The future of Microsoft’s purchase of Activision Blizzard – 5/3/2023 – Tech

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The purchase of Activision Blizzard by Microsoft for US$ 69 billion (R$ 349.1 billion), considered the biggest deal in the history of the games industry, suffered a blow last Wednesday (26), when the CMA (Authority of Competition and Markets) of the United Kingdom decided to block the acquisition.

I explain with questions and answers what happened and what can happen:

Why was the deal blocked? The CMA considered that the purchase of Activision Blizzard would give Microsoft an unfair advantage in the still incipient market of “cloud gaming”, which allows players to access premium titles directly from an internet server, without the need for powerful equipment or a console.

In a report released last Wednesday, the agency claims that the American company dominates this market and, with the acquisition, would further expand its commercial advantage with the exclusive offer of games such as “Call of Duty”, “Overwatch” and “World of Warcraft” in the cloud, “reducing the possibility of innovation and market options in the UK”.

Has Microsoft taken any steps to try to remedy this situation? Yes. In recent months, the company has announced a series of agreements with companies operating in the “cloud gaming” market, such as Nvidia, Boosteroid and Nware. It was agreed that Activision Blizzard games will have space on these platforms for a period of ten years.

Still, the CMA considered that the measures were not sufficient to remedy its concerns. Among other reasons, the agency argued that they do not cover services that include direct access to games (as is the case with Microsoft’s Xbox Game Pass) and that use an operating system other than Windows.

What was the reaction of the companies involved? Not good. Microsoft chairman Brad Smith said during an interview with the BBC that the CMA’s decision is “bad for Britain” and discourages innovation and investment in the UK.

“I have to say, this decision is probably the darkest day in our four decades in the UK,” he said.

Activision Blizzard, according to The Guardian, said through a spokesperson that “The report’s findings do a disservice to UK citizens, who face increasingly bleak economic prospects. We will reassess our plans for growth. Innovators Globals, big and small, will realize that -despite all the rhetoric- the UK is clearly closed for business.”

Can the block be reversed? Yes, but it won’t be easy. Microsoft and Activision Blizzard have said they will appeal to the UK competition body’s court of appeal. Experts heard by the GamesIndustry.biz website claim that it is unlikely that the lower court’s decision will be reviewed, unless a procedural error by the body is identified. Furthermore, the process can take months, dragging the case into next year.

Other countries were also against the acquisition? Competition regulators in countries including Brazil, Japan, Saudi Arabia, Ukraine, Serbia, South Africa and Chile have approved the deal, but it still faces resistance in some of the world’s key markets.

As in the United Kingdom, in the US the FTC (commission regulating competition in the country) showed concern about the deal and decided to go to court to try to block it. According to the agency, the acquisition would harm competition in the market for high-performance consoles and game subscription services. The next hearing on the case is scheduled for early August.

The European regulatory body is due to give its opinion on May 22. According to the Reuters news agency, the acquisition must be approved.

Can the deal be cancelled? Statements by the executives of both companies and the willingness they have been showing to go ahead with the acquisition lead one to believe that giving up the deal is unlikely. However, the next definitions on the case, especially in the US and the European Union, may change this scenario.

If the acquisition is approved in the rest of the world, Microsoft could seek new agreements in the United Kingdom to convince the CMA to clear the deal. Another solution would be to make concessions, such as block Activision Blizzard games on its cloud gaming platform in the country or dispose of part of the company’s assets.

If more obstacles appear, Microsoft may come to the conclusion that it is more worthwhile to give up the deal and look for another publisher available on the market to achieve its objectives with the purchase.

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game tip, new or old, for you to test

Less than two weeks away from the launch of “The Legend of Zelda: Tears of the Kingdom”, this is a good time to know (or remember) the title that gave rise to Nintendo’s main release for this year. The new game of the hero Link is a sequel to “Breath of the Wild”, which was responsible for reinventing the series as an open world game. Considered by many as one of the best games in history, it cannot go unnoticed by any fan of adventure games.

update

news, launches, business and what matters most

• Sega employees in North America formed a union of 144 workers, The Verge reported. According to the publication, this could become the largest union organization in the US game industry by involving workers from different areas, such as QA (quality control), localization, live service, marketing and product development.

• An educational “Minecraft” map was created by the NGOs Amazone-se, Centro de Trabalho Indigenista and Survival International to raise awareness among children about the harms of mining in the Amazon. The map of the “Non-Minable Land” project reproduces an indigenous land and does not allow players to damage the soil, subverting the game’s logic.

• Gamescom, Europe’s leading gaming conference, announced that the Nintendo will once again be present at its exhibition after four years. The change in behavior led analysts to raise the hypothesis that the Japanese company may take advantage of the occasion to make a big announcement.

• Ubisoft, which had been betting on its own website for selling games, should make four more games available on Steam in the coming months. The publisher’s page on the platform lists the releases of “Far Cry 6” for May 11, in addition to “Riders Republic”, “Tom Clancy’s Rainbow Six Extraction” and “Monopoly Madness” for June.

• FromSoftware, creators of the “Dark Souls” and “Elden Ring” series, have announced the release date of their next game. “Armored Core 6: Fires of Rubicon”, a new game in its mecha battle franchise, is due to hit stores on August 25th.

• Heineken has launched a curious matchmaking platform for adults. On the Beer Matchmaking website, players can choose the day, time, platform and preferred level to play and to find opponents for 12 different games.

• Lego has announced the release of four buildable sets from the “Donkey Kong” franchise. The novelty points to an expansion of the partnership of the Danish brand, which until now only had sets based on the universe of “Super Mario Bros.”, with Nintendo.

• The “Call of Duty” franchise is expected to expand next year and get a board game, according to Variety magazine. The game developed by Arcane Wonders will be a strategy title that will put players in the role of elite soldiers trying to defeat each other in maps inspired by the game.

• The developers of “Dead Island 2” celebrated on twitter that the game reached one million copies in just the first weekend after launch, on the 21st.

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games that will be released in the next few days and promotions that are worthwhile

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“Age of Wonders 4”: BRL 165.99 (PC), BRL 184.95 (Xbox X/S), BRL 264.90 (PS 5)
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“Golden Idol Mysteries: The Spider of Lanka”**: price not available (PC)

*Available on Xbox Game Pass
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promotion of the week

Next Thursday (4) Star Wars Day is celebrated all over the world. In celebration, GOG.com and Steam have already put a series of franchise games on sale with discounts of up to 85%, such as “Star Wars: Squadrons” for R$ 29.85 (-85%), “Lego Star Wars – The Skywalker Saga” for R$79.99 (-60%).