Brazilian regulator approves Microsoft's proposed deal with Activision Blizzard |  VGC

Brazilian regulator approves Microsoft’s proposed deal with Activision Blizzard | VGC

Brazil’s regulator became one of the first to approve Xbox Game Studios (Microsoft) [2,233 articles]” href=””>Proposed acquisition of Activision Blizzard by Microsoft [1,102 articles]” href=””>Activision Blizzard.

On Wednesday, the country’s Administrative Council for Economic Defense (CADE) said it had approved the merger without any restrictions.

“Given the enormous popularity of Call of Duty, it is reasonable to infer that if Activision Blizzard games were no longer available on Sony Interactive Entertainment [2,567 articles]” href=””>Sony Consoles, PlayStation [6,308 articles]” href=””>Playstation users may decide to migrate to Xbox [5,822 articles]” href=””>Xbox, or even a PC [6,329 articles]”href=””>PC, to continue having access to franchise games,” reads CADE’s summary.

“On the other hand, it’s also reasonable to assume that if upcoming Call of Duty games become exclusive to the Microsoft ecosystem, gamers loyal to the PlayStation brand might simply drop out of the series, migrating their demand to other games. available on their favorite console.”

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He continues: “Despite this, it cannot be excluded that Microsoft may find it potentially profitable to adopt an exclusivity strategy on Activision Blizzard games, even if a decision in this direction could result in the sacrifice of a relevant party. sales, users and even the popularity of Call of Duty.

“Indeed, in theory, such a strategy could help boost Xbox sales, expand the Game Pass subscriber base, and strengthen network effects on the Microsoft ecosystem, to offset any lost revenue from the game. selling games in the short term.

CADE’s verdict goes on to state that it believes exclusive content has been “very important” to competition in the console market, and one of the main factors responsible for PlayStation and Nintendo. [3,036 articles]” href=””>Nintendo’s positions as a market leader.

“Exclusive games are a benchmark of competition between Microsoft and SIE, even though no company has so far developed or acquired an exclusive game that has decisively tipped the balance in favor of a console. Indeed , first-party exclusive games are less popular and represent less revenue than third-party AAA games, which until then were available on Xbox and PlayStation.

He concluded: “As already seen, Nintendo does not currently rely on any content from Activision Blizzard to compete in the marketplace. In turn, Sony has several predicates – global leading brand strength for over 20 years, vast experience in the industry, largest user base, largest installed base of consoles, robust catalog of exclusive games, partnerships with several publishers, brand-loyal consumers, etc. – which should help keep PlayStation competitive in a possible post-Op scenario, even in the face of a potential loss of access to Activision Blizzard content.

Brazilian regulator approves Microsoft's proposed deal with Activision Blizzard

“Furthermore, it is important to emphasize that the central objective of CADE’s activities is the protection of competition as a means of promoting the well-being of Brazilian consumers, and not the defense of the particular interests of specific competitors.

“After all, one cannot lose sight of the fact that the holder of the legal heritage protected by Law no. 12,529/2011 is the community, and not the competitor/economic agent as an individual entity.

“In this sense, although it is recognized that some users of PlayStation consoles (from Sony) could decide to migrate to Xbox in the event that Activision Blizzard games – and in particular Call of Duty – become exclusive to the Microsoft ecosystem, SG/Cade does not believe that such a possibility represents, in itself, a risk for competition in the console market as a whole.

The Brazilian regulator was one of the first to publicly share correspondence around the merger, including unprecedented access to Q&As from companies including Sony, Ubisoft [788 articles]” href=””>Ubisoft, Amazon Games [339 articles]” href=””>Amazon and Google [273 articles]” href=””>Google.

The decision follows that of Saudi Arabia’s General Competition Authority, which said in August that it had “no objections” to the proposed takeover of the games industry.

The proposed $68.7 billion acquisition is currently being reviewed by regulators around the world amid antitrust concerns at a time of increasing consolidation in the gaming industry.

According to a report on Wednesday, the US Federal Trade Commission (FTC) could rule on Microsoft’s proposed acquisition of Activision Blizzard by the end of November.

Meanwhile, Britain’s competition regulator announced on Tuesday that it had set March 1, 2023 as the deadline for publishing the findings of its investigation into the deal.

Brazilian regulator approves Microsoft's proposed deal with Activision Blizzard

Notably, the Competition and Markets Authority (CMA) is concerned about the impact the deal could have on PlayStation’s ability to compete, given that the deal would see Microsoft take ownership of the Call of Duty.

Microsoft officially filed its case for its proposed acquisition of Activision Blizzard with the European Commission last Friday.

The European competition watchdog has set November 8 as a provisional deadline to approve the deal or choose to enter a second, more detailed phase of investigation, as the CMA recently chose to do.