Sony has warned of dire consequences and, in a surprise decision, the UK’s competition and markets Authority warned last week that the deal could be too great a threat to competition. So why are Regulators worried what happens next and will this ultimately change? How you play your games, this is your status update, Microsoft and Sony have spent the past few years on an almost unprecedented shopping spree back in 2017, Microsoft had less than 10 first party Xbox game studios.
Now it’s up to 23 and Sony’s, not even that far behind with about 20 in-house game studios for PlayStation. Now, if Microsoft manages to get this Activision Blizzard deal over the line, it’s going to have more than 30 game studios in total, there have been some absolutely huge gaming deals across the industry and they could reshape how games are made and where they’re played and recent Headlines have focused on one Series in particular Call of Duty. It is one of the most played titles across both Xbox and PlayStation, and that’s got Sony worried. It has emerged as one of the main opponents to the Activision deal, arguing to Regulators, that Microsoft might use its Newfound powers to neglect or even intentionally sabotage, the Call of Duty experience on PlayStation or remove the game from stores entirely now. Microsoft has offered up 10-year Call of Duty licensing deals to Sony, Nvidia, Nintendo and many others, but they all rely on the Activision deal being approved by regulators and Sony has so far refused to sign a deal instead. Taking its concerns directly to regulators and filing extensive arguments with the CMA, meanwhile, Microsoft has gone on the offensive with digital and newspaper ads, aimed at UK regulators and the company’s even been waving around paper envelopes in Europe. Trying to make sure everyone is aware that Sony doesn’t want to sign a deal. I walk around with an envelope that contains the definitive agreement that we sent to Sony.
This fight sometimes has, quite frankly, gotten ridiculous. There’S Microsoft on one side, arguing that Call of Duty: isn’t that important and you know we’re spending 69 billion dollars. But hey, don’t worry about Call of Duty, whereas Sony saying it’s Irreplaceable and it could seriously damage their PlayStation business.
If Microsoft were to take it away and make Call of Duty and XBox exclusive Sony, even told UK Regulators recently, they was worried about Microsoft, sabotaging its ability to win digital Foundry comparisons, the be all and end-all of video game. Reviews that focus on the quality and performance of games, Microsoft would probably face a serious backlash and financial consequences if it was to do that, but you could see why Sony might be nervous here. There’S real potential for Microsoft’s just to not support unique PlayStation features on a future version of Call of Duty or to even remove or block those marketing deals. That Sony relies on to offer up exclusive Call of Duty content to its PlayStation players and, while Microsoft’s offering up all these 10-year licensee deals, it has no qualms about locking up some of the other games it’s acquired after purchasing Bethesda. It’S turned the highly anticipated sci-fi Adventure game Starfield into an Xbox and PC exclusive, and also according to one person working on the co-op vampire shooter redfall.
The team ditched plans for a PS5 version of the game, because Microsoft said it wasn’t interested. The deal would also give Microsoft a foot in the door for mobile gaming, Activision publishes the popular Call of Duty, mobile game, and it also owns King makers of Candy, Crush Farm Heroes and much more. Microsoft. Barely has a mobile presence right now, but it’s betting on a future where it can build an Xbox mobile game store to take on Apple and Google, but this still isn’t just about access to popular games, and neither are Regulators, fears about it, Microsoft, Sony and other Game companies see subscriptions as a big part of the future of gaming and just like how Apple, Netflix and Disney are all fighting over the best TV shows and movies.
Microsoft wants the hottest games on Xbox game pass and as game platforms, look more and more like streaming services. Their owners are adding these game streaming options to their subscriptions. Now, during the pandemic, we saw digital game sales overtake physical ones and services like Xbox game pass with you know, the added option of streaming games from the cloud are increasingly proven popular in what might be a subscription-based future Microsoft, Sony, Nvidia, Amazon and even big game Publishers like EA and Ubisoft are taking bets on this in various ways, but apparently so are regulators and in the UK that turned out pretty badly for Microsoft. The CMA estimates that Microsoft has around 60 to 70 percent of the global cloud gaming market and the regulator made it pretty clear early on that there’s some concerns around Microsoft, buying up Activision Blizzard and then withholding those games from rival cloud gaming Services. There’S obviously fears that Microsoft may go on to dominate the future of cloud gaming and how Activision Blizzard could possibly help it. Do that Microsoft attempted to address these concerns in a series of deals with small and large cloud gaming competitors that provided access to Xbox PC games now for a while, it looked like the CMA might be convinced, but then, in late April the regulator abruptly rejected the Acquisition saying that cloud gaming was the big concern.
It’S a surprise ruling from the CMA, especially after the regulator, backed down over Call of Duty concerns on the console side. But the CMA is clearly worried about the future of cloud gaming. Even if consumers are showing little to no interest in it and the experience hasn’t really lived up to the hype, Microsoft says it will now appeal this decision and it could mean the case drags on for months and months, but Microsoft is absolutely Furious here with President Brad Smith calling the decision The Darkest Day of Microsoft’s four Decades of operating in the UK. He even went as far as saying that the EU looks like a better place to start a business than the UK. That’S a particularly Forney statement, given the political back and forth around brexit right now. So what happens next Microsoft’s Cloud deals clearly didn’t do enough to convince the UK and that could be a giant Blocker in this giant deal. The appeals process is costly time consuming and it’s not even guaranteed to produce the result that Microsoft once EU Regulators are now due to make a decision on a deal. In May, Reuters reported recently that the EU Regulators are actually likely to approve the deal thanks to Microsoft’s various deals with Nintendo Nvidia and others.
The EU just decision is even more crucial for Microsoft. After UK Regulators block the deal, so all eyes are now firmly on Brussels. Microsoft could face more scrutiny closer to home too. The ftc’s suit to try and block the deal late last year with the U.S regulator, saying it wants to try and stop Microsoft from Gaining control over Activision.
The FTC case is still at the document Discovery stage, with an evidentiary hearing scheduled for August, 2nd, Microsoft and Sony. Lawyers are currently at the point of arguing over what documents should be presented in the case and we’re months away from knowing exactly how this all pans out. Microsoft has always maintained that this deal will close by the end of its fiscal 2023 year, which is the end of June.
Now. That deadline seems increasingly unrealistic right now, thanks to the cma’s intervention and then the possibility that Microsoft could end up in court against the FDC fighting for it not to break up this giant deal. If Microsoft still fails to get approval from EU Regulators, then it will almost certainly look like game over with Microsoft, owing Activision three billion dollars in breakup fees, the biggest gaming deal in history hangs in the balance right now, but if Microsoft’s recent fighting talk is anything To go by, it’s really ready to battle to keep this deal alive.
So that’s where Microsoft is out with the Activision deal, it’s appealing the cma’s decision and we’ll see how that turns out down the line, keep an eye on the verge.com for all the updates to this story and much more .