At the moment, agencies from around the world are busy digging deep into and examining Microsoft’s acquisition of Activision Blizzard. The massive video game merger will require a lot of approvals before it pushes through.
Microsoft’s $68.7 billion deal to acquire Activision Blizzard passed another hurdle earlier this week. The Brazilian Administrative Council for Economic Defense (CADE) has approved the merger with no restrictions.
Here's what CADE mentions in its decision:
It is reasonable to infer that if Activision Blizzard games were no longer available on Sony consoles, PlayStation users could decide to migrate to Xbox, or even a PC, to continue having access to franchise games.
The regulatory body argues if Microsoft decides to make Call of Duty an exclusive title, the players who are loyal to the PlayStation brand can opt to play other titles available on their chosen console. It also mentions that while the move to make titles exclusive could be a profitable strategy for Microsoft, the company will also risk sacrificing a chunk of its sales and popularity.
The resolution also states that exclusive content is very important for competition and this strategy has been employed by both Sony and Nintendo. The regulatory body notes that the strategy has been a key factor in Sony and Nintendo’s position as market leaders, saying:
Exclusive games are a benchmark of competition between Microsoft and SIE, although no company has so far developed or acquired an exclusive game that has decisively shifted the balance in favor of a console. This is because proprietary exclusive games are less popular and represent less revenue than third-party AAA games, which, until then, are available on Xbox and PlayStation.
As already seen, Nintendo does not currently rely on any content from Activision Blizzard to compete in the market. In turn, Sony has several predicates – strength of the world’s leading brand for more than 20 years, extensive experience in the sector, largest user base, largest installed base of consoles, robust catalog of exclusive games, partnerships with multiple publishers, brand loyal consumers, etc. – which should contribute to maintaining the competitiveness of PlayStation in a possible post-Operation scenario, even in the face of possible loss of access to Activision Blizzard content.
The verdict also mentions that CADE’s mandate is to protect the interest of consumers in Brazil and "not the defense of the particular interests of specific competitors." The entire resolution can be read from the CADE website. The document is written in Portuguese but can be translated using Google Translate.
Brazil's CADE is the second regulatory agency that has approved the merger. Saudi Arabia’s General Authority for Competition gave a no-objection certification in August.
The next hurdle for Microsoft are the U.K. Competition and Markets Authority (CMA) and European Commission. The European Commission has until November 8, 2022, to approve the deal or decide to conduct a more in-depth investigation. The CMA has set a deadline of March 1, 2023, to publish its findings on the deal.