As Microsoft continues to work towards acquiring Activision Blizzard, regulators from around the world are weighing in. Though a final ruling is not likely to be reached before November, regulating bodies in some countries, such as Brazil, have already given their blessing. Meanwhile, the European Commission is still deliberating. A leaked survey was seen by Reauters, who has since reported that the EU is asking companies in the gaming industry to fill out a questionnaire regarding the Microsoft acquisition of Activision Blizzard.
Because this is the biggest acquisition deal in gaming history, with the proposed cost of $68.7 billion, the deal will have to be approved, rejected, or approved with conditions with the main governing bodies being the US Foreign Trade Commission (FTC), the UK Competition and Markets Authority (CMA), and the European Commission. The FTC and CMA have already completed their Phase 1 investigations and are in the more detailed Phase 2, but the European Commission is still deliberating in Phase 1.
If you aren’t familiar with the process of antitrust regulations, it’s helpful to know what we mean by Phase 1 and Phase 2. Whenever a company buys another company and there is question of how much that merger will harm competition in that industry, antitrust regulators typically do a Phase 1 survey. They ask the companies in the industry that would be impacted by the acquisition. If the results of the Phase 1 are a clear indication that a deal will not harm industry competition, then no further phases are needed. Phase 2 happens when there is some question about it, so the regulating bodies initiate a more detailed analysis of the acquisition’s potential impact on the industry.
This means that the EU’s survey of about 100 questions is just standard procedure. They have entered Phase 1, and they expect to have their own preliminary results by November 8, 2022. Let it be clear that their upcoming decision is basically whether or not they should move into a Phase 2. Game developers, publishers, and distributors that have received this survey have until October 10 to reply.
The main question regulators are attempting to answer is whether or not Microsoft’s acquisition of Activision Blizzard would be an unfair advantage in the industry. Microsoft is Xbox, and Activision Blizzard owns some of the most popular games in the world, including Call of Duty. The enormously popular game sold $3 billion worth or products related in the franchise to 200 million people just in 2020. Though Microsoft has repeatedly said that they would not make Call of Duty exclusive, they could change their mind at any time when they own Activision. A fact that PlayStation’s CEO, Jim Ryan, is being vocal.
We won’t know the results anytime soon, but if the regulators decide to allow the deal, it would be historic precedent for Big Tech acquisitions, specifically in gaming. It’s a big deal now because it has the potential to drastically affect the video game industry.