It has been a while since Microsoft announced that it has acquired Activision/Blizzard. It hasn’t been a easy road for Microsoft, since it has to go through regulatory approvals. There isn’t too much of a disagreement other than the industries that Microsoft deals with. Most countries are politicking with Activision, so is Activision, in response. The major point of contention is by Sony, because the acquisition throws a wrench in their plans. Google and Nvidia contested the acquisition earlier, but nothing more.
Since then, California, United States, FTC, and SEC raised concerned over the deal because Activision is already in hot water on a separate controversy. As of December 2022, Saudi Arabia, Brazil, Serbia and Chile have approved the acquisition with zero regulatory concessions for Microsoft. However, European Commission raised concerns, and now UK’s CMA is in on the action…
United Kingdom has an authoritative body known as “Competitions and Markets Authority,” which is shortened as “CMA,” below. CMA posted a blog post to talk about the Microsoft/Activision acquisition, they’ve titled it as “Microsoft – Activision deal could harm UK gamers.” The below image is on Page 3 of this PDF article by CMA. Titled “ANTICIPATED ACQUISITION OF ACTIVISION BLIZZARD, INC BY MICROSOFT CORPORATION,” the CMA has some “remedies” to “satisfy” the CMA.
[Source: Twitter]
The excerpt follows:
At this stage, the CMA has identified the following possible structural
remedies:
> Requiring a partial divestiture of Activision Blizzard, Inc. This may be:
– Divestiture of the business associated with Call of Duty;
– Divestiture of the Activision segment of Activision Blizzard, Inc. (the
Activision segment), which would include the business associated
with Call of Duty;
– Divestiture of the Activision segment and the Blizzard segment (the
Blizzard segment) of Activision Blizzard, Inc., which would include
the business associated with Call of Duty and World of Warcraft,
among other titles.
– Prohibition of the merger.
What the CMA is saying is that Activision is required to DIVEST partially. As in, sell off assets in parts, the first part says to divest BUSINESS associated with Call of Duty. Bear with me, here, I’ll explain this later.
Divest the Activision segment of the Activision Blizzard from the holding company and sell it off. Both has similar ideas. Bad ideas. One divests Activision from Call of Duty, the other divests the entire Activision business including Call of Duty. Divest Activision and Blizzard separately, from the holding company. The associated trademarks goes with the divested businesses.
Now, that being said, I’ll explain everything.
What CMA UK doesn’t understand (and I said this in the video below) is that Activision Blizzard, Inc. and/or Activision Blizzard King, Inc. is a holding company. On the Activision side of the company, you have “Activision Publishing, Inc.,” which is the publishing arm of Activision. “Activision Blizzard Esports,” which is formerly “Major League Gaming,” and now operates “Overwatch League,” “Call of Duty League,” “Hearthstone Masters, and Grandmasters,” “World of Warcraft,” “Mythic Dungeon International,” and “Arena World Championship,” and “Tespa.” Activision Blizzard Media and Activision Blizzard Studios are different companies that I don’t have a clear idea of what they do, except that Activision Blizzard Studios is intended for Activision/Blizzard films. Warcraft is one such project that was developed and released by Activision with help from studios like Legendary Pictures, Blizzard Entertainment, Atlas Entertainment, and a few others.
Blizzard is a completely different beast, a completely different company. But is part of the same holding company, because Activision acquired the company, and is named in the holding company. Activision and Vivendi Games merged together before being known as “Activision Blizzard.” All companies are American, by the way… So, how is CMA able to threaten Activision to divest their companies from a franchise like Call of Duty…?
There is an Activision company in United Kingdom, but Activision can just shut down the division, and not deal with UK’s authority. United Kingdom is trying to build a “Silicon Valley” in their country, and Activision straight up told UK regulators that if they blocked the deal, there’d be a “death valley.” And I agree with his statement, because Activision is a major influence in economic activity in Europe. So is Microsoft, Nintendo, Sony, Google, etc. So, if you discourage one company in Europe, everyone else follows suit. Simple. [Windows Central agrees on this notion.]
Aside from that, Activision isn’t the only company in Activision. Under Activision, there are tons of companies, there are 3 major companies: Infinity Ward, Treyarch, and Sledgehammer Games. These company work on Call of Duty, year in and year out. So if you sell off Call of Duty, then you break the chain of harmony. You would be gutting the soul of Call of Duty.
There are more companies under Activision: Raven Software, Beenox, High Moon, and Toys for Bob. There are lesser known studios owned by Activision, too. Activision has regional companies like UK, Canada (under Demonware, and Beenox), Spain (Digital Legends), Japan, Australia, Ireland, Mexico, and sadly China.
I’ve written a similar story with regards to China. This article is an upgraded suggestion to Activision: STOP dealing with China, and STOP praising them. It’s not going to do anything for you in the Public Relations realm. You are going to have a massive problem on your hands. While Bobby Kotick went on a public speaking tour, he praised Tencent, and ByteDance front and center on TV.
What does Microsoft want from this acquisition? The official wording from Microsoft is that they want the mobile gaming sector. Which happens to be a company called “King.” (Which Activision Blizzard owns.) However, Microsoft deals with game consoles, cloud gaming, AND the aforementioned mobile gaming segment. They’ve released a mobile phone previously, but they don’t have a blockbuster product to go with the mobile phones.
Microsoft has been trying to make a dent in the gaming industry with Xbox. Xbox 360 sold pretty well, but Microsoft wants to move the needle and thwart Sony’s juggernaut growth over the past 20 years with PlayStation consoles. Furthermore, Microsoft has experimented with cloud gaming for a while now. Their Cloud Gaming sector is currently live under the Xbox Game Pass banner. Microsoft doesn’t just want the mobile gaming sector, they want to do what they did with their Bethesda acquisition – by making their games exclusive to Xbox. They say that they have no intention of making Call of Duty exclusive to Xbox, but the Bethesda acquisition tells us a whole different story. They cite Minecraft as their ideal intention with the Activision acquisition. Everyone sees through it, including Sony.
Why is Sony angry? Since 2015, Sony has secured a 10-year “exclusivity” deal for Call of Duty content to be only for PlayStation. This would have meant that Call of Duty’s DLC content would be exclusive to PlayStation for 10 years, similar to the Destiny deal. Sony sees a lot of revenue coming through PlayStation because of Call of Duty, and the Call of Duty brand identity associated with PlayStation.
I have responded to the story in a YouTube video.
