Microsoft is reportedly buying Activision Blizzard. To do this, they need legal approval from competition regulators around the world.
The FTC or the European Commission is the biggest in this case, but to approve a deal, it needs to be approved by about 20 different regulatory authorities in different countries. One of them is Brazil, where the review process began on May 20.
As user ResetEra points out, during this review process, the regulator asks third parties what they think about the transaction and compares that information with data from the parties involved (Activision Blizzard and Microsoft, case in point). The Brazilian government is open about the transparency of public administration, in this review process almost everything was asked online, including third parties, and what they answered. You can follow all the documents here.
Below we’ve put together a summary (made by user ResetEra himself) of what each PlayStation-related company discussed (in this case, Sony):
According to the company, from a development/publishing perspective, game development typically involves an early stage that is platform-neutral until the game is optimized for one or more specific platforms.
They believe that all games compete for player attraction. Players choose a gaming platform based on price, technical features and available game types. Available content is a key factor for choosing a gaming platform.
That said, there are few barriers to entry for PC game development and publishing. Only a developer can create an “indie” game and distribute it online, but creating a high-end AAA game (like Activision’s Call of Duty) requires a budget of hundreds of millions of dollars and thousands of employees.
Apart from Activision, there are said to be few developers/publishers capable of producing AAA games such as EA (FIFA), Take-Two/Rockstar (Grand Theft Auto) and Epic Games (Fortnite). These games are long-running franchises with big budgets, multi-year development cycles, and very loyal followings.
Despite all this, Sony believes that none of these developers can create a franchise that can compete with Activision’s Call of Duty, which stands out as a game category in its own right. That’s why they believe Call of Duty is so popular that it influences users’ choice of console. In fact, its network of loyal users is so entrenched that even if a competitor had the budget to develop a similar product, it would not be able to compete.
They talk about the time, money, number of employees, millions of followers, sales and other information related to Call of Duty to show what a unique franchise that cannot be replaced.
Accept that subscription services compete with games purchased for a one-time fee. But they think the lower upfront costs of subscription services could be competitive for publishers, who can recoup significant investments in games by selling them for an upfront fee. They also believe that games can harm consumers by reducing their quality.
Over the past five years, Game Pass has grown to occupy approximately 60-70% of the global subscription services market (this market share is even higher in Brazil, where Game Pass accounts for approximately 70-80% of the subscription services market). subscription for PC).
They believe it will take years for a competitor to create an effective competitor to Game Pass – even with significant investment.
Call of Duty represents a major revenue stream for PlayStation (they provided the data, but it’s hidden) and is one of SIE’s largest third-party revenue streams.
Developing and publishing PC and console games can require an investment in terms of value, time and resources. However, the existence of several companies developing and publishing games for PCs and consoles suggests that such barriers are not sufficient to prevent entry and/or strong competition from companies operating mainly in some industries such as electronics or software. The mobile market also has lower barriers to entry.
There are currently no specific comments or concerns regarding the transaction. Anyway, many hidden answers in this case.
For Ubisoft, the PC and console markets are the same, but mobile is completely different.
There is no basis for market differentiation according to their genres and types. Many games cross genres and players are usually not limited to one game genre.
They don’t think Activision Blizzard has unique games because there isn’t a video game title that doesn’t have strong competition. All publishers and games compete for available playtime, and no title is alone in its genre.
Battlefield, PUBG, Apex or Rainbow Six are competitors for COD. Candy Crush has several similar games and is an alternative to ESO Online or Blade & Soul WoW.
Talk about Ubisoft+ Classics for PS Plus or how they’re releasing their games on Gamepass alongside Ubisoft+.
They believe that subscription services are an ongoing trend in the industry and are growing in importance. But, at least for now, it can’t be considered a different market because it’s just another way to access content that’s available through other channels (like “play to buy”).
The PC and console markets are very similar, but the PC market is almost entirely digital, so the separation makes sense. Cell phones are very different. They don’t think the three markets should be merged.
Each game is unique. They are simultaneous competitors of Call of Duty like Battlefield, Valorant or Destiny. Same with World of Warcraft.
Different platforms should be considered: PC, console and mobile. They consider Naughty Dog to be a potential competitor to Activision Blizzard – Microsoft for creating AAA games.
Call of Duty, WoW and Candy Crush all have real competitors, they say. Battlefield, Apex, Counter Strike, Valorant or Rainbow Six for COD; Cookie Jam or Bejeweled and Candy Crush and Rift, Runescape, FF XIV or TERA and WoW.
According to Riot Games, subscription game services are part of the broader market for digital games, and consumers do not perceive them as competitors to privately purchased games, but as an alternative that is more suited to the preferences of players who do not mind keeping games. happy with the digital copy of the game and the subscription service game library offers.
They also think Microsoft will honor the public statements about cross-platform support for certain franchises. They do not expect anti-competitive effects in the market after the purchase.