Friday, 02 June 2023 10:00

Microsoft’s Xbox and Activision Both Considering Pulling Games out of the UK to get around CMA Block

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Remember how the EU regulators said the Microsoft Activision deal was pro competition and pro-consumer? Well, I wonder what they might be thinking now as news is dropping saying that both Microsoft and Activision are considering pulling games out of the UK in order to push the buyout through. The deal all on its own is far from pro-competition and standing on licensing agreements that affect 1% of the market defied logic, but now we see the lengths that Microsoft is willing to go to in order to get their way.

The news comes in the form of a twitter post (not 100% reliable) that seems to indicate that one of the courses of action under consideration by Activision is the removal of all games from the UK. This would remove them from the UK’s jurisdiction and any enforcement of the block in place. This would impact millions of consumers in a very negative way. It would mean that access to any Activision/Blizzard titles via first party sources would be gone. (Now the push for allowing 3rd party purchases against Sony makes more sense). Another option is to just close the deal in defiance of the block and deal with the legal consequences in court.

Some seem to think that Microsoft is an unstoppable force that will get through the rulings no matter what. This view is a bit optimistic as many regulators are becoming more concerned about large tech companies controlling different markets. The US FTC still has an objection based on general competition fears and the UK has not often overturned blocks on mergers. For Activision, and by extension, Microsoft to pull games from an entire country or region might not have the pro-competition spin that they have been trying to put on this deal.

The other concern that might work against Microsoft and Activision at this stage is that this type of consideration shows a lack of concern for the market. Either ignoring the CMA’s block or pulling games from the UK show that neither company really cares about consumer impact or real competition. These rumors and leaks could be an indication to the courts that this is indeed a bad deal for competition and push the US and UK into a full-on ban of the acquisition. Does this mean that both the US and UK will be starved of gaming content from Microsoft and Activision Blizzard just so Microsoft can get its way? I mean, sure RedFall was a disaster, but that does not mean anyone wants all games to from either company to go away. We just do not want a company with a track record of abusing their dominant position to be in control of the gaming market. I suspect that regulators in the US and UK do not want that either.

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