The CMA blocked Microsoft’s planned Activision Blizzard deal, saying it would have lasting harm on the industry – but what do you think?
I think the only people more shocked than I was about the Competition and Markets Authority’s bombshell decision to block Microsoft’s takeover of Activision Blizzard was Microsoft itself.
The whole world was waiting for the UK’s decision. It was widely thought that other competition watchdogs would fall in line behind the Brits, and now the CMA’s position is that “Microsoft already enjoys a powerful position” and that the acquisition would lead to “reduced innovation and less choice for UK gamers over years to come”. No one’s entirely sure what will come next. (Well. Apart from an appeal, obviously).
Microsoft’s leadership has been surprisingly vocal – and bitter – about the decision, too. President Brad Smith told the BBC that it was “probably the darkest day in our four decades in Britain” – a bit hyperbolic there, Brad, but you’re angry and emotional, so I understand – and then said something about the EU being a “more attractive place to start a business than the UK” which, while undeniably true, is probably not the way to win friends and favours from influential Brits at the moment. Just sayin’.
Ultimately, though, I don’t suppose many people beyond game makers and journalists care much about the deal; actually, I don’t suppose many people beyond game makers and journalists even knew about it before it hit the headlines earlier this week.
Like pretty much everything else – from the TV show we enjoy to the food on our lap when we watch it – few of us care about how our favourite game or show or album came to be. We probably don’t fully appreciate the complexities of the publishing and distribution process, or how hard (and expensive) it is to push out a patch that addresses that bug that’s driving us spare. Most of us are just happy that the game exists and that we found it. End of.
But just because most of us don’t understand these complexities doesn’t mean they’re not important, though. And you don’t have to know the difference between a developer and a publisher and a distribution team to have been affected by them, either. Microsoft and Sony have been silently vacuuming up companies for years now, absorbing not just fan-favourite studios but a host of integral game support services, too.
Regardless of what you think about Microsoft’s latest acquisition plans, both companies have been trying to tighten their respective grips on the industry, quietly changing not just the goalposts but, at times, the very game itself. And they’re not alone. Take-Two acquired Zynga, Sony bought Destiny and Halo creator Bungie, NetEase bought Quantic Dream, Tencent acquired Sumo Digital, and Embracer Group brought an astonishing array of Square Enix properties, including the Deus Ex and Tomb Raider franchise… and all of those acquisitions happened in 2022 alone.
Both Sony and Microsoft additionally hold a host of fiercely protected IPs – for Microsoft, that’s games like Halo, Gears of War, Minecraft, and Fallout; for Sony, it includes Destiny, The Last of Us, God of War, and Gran Turismo – that may or may not eventually find themselves (or remain) on a competitor’s platform or console.
This stuff matters. It affects not only the availability of your next-favourite game and where you’ll be able to play it, but also how much it’ll cost, and whether you’ll be able to play it for free on launch day.
Even the CMA – which didn’t interject to stop any of the acquisitions and mergers above, of course – thinks that Microsoft’s planned acquisition would have lasting harm on the games industry, even with a 10-year licencing deal that would keep Call of Duty on PlayStation consoles for at least this gen cycle, and probably one or two more, too. That’s because the only people who really lose out when competition dies is us: the consumers.
As long as competition is healthy, so too is the market. We may never have gotten Microsoft’s Xbox Game Pass were it not for Sony’s PlayStation Plus monthly freebies, and without Xbox Game Pass’ arrival, Sony may not have revamped those PlayStation Plus tiers and included additional spoils. None of these things are accidental because healthy competition encourages competitors to advocate and innovate – which ultimately leads to happier consumers who get more bang for their buck.
Microsoft’s Brad Smith reckons that part of the reason the acquisition was blocked was because of the CMA’s “flawed understanding” of the game’s industry and “the way the relevant cloud technology actually works”, and given how often I have to double as a gaming Babel fish for my non-gamer friends, there’s probably some truth to that.
Personally, I’m not inherently for or against Microsoft’s plans; if it remains blocked, it’ll be a relief for COD players on PlayStation; if it goes ahead, I think it’ll make a lot of Xbox Game Pass subscribers extraordinarily happy. Ultimately, I want what’s best for us – gamers of all stripes, on all platforms, who like all kinds of different genres – but I truly believe that some of the greatest consumer-friendly advances we’ve seen lately, such as the strides in accessibility and backwards compatibility, only came about because of that healthy competition… and that’s what I want to see continue to thrive.
Vikki Blake has a column every week here at whynow Gaming. You can read her previous dispatch here.