It was the Brazilian authorities’ investigation that began to provide details and exchanges between Xbox and PlayStation, and is yet to be completed. This time officially Brazil has confirmed that Microsoft has taken over Activision.
Brazil approves deal between Microsoft and Activision Blizard King
The Economic Defense Board of Directors (CADE) therefore decided last night and sees no obstacles to Microsoft’s bid for Activision Blizzard for approximately $69 billion.
This is the second confirmation of the takeover, the first of which was made by Saudi Arabia in the summer. As a reminder, a response is expected from Europe and the USA in November, while the British authorities will make their decision in March 2023.
Therefore, Brazilian officials believe that the competition will not spoil if Microsoft offers Activision Blizzard and King. In their arguments, they also fully evoke competitors in the industry, scratching some of Sony’s arguments for PlayStation in passing.
Call of Duty exclusivity is no problem
The results of the Brazil report show that the concentration of the video game industry created by this historic takeover will be less than 20%. It also stated that “Activision Blizzard games – particularly the Call of Duty series – will not be essential assets for the performance of existing games and potential competitors in the console and digital game distribution markets.”
The Call of Duty case has therefore been investigated, and officials state that this license will not hinder market competition even if it becomes exclusive to the Xbox ecosystem.
Even if the Activision Blizzard game catalog becomes exclusive to the Microsoft ecosystem after the transaction, SG/Cade considers that such exclusivity will not lead to a significant reduction in competition levels in downstream markets. Microsoft.
Point 5 of the conclusion is indirectly reminiscent of the case of Sony trying to derail the deal in a big way.
It is also important to emphasize that the main purpose of CADE’s activities is not to defend the specific interests of certain competitors, but to preserve competition as a means of increasing the well-being of Brazilian consumers.
In this sense, if it is accepted that some PlayStation console users may decide to switch (from Sony) to Xbox if Activision Blizzard games and especially Call of Duty become exclusive to the Microsoft ecosystem, SG/Cade does not compete in the general console market in itself. Do not believe that it poses a risk to you.
However, CADE acknowledges that custom games are a benchmark of competition between Microsoft and Sony, “although to date no company has developed or purchased a custom game that has definitively tipped the balance in favor of a console”. The proven report accurately states that “first-person custom games are less popular and represent less revenue than third-person AAA titles so far available on Xbox and PlayStation.”
Therefore, the report concludes that if the takeover were effective, there would be “no significant risk to competition”. he adds “In all the scenarios examined, the Parties’ market shares in these segments, No. 33/2022. ».