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Brazil’s Administrative Council for Economic Defense Approved Activision Blizzard ‘s Acquisition!

The Brazilian CADE is the second public body after the General Authority for Competition of Saudi Arabia to approve Microsoft’s acquisition of Activision Blizzard.

 

VGC quoted CADE’s explanation on giving Microsoft the green light: “Considering the vast popularity of Call of Duty, it is reasonable to infer that if Activision Blizzard games were no longer available on Sony consoles, PlayStation users could decide to migrate to Xbox, or even a PC, to continue having access to franchise games. On the other hand, it’s also reasonable to assume that if upcoming Call of Duty games became exclusive to the Microsoft ecosystem, players loyal to the PlayStation brand could abandon the series, migrating their demand to other games available on their favourite console. Despite this, one cannot rule out the possibility that Microsoft may deem it 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 part of sales, users and even the Call of Duty popularity. It is because, in theory, such a strategy could boost Xbox sales, expand the Game Pass subscriber base and strengthen the network effects on the Microsoft ecosystem to offset any loss of revenue from the sale of games in the short term.

Exclusive games are a benchmark of competition between Microsoft and SIE. However, no company has so far developed or acquired an exclusive game that has decisively shifted the balance in favour of a console. It is because proprietary exclusive games are less popular and represent less revenue than third-party AAA games, which, until then, are available on Xbox and PlayStation. As already seen, Nintendo does not currently rely on any content from Activision Blizzard to compete in the market. In turn, Sony has several predicates – the strength of the world’s leading brand for more than 20 years, extensive experience in the sector, largest user base, the most extensive installed base of consoles, robust catalogue of exclusive games, partnerships with multiple publishers, brand loyal consumers, etc. – which should contribute to maintaining the competitiveness of PlayStation in a possible post-Operation scenario, even in the face of possible loss of access to Activision Blizzard content.

Furthermore, it is essential to highlight 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 defence of the particular interests of specific competitors. After all, one cannot lose sight of the holder of the legal assets protected by Law No. 12,529/2011 as the collectivity and not the competitor/economic agent as an individual entity. In this sense, although it is recognized that part of the users of PlayStation consoles (from Sony) could decide to migrate to Xbox if Activision Blizzard games – and especially Call of Duty– become exclusive to the Microsoft ecosystem, SG/Cade does not believe that such a possibility represents, in itself, a risk to competition in the console market as a whole,” the regulator wrote.

Meanwhile, on the home turf in the US, the FTC (Federal Trade Commission) will rule on the nearly $70 billion deal by the end of November at the latest, Dealreporter reports. Their investigation is at the staff level for now but is expected to go to the commissioners through the Bureau of Competition in the coming weeks. The staff reportedly has significant concerns and has discussed the matter with several competitors opposed to the deal, including Sony and Google.

The European competition watchdog has given a provisional deadline of November 8 to approve the deal, or they might follow suit of the UK competition and markets watchdog, the CMA, to launch a second, more detailed phase of investigation…

Source: VGC, VGC

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