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Microsoft Activision Merger Takes Leap Forward

The biggest going concern for the Microsoft/Activision merger was the UK’s regulatory body shutting it down. The CMA is all-powerful and didn’t seem overly keen on the deal going through. Some analysts put it finishing at as low as 15%. But that all changed yesterday.

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In a massively rare move, the CMA revised its provisional findings and decided that the console market wasn’t at threat from the merger. In layman’s terms, Microsoft could remove Call of Duty from PlayStation and there would be no risk of foreclosure to Sony’s business. This might be a “yeah, obviously” moment, but it was one of the arguments holding the merger back. And now it’s gone.

So what hurdles do Microsoft and Activision now have to leap? Well, the CMA is still concerned about its place in the cloud market. So if Microsoft can prove the deal won’t hurt other cloud gaming companies, it goes through. And they’ve already been signing deals with companies around the world, including nVidia, to allow for their games on rival cloud companies.

In short? The deal isn’t signed and sealed, but it’s looking closer than it has ever been. The majority of the doubt came from the way in which regulatory bodies across the world were attempting to protect Sony’s market share. This conversation is now over, for the most part.

But Sony’s aggressive reaction to the Microsoft Activision merger may end up having a negative effect on them. And it’s going to make for a really interesting conversation within the industry.

Third-Party Exclusives and the Activision/Microsoft merger

In all of this, there has been a question commonly but quietly asked time and time again. If some games are so important that they can’t be removed from rival platforms, why is Sony’s use of third-party exclusives and content allowed? They’re the market leader, and they can use that power to relatively cheaply remove content from rivals with absolutely no regulation. Want Final Fantasy? Buy PlayStation. Want the biggest games with a little extra content? Buy PlayStation. Want massive third-party games in Game Pass? Probably can’t, because of clauses put in marketing deals and, potentially, first choice of refusal from Sony.

The PlayStation Advantage is part of what made the company what it is. And it got it to the point where it is the default console, and then locked it there, refusing to allow anybody else to compete in the same way.

That may be about to change. As well as that discussion making its way more commonly through fans, it was also brought up in a US senate finance committee. Senator Maria Cantwell called for trade envoys to Japan to speak with their counterparts about why “Japan’s government has allowed Sony to engage in blatant anti-competitive conduct through exclusive deals and payments to game publishers”.

This is on top of the FTC demanding information regarding what exactly those third-party deals are, and how they’re made.

For all their blustering over what damage the Activision merger might do to them, Sony may have overplayed their hand. And there’s now an increased eye on how they use their massive market share to minimise competition.

Naturally, that might not come to anything other than a few previously secret snippets of information. Or it could ultimately cripple the use of third-parties deals, especially by Sony. What a time to be alive.

 

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blank Mat Growcott has been a long-time member of the gaming press. He's written two books and a web series, and doesn't have nearly enough time to play the games he writes about.

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Twitter: @matgrowcott