Rumor: Microsoft Likely to Offer Concessions to EU Soon Over Activision Blizzard Acquisition - News
by William D'Angelo , posted on 28 November 2022 / 3,916 Views
Microsoft is looking likely to offer concessions to the European Commission, the European Union antitrust regulators, some time in the coming weeks over its acquisition of Activision Blizzard as a way to avoid formal objection, according to people familiar with the matter who spoke with Reuters.
One person with direct knowledge says the main concession is that Microsoft will have a 10 year licensing deal with PlayStation maker Sony.
The European Commission has until January to release a statement of objection, which is a formal list of competition concerns. Microsoft offering concessions could help shorten the regulatory process.
"Ultimately, such a move could secure an early clearance with the European Commission and subsequently be used by the parties before other antitrust agencies," said a partner at law firm McDermott Will & Emery Stephane Dionnet.
"However, it remains to be seen whether the active complainants will validate such concessions (in particular in terms of scope) and if behavioural remedies will also be accepted by the CMA and the FTC."
A Microsoft spokesperson stated, "Sony, as the industry leader, says it is worried about Call of Duty, but we've said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less."
Microsoft's acquisition of Activision Blizzard has been approved in Brazil, Saudi Arabia and Serbia unconditionally, reads the report from Reuters. Brazil and Saudi Arabia approvals were already, known, but this is the first mention of it being approved in Serbia.
The European Commission earlier this month announced it has opened up an in-depth investigation into Microsoft's proposed acquisition of Activision Blizzard.
The Commission has expressed concerns the deal if approved might reduced competition in the video game markets of consoles and PCs, as well as for PC operating systems. One of the concerns is that Microsoft might limit access to Activision Blizzard games, including Call of Duty, and might stop these games from releasing on rival video game consoles.
"The Commission is concerned that, by acquiring Activision Blizzard, Microsoft may foreclose access to Activision Blizzard's console and PC video games, especially to high-profile and highly successful games (so-called AAA games) such as Call of Duty," reads the report from the European Commission from earlier this month.
"The preliminary investigation suggests that Microsoft may have the ability, as well as a potential economic incentive, to engage in foreclosure strategies vis-à-vis Microsoft's rival distributors of console video games, such as preventing these companies from distributing Activision Blizzard's console video games on consoles or degrading the terms and conditions for their use of or access to these video games."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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That’s not how things work in the European Union.
My guess is Microsoft will be asked to build 10 temples dedicated to Jupiter Optimus Maximus, repair and renovate the Apennine aqueducts, and finance fourteen feast days in honour of Saturn—god of seed sowing and filial cannibalism. At the end of the celebration, Microsoft will be entitled to a triumphal arch at their expense or a column if that’s their preference—occurs after they ritually sacrifice two white oxen and their prisoners of the conquest/merger on the Capitoline Hill, following a ceremony whereby Microsoft’s leader is made King for a day, as is tradition.
You Americans would know this if you understood that there are other business cultures around the world. I’m sorry if that sounded patronizing, hangover (you see, in Europe we have to drink wine instead of water in Europe on account of the typhoid and cholera in the wells).
What I find funny is this is all about COD. So, that means Diablo, Spyro, Crash, Tony Hawk, Guitar Hero, etc. could go Xbox/PC only and Sony/regulators would not care.
Makes sense though as CoD dwarfs the combined revenue of those other franchieses.
Well its about how COD's money stream is setup and utilises and depends on the COD player bases engagement with the game and the volume of post release money that's generated by them compared to the other games.
Haha, Microsoft main concessions is what they were planning on doing all along. The goal is to have Call of Duty on Game pass and keep the Sony's paying customers. That is why Sony is insisting that this deal can't happen ever.
No Sony is afraid COD will eventually be removed from their ecosystem. That's all they care about. First Microsoft offered a 7 year contract, then a 10 year contract. Notice how they've never offered a lifetime contract even though they claim they have no plans of ever removing it. These are massive corporations. Don't be naïve and think everything they say is the truth. This was the same company that in a few days doubled the price of gold and then came back and decided not to do it. Make no mistake if either Sony or MS gets to big that will not hesitate to screw over the consumer. Both companies have proven this time and time again and yet you still have people acting like these companies are their best friends.
You are 100% right in what your saying; Sony is afraid Microsoft would do exactly what they would do their competition and screw consumers like Sony as in the past. Making everything exclusive to their eco system and abusing their position as market leader.
Microsoft only have obligation to their own customers and regulatory bodies; It's absurd that anyone would even suggest a lifetime contract.
It's naive to think that Microsoft would make any purchase without considering would it be best for them to make it exclusive. It's just the current double standard in the industry that it's only ok for Sony to make thing exclusives but Microsoft should keep everything multiplat.
Exactly that's my whole point. MS wants to play this game acting like they wont just turn around and change their minds the minute this contract ends. Which I fully expect them to do and would 100% understand if they did. I just wish people would quite pretending that it's not going to happen and that MS is on the up and up here.
Well this doesn't actually reflect reality. Even when MS bought Bethesda Sony's mouth remained tight lipped. MS has always been allowed to have exclusives, there has never been a double standard.
But the more multiplatform content MS bought from under Sony the more concerned they were. MS eventually buying several of biggest multiplatform franchises on Playstation triggered this which is tbh unprecedented. To date the only established multiplatform franchise entries Sony has purchased has been SFV which Capcom needed investment for because of their dire circumstances and FF, which had never had a major audience on Xbox and barely cracked 1m in the last big entries. COD however is the biggest annual release on Playstation.
And publically stated that Bungie will remain independent and all games will be MP "forever", and after the deal closed no changes.
Yeah, I agree. I'm just saying, they have purchased a major multiplat IP. Destiny is one of the biggest games in existence right now.
I think you could also use that as an example of why Microsoft would likely keep Call of Duty multi-platform. Call of Duty is a substantially larger IP than Destiny. But, the economics of Destiny clearly show that it needs to be kept on all platforms. Presumably, the same economic factors make it even more important for Call of Duty to stay on all platforms.
They are doing it with Elder Scrolls and Starfield aren't they? While before the deal was closed they were saying they wouldn't take away content from other platforms.
For the CoD it started with we don't have intention of removing it from other platforms, them we had they are on it more to expand to mobile content (so will the other IPs be MP as well?), then offered Sony a 3 year deal (that Sony refused so MS gone public to expose it and Sony countered), increased to 5 and now 10 if I'm not wrong.
MS never outright said that as long as ABK exist they will make all games MP, or that as long as CoD exist they will make it MP, they didn't commit they just said it wouldn't make sense to make it exclusive (which can be changed at will) and that have been the core of the complains I have seem.
Show me a major multiplat that has gone exclusive to playstation
Permanently? None as far as I know.
No Sony is afraid that Xbox competitiveness rise to that of PlayStation. First no company will offer a lifetime licensing contract but even then Sony is fully aware that Xbox don't shy away from releasing games on competition's platform when it makes sense for the franchise and you only have to look at Minecraft to have a representative example of how they would treat the CoD franchise. So here Sony isn't afraid of losing CoD, they're afraid of having real competition that would reduce their margin profit or hinder their ability to increase such whenever they like they recently did. CoD is just the tool they are using to try to delay/prevent this scenario from happening.
I admit I'm very confused by the minecraft move but I just don't believe MS here. I think they will take it away and it just makes sense to do that.
Yes losing COD is related to them having real competition and reducing their profit margins so yes they are afraid of losing COD. Both issues are all one in the same.
With Minecraft, MS rightly believed it was more than the 2-2.5B franchise they paid for but to achieve it's true potential exclusivity would only be a barrier.
CoD is a well established Multi Billion $ worth franchise and there's simply no way for MS to maintain this value with exclusivity let alone expand on it therefore the same reasoning that made Minecraft multiplat apply here as well.
The only thing that Sony might be afraid regarding CoD is that it ends up on GamePass while skipping PlayStation subscriptions but they know full well the game will still release on PlayStation as long as PlayStation is relevant in the market.
I honestly don't think the gamepass issue bothers them at all when it comes to COD. No one is switching from Playstation to Xbox to save $70. It takes more then that to get people to move to a new system and losing all the games you paid for.
Hell even people on PC do not want to leave Steam and were talking about just another program not even a new console. COD sales doubled on PC when they moved to Steam.
I get what everyone is saying about MS not being able to make up the money and I agree. The thing is MS has the money to invest to do just that. It would be a waste IMO for MS not to do it. You have the #1 selling franchise of like the past 5 years and an opportunity to make it exclusive to your own ecosystem and you don't do it? That would be a horrible move by MS. They will lose money up front yes but what they will gain over the years as people are forced to switch can't be measured.
They don't care about converting PlayStation, they care about their offering to attract anyone. Having CoD on Gampass would go a long way toward that goal.
"Hell even people on PC do not want to leave Steam"
Why would people need to leave steam, I have an account on about every serious pc store and still subscribe to GP ultimate.
"COD sales doubled on PC when they moved to Steam." That's why MS release all of their game on steam and will still release CoD there for sure.
I get your opinion on Cod And MS but I don't share it And Minecraft still is the best factual example we have right now on how MS treat franchises of CoD level of populartity.
They wont remove CoD from PS. The new release made $800m in 3 days across all platforms. Thats the type of money they want to make.
Yes but that's short term thinking IMO. MS is all about long term thinking. Sure they will lose some money up front by removing it from playstation but how much will they end up gaining in users if they do that? Will it make up for the 800 million eventually if those people also sign up for GP? COD sales already doubled on PC just by placing it on Steam. I think it would be foolish for MS not to remove COD from PS. MS would force so many people to either move to PC and or Xbox.
You may be right, but I bet it won't be like that. After all of Microsoft's promises, there'd be significant backlash if they unnecessarily removed Call of Duty from PS. And it brings in so much revenue on PS, that I can see them truly preferring to follow the Minecraft model when it comes to Call of Duty.
The long term is offering the better deal on GP which will slowly immigrate users over. However in the meantime they will rake in the dollars by offering CoD on all systems.
Also Xbox doesn't need CoD exclusive. Remember they own Bethesda and Halo. They have a ton of FPS games that alone dominate the industry.
Sony needs the Playstation to be successful, The Xbox is a minor side project for Microsoft.
if MS treated Xbox like a minor side project it would have been shelved years ago. Sony also found success in many other business ventures. PlayStation being a larger part of Sony than Xbox of MS means absolutely nothing.
There has been several rumours over the years of board members and investors wanting MS to sell or stop doing Xbox because at certain times it wasn't making money or cost effective. Their purchases of other publisher isn't really a risk as those are usually already profitable companies. However Xbox itself has been a money sink many times over it's history.
Exactly this is another proof Xbox never was treated as a side project or else those voice would have been acted upon.
But anyway with a large enough investor pool you will find some that share about any view. I'm sure you can find Sony investor wanting to spin about any of their division. I don't consider any of this seriously.
But Xbox competitive matched Playstation with the 360? Why suddenly now, MS can only compete with a 70billion acquisition of the biggest multiplatform publisher in the industry?
Were really letting Microsoft get away with being lazy. Playstation 3/4 recovered through Sony investing heavily in original quality first party output. Original titles that wouldn't exist without playstation. Microsoft fumbled horribly with the Xbox One, they should recover the same as Sony did instead of just buying multiplatform IPs like all of Duty & Elder Scrolls.
"But Xbox competitive matched PlayStation with the 360?"
you realize you compare Xbox at it's peak to PlayStation at it's worst right?
- Sony terrible early Ps3 pricing strategy. turns out contrary to Sony' own belief people were not ready to take a second jobs to continue with PlayStation.
- Ps3 was horrendously difficult to develop for and it resulted in it having the sub par ports for the first half of the gen.
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Xbox made heavy use of hating timed exclusive (Bioshock, Mass effect, tales of Vesperia, GTA 4 DLC ...)
If you advocate for MS to use the same strategy now guess what I am all for it.
"Why suddenly now, MS can only compete with a 70billion acquisition of the biggest multiplatform publisher in the industry?"
Because the reality of today and not that of 15 years ago is that Xbox is nowhere near Sony level of competitiveness and it also want to boost GamePass success way higher than the sub 30M it is right now.
"Were really letting Microsoft get away with being lazy."
Yeah that's why Don Mattrick is still the CEO and MS Still heavily focus on Kinect shovel ware. Seems to me we didn't let MS being lazy and that's why it is where it is today.
"PlayStation 3/4 recovered through Sony investing heavily in original quality first party output. "
And Xbox Series and successor have a shot at recovering due to MS investing heavily in original quality first party output.
"Original titles that wouldn't exist without PlayStation." There's plenty of Titles that would also not exist without Xbox and plenty of new IP being created right now under MS leadership.
Why would MS offer a lifetime contract, especially when they haven't had to make any concessions yet? Minecraft doesn't have a contract in place, yet MS still keeps the franchise multiplat. Sony doesn't want the deal to go through because Xbox will automatically become the more appealing platform to play CoD on and Sony doesn't want that. It's all about the $$ for both companies. As we have seen, both companies will make exaggerated claims to get what they desire.
"Coming up, exclusively on Xbox, 'Duty Calls' the new game from the makers of Call of Duty. Featuring everything you like from CoD but legally a distinct game."
Meet the new concessions, same as the old concessions
I don't care about Sony. I want concessions that Microsoft will release native Linux versions of old and future WarCraft/StarCraft and Tony Hawk games for all eternity.
