Microsoft (NASDAQ:MSFT)
Microsoft (NASDAQ:MSFT) is currently trying to get approval from all of the competition regulators in the countries where Activision Blizzard (ATVI) and Microsoft operate. This comes when the Competition and Markets Authority (CMA) in the United Kingdom has expressed some concerns.
Before the $68.7 billion takeover transaction could be finalized, the watchdog had begun an initial investigation in July to determine whether the deal would further weaken competition in the United Kingdom.
During Phase 2, an independent panel will study the Company (NASDAQ:MSFT) deal in further detail to evaluate whether or not the company’s ability to exert control over video games such as Call of Duty, World of Warcraft and Candy Crush will be detrimental to its rivals.
Microsoft’s Goals
Microsoft has big goals for gaming that go beyond simply Xbox platforms, and as part of those plans, the company expects to take a principled approach to how it handles Xbox Game Pass and Call of Duty. Xbox Game Pass will have access to Call of Duty, Overwatch, and Diablo, but Microsoft will not restrict games like Call of Duty from being made accessible on PlayStation.
While the United States Federal Trade Commission (FTC) continues its investigation of the merger behind closed doors, other regulatory agencies worldwide, such as Brazil and New Zealand, published records for the general public.
Microsoft (NASDAQ:MSFT) claims in the documents submitted to Brazil’s Administrative Council for Economic Defense that a strategy of not releasing Activision Blizzard games on competing consoles would only be profitable if the games could draw a significant number of players over to the Xbox ecosystem. This would result in revenues that would make up for losses incurred due to not releasing these titles on competing consoles.
This argument directly answers the concerns of the CMA and will likely be reaffirmed by the Company (NASDAQ:MSFT) before an upcoming counter-proposal deadline on September 8th, 2022, set by the CMA. The CMA has asserted that a formal in-depth examination will commence if an acceptable proposal is not presented. This would involve an impartial commission investigating the transaction and analyzing the effects of lowered market competition levels.
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Author Shariq Khan 