Microsoft Corp. made it clear on Tuesday that there will be no US$69 billion deal to buy game developer, Activision Blizzard Inc. unless it comes with the blockbuster title Call of Duty.
Less than two weeks ago, Britain’s antitrust watchdog suggested that Microsoft may need to divest Call of Duty — one of the most lucrative game franchises in the world — to alleviate concerns about its Activision Blizzard takeover being harmful for gaming market competition.
Microsoft president Brad Smith told reporters after a closed-door hearing in Brussels with European Union regulators that it isn’t “feasible or realistic to think that one game or one slice of this company can be carved out and separated from the rest” as part of the acquisition.
Pressed on the matter, Smith said he believes the Competition and Markets Authority (CMA) will need to make a decision.
“Do you want to kill a deal and cement Sony’s position in its 80 percent share in the EU, or say 70 percent share globally, in a market where it’s been a super dominant company for 20 years?
“Or do you want to let the future go forward with behavioral guardrails and remedies, and bring this title to 150 million more people? I think that’s the fundamental choice that most regulators are going to need to address around the world.”
Smith’s figures are in reference to Microsoft’s insistence that Sony’s PlayStation console has a much larger market share than its own Xbox.
Opponents of the Microsoft / Activision Blizzard merger, including Sony, worry that Microsoft could make titles like Call of Duty exclusive to the Xbox and effectively thwart competition. A survey conducted by the CMA found that 24 percent of PlayStation CoD players would switch consoles if the franchise became an Xbox exclusive.
Microsoft is not sitting by idly. Already this week, Microsoft struck a 10-year agreement with Nintendo to bring Xbox games to Nintendo platforms. A separate deal with Nvidia, meanwhile, would allow GeForce Now players to stream Xbox PC games.
Microsoft announced its intent to acquire Activision Blizzard in 2022, with the goal of closing the deal in June 2023.
Back in December, the Federal Trade Commision filed a complaint to block Microsoft’s $69 billion acquisition amid fears that Microsoft would harm competition by worsening the experience of Activision’s games on rival platforms, changing their prices, or withdrawing them altogether.
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