(Image credit: CMA)<\/span><\/figcaption><\/figure>\nWhy am I railing on the CMA? Primarily to illustrate the establishment’s continued and ongoing ignorance about all things tech and, moreover, all things gaming. The first phase of the CMA examination seems to revolve around scraping Twitter hot takes rather than actual market data. At least theoretically, the second phase should lead to a more in-depth examination of how the deal could impact the UK market.<\/p>\n
If anything scuppers the deal, it will most likely be a combination of incompetence and projection. Having allowed tech corps run wild with acquisitions for decades, regulators might be re-examining their purpose in a world where Meta has destroyed Instagram and eroded privacy protections on WhatsApp, while Google has become the global arbiter of what you can see on the internet.<\/p>\n
Microsoft described the CMA’s opposition as “misplaced,” and frankly, there isn’t a better word to describe it. Unlike search engines and social media, the gaming industry is vibrant and competitive, with a large amount of room for small up-and-comers to disrupt the industry. The same cannot be said for various other emergent internet industries regulators have failed to, you know<\/em>regulate \u2014 but I digress.<\/p>\nThere’s no guarantee the deal will fail, of course. Microsoft could make concessions, like a firm contractual commitment to keep Call of Duty on PlayStation in perpetuity, for example. But let’s assume the deal doesn’t go through for whatever reason, what would be Xbox’s next move?<\/p>\n
If it fails, what could Microsoft do next?<\/h2>\n\n\n
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<\/picture><\/p>\n<\/div>\n<\/div>(Image credit: Activision)<\/span><\/figcaption><\/figure>\nThe phrase “be careful what you wish for” comes to mind with regard to this whole situation, as I feel PlayStation’s intervention with regulators has effectively given Microsoft a mandate to take the gloves off and return to the aggressive days of the Xbox 360 era.<\/p>\n
For years, Microsoft has behaved like a company that wanted to co-exist with PlayStation for the good of the industry at large. Microsoft continues to support Minecraft, Fallout 76, The Elder Scrolls Online, and other games that predate acquisitions. Meanwhile, Sony has garnered a reputation for carving out exclusive chunks of games like Destiny and Call of Duty to the detriment of Xbox and PC players. This has extended to entire franchises like Final Fantasy with vague exclusivity periods that create confusion for Xbox customers.<\/p>\n
I don’t begrudge Sony for doing so \u2014 it’s all business at the end of the day. I’m here speaking analytically. The only horse I’ve got in this race personally, as a fan, is Blizzard, who I want to free of its CEO, Bobby Kotick. Kotick, who remains at the helm of the firm, reportedly oversaw a “frat boy” culture and knew of sexual harassment claims that led to an ongoing lawsuit in the California courts.<\/p>\n
I also hope to see dormant Activision Blizzard franchises revived, like Starcraft or Guitar Hero, as hinted at by Microsoft gaming CEO Phil Spencer. Today’s Activision Blizzard is a trend-chasing price-gouger that leaves mountains of beloved IP dead because it only makes millions instead of billions. <\/p>\n\n\n
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<\/picture><\/p>\n<\/div>\n<\/div>Fans of many classic Blizzard franchises are hoping Microsoft will revive some of the firm’s classic IP such as Starcraft, in a world where Activision has left them to rot. <\/span>(Image credit: Blizzard)<\/span><\/figcaption><\/figure>\nThat’s the regulatory irony here, really. Gamers, regardless of platform, would benefit from this deal, with more games across more platforms. Arguably Activision Blizzard staff would benefit, too, given that Microsoft has signaled a quite relaxed attitude towards unionization. But for whatever reason, regulators seem intent on preserving the status quo specifically for Sony PlayStation.<\/p>\n
Sony may end up regretting getting involved, though. In a world where Microsoft has been sat down and told by regulators that Sony’s way of doing business is the correct way, Sony could unwittingly move into a position where it loses bidding wars on content left, right, and center. <\/p>\n
Microsoft could quite easily take up that Call of Duty marketing deal from Sony. The Xbox platform holder could dump a pile of cash on Square Enix for exclusive Final Fantasy games. It could offer millions of dollars to make franchises like Monster Hunter, Grand Theft Auto, Persona, and who knows what else, timed Xbox exclusives. It could take up Tencent’s strategy, grabbing strategic and influential positions at companies through stock purchases to PlayStation’s detriment. <\/p>\n
The firm will have $70 billion dollars to play around with, after all. Plus, in this inflationary economic climate, sitting on that cash is a big no-no. With the gloves off, Microsoft could completely change tactics, and regulators will have essentially given them the mandate to do so. <\/p>\n
The deal falling through could end up being worse for PlayStation, and consumers in general<\/h2>\n\n\n
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<\/picture><\/p>\n<\/div>\n<\/div>(Image credit: Source: Trish Tunney\/GDC)<\/span><\/figcaption><\/figure>\nMicrosoft could quite easily create a climate where PlayStation gamers end up deprived of more games than they would have been had Microsoft simply been allowed to complete its acquisition \u2014 and there would be little regulators could do to step in here since it would be just business deals between two free companies.<\/p>\n
I wrote previously that Sony knows Microsoft won’t remove Call of Duty from PlayStation. Minecraft exists as a prime example, pulling in a ton of cash from remaining on PlayStation, and moreover, it isn’t the bad guy. Microsoft was hammered by the media for taking a timed exclusivity deal on 2015’s Rise of the Tomb Raider a few years back, and it hasn’t revisited that approach since. However, this whole ordeal could leave it with little choice if it’s to remain competitive.<\/p>\n\n\nLiterally nobody wants to see Call of Duty taken away from PlayStation. <\/p>\n<\/blockquote>\n<\/figure>\n
The message regulators could end up sending here is “do business like Sony.” While telling Activision employees, “no, you don’t deserve better.” It also tells fans of Activision’s back catalog to accept the endless cycle of Call of Duty, Call of Duty, Call of Duty, to keep the money coming. It suggests little hope for Starcraft, Guitar Hero, Prototype, or other classic franchises to return. <\/p>\n
Perhaps most egregiously of all, the CMA seems hellbent on preventing consumers from getting a better deal with Xbox Game Pass \u2014 despite the fact that’s the body’s entire reason for existing. The CMA says PC and Xbox gamers should have to pay $70 for Call of Duty instead of $10. And why? Simply because the market leader opted out of competing. It amounts to a dereliction of duty at best, but that seems to be par for the course every time a government body takes even the vaguest interest in the video game industry. <\/p>\n
But hey, if that’s what regulators want, Microsoft might play its game. If Microsoft is forced to compete on Sony’s terms, it could be a world Sony may find itself regretful to be in.<\/p>\n<\/div>\n