There are already more than three regulators approving Microsoft’s acquisition of Activision Blizzard; in this case it is the Office of the National Economic Prosecutor (FNE) of Chile which gives the green light to the first phase of its examination. This entity joins regulators from Brazil, Saudi Arabia and Serbia in approving the purchase.
According to report presented today, the FNE did not find in the purchase any possibility that Microsoft could reduce its competition with this agreement. So much so that they identified that in Chile there was a market flow where consumers had different habits and preferences, so competition was not going to be significantly affected.
These companies operate in the same segments: development, publishing and distribution of video games; and at different levels, with Microsoft producing the Xbox console and other video game platforms, such as GamePass, where their businesses overlap both horizontally and vertically.
Latin America approves the purchase of Activision, an important market for Microsoft
It is well known that Latin America is an important niche for Microsoft, from Brazil to Mexico, the dominant company has been Xbox for quite some time. While not such a prominent area in all regions, the support of these countries for acquisition is relevant. And they said so in today’s report, because in a survey carried out, it is clear that Call of Duty is the differential factorbut that most players would not be willing to switch video game consoles for an offer of this magnitude.
It was also considered that the number of consumers who would prefer to switch consoles in the face of a blocking strategy would also be lower, which was verified through a survey of Chilean consumers, and that the significant revenues generated by Playstation in favor of ABK would discourage the adoption of a blocking strategy.
In this way they also explain that Activision Blizzard King is a very important company in the sector, but it is not the only one that represents the third-party market for Sony and Microsoft. So much that Microsoft would continue to depend on other studies such as EA or Ubisoft to stay current in the industry,
In the vertical risk assessment, the possible blocking of entries has been excluded, consisting of Microsoft, after the acquisition of ABK, ceasing to supply games like Call of Duty to your competitors. This considering, among other arguments, that ABK faces competitive pressure from players such as Electronic Arts, Take Two, Ubisoft and Epic Games, Sony and Nintendo, and that the relevance of Call of Duty it would be comparatively lower in Latin America than in other regions of the world.
Ultimately, this class of regulators may not represent much of a change in the future of buying as the most important markets are the US, where the FTC appears to be looking to curb buying; Europe, where the CMA analyzes the agreement in the second phase and Asia, a little shy for Sony, but where Microsoft is imposing itself with force. Finally, LATAM is an area where Xbox has come a long way for its perks and good pricesunlike the competition which does little to make it happen in a good way.
