“Microsoft should be prepared for this kind of scrutiny,” said the specialist, adding that other entities, including the United States Federal Trade Commission (FTC), have also expressed their comments against the merger, while the transaction is being completed. extended for over a year.
Microsoft vice president Brad Smith said they will appeal the CMA’s decision, as the body “rejects a pragmatic path to address competition concerns and discourages technological innovation and investment in the UK.”
Cloud and mobile gaming, the main objectives of this game
Although the discussion around the agreement began with Sony’s claims regarding the Call of Duty franchise, the underlying issues that concern both regulators and the Japanese company is the dominance that Microsoft could have both in video games in the cloud and mobile.
According to figures from the consultancy specialized in video games, Newzoo, the market for mobile and cloud games is expected to generate 103.1 billion dollars and 8.2 billion dollars, respectively, by 2025.
With the acquisition of Activision, Microsoft could have gained a large stake in both verticals, since on the one hand it would have taken over King, developer of the popular mobile game Candy Crush, and it would have also increased its offer of titles for Xbox Cloud Gaming, a subscription service, whose main feature is the ability to play without the need for a specific console or device.
Although there are cloud gaming platforms from companies such as PlayStation or even Netflix, Xbox is one of the best positioned among users, due to its wide catalog of available titles, as well as allowing you to play some of the most recent releases. from day one without the need to buy it.
“The cloud allows players to instantly try a game before downloading it, access next-generation content without expensive or hard-to-find hardware (…) We believe that cloud gaming will play a huge role, making everything more seamless and eliminating friction,” said Newzoo lead cloud gaming analyst Guilherme Fernandes.
Fernando Esquivel, an analyst at The CIU consultancy, points out that these two verticals are where the market is heading and that is why Microsoft was so interested in buying it.
Only in Mexico, according to data from this firm, Candy Crush is the favorite video game franchise, while Call of Duty is the fourth. Likewise, 82.1% of users play through their cell phones and, although they download the titles for free, they do carry out microtransactions on them.
A decision that marks the industry and demands more attention
Faced with opposition comments from the regulatory authority, Microsoft proposed to resolve their concerns, starting with establishing “requirements that govern which games Microsoft must offer to which platforms and under what conditions over a ten-year period.” However, the regulator rejected the proposals.
Esquivel pointed out that despite not gaining a larger share of the video game market than Sony or Tencent, in the long term acquisitions of this size could affect the industry in terms of innovation and motivation to invest.
“The fear of the regulators is what this purchase can generate, such as the blocking of important games in the long term, which would give Microsoft a greater participation and then it is more difficult to attack a giant,” he said.
For his part, García del Bosque concluded that although this decision does not affect Microsoft’s business, since it is a company that is too big with other successful verticals, it sets a precedent for the video game industry, especially for those companies that have a large participation, because the smaller ones should not be affected.
