Gaming

Activision Blizzard for Xbox: Brazil confirms takeover and takes on Sony!

It was the investigation by the Brazilian authorities that began to deliver details and exchange information between Xbox and PlayStation, and it has just been completed. This time, Brazil officially confirms the takeover of Activision Microsoft.

Brazil approves deal between Microsoft and Activision Blizard King

So the Board of Directors for Economic Defense (CADE) made a decision last night and sees no barriers to Microsoft’s Activision Blizzard bid of nearly $69 billion.

This is the second takeover check, the first of which was made by Saudi Arabia in the summer. Recall that responses from Europe and the United States are expected in November, and the British authorities will issue their verdict in March 2023.

Therefore, the Brazilian authorities believe that competition will not be distorted if Microsoft offers Activision Blizzard and King. In their arguments, they also refer specifically to competitors in this sector, in passing crossing out some of Sony’s arguments in favor of the PlayStation.

Call of Duty exclusivity won’t be a problem

The findings of the Brazilian report show that the concentration of the video game sector caused by this historic takeover will be less than 20%. It also clarifies that “Activision Blizzard games – and in particular the Call of Duty series – will not be important assets for the performance of current games and potential competitors in the console and digital game distribution markets.”

Therefore, the case of Call of Duty has been studied, and the authorities indicate that even if this license becomes exclusive to the Xbox ecosystem, this will not prevent competition in the market.

Even if Activision Blizzard’s game catalog becomes exclusive to the Microsoft ecosystem following the deal, SG/Cade believes that such exclusivity will not significantly reduce competition in subsequent markets, even if it could translate into a competitive advantage for Microsoft.

Point number 5 of the conclusion indirectly resembles the case of Sony, which to a large extent tried to disrupt the deal.

In addition, it is important to emphasize that the main purpose of CADE’s activities is to protect competition as a means of improving the welfare of Brazilian consumers, and not to protect the specific interests of specific competitors.

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In that sense, if it is recognized that some PlayStation console users (from Sony) may decide to switch to Xbox in the event that Activision Blizzard games, and in particular Call of Duty, become exclusive to the Microsoft ecosystem, SG/Cade do not believe that this possibility in itself poses a risk to competition in the console market as a whole.

However, CADE admits that exclusive games are the benchmark for competition between Microsoft and Sony, “although no company has yet developed or acquired an exclusive game that would finally tip the scales in favor of the ‘console’. The substantiated report correctly states that “Third party exclusive games are less popular and generate less revenue than third party AAA games that have been available on Xbox and PlayStation so far. »

Thus, the report concludes that “there will be no significant risk to competition” if the takeover is effective. He adds that “the market shares held by the Parties in these segments are, in all scenarios considered, well below the minimum percentage considered for the purposes of presumption of market closure as defined in Article 8, IV of CADE. Resolution No. 33/2022. “.

Latest update on Activision Blizzard takeover

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