Thursday, 22 June 2023 11:41

FTC Changes the Focus from Cloud to Xbox Vs PlayStation in Microsoft Activision Blizzard Deal (as it should be)

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In our coverage of the Microsoft Activision/Blizzard deal we have often wondered why so many of the groups that approved the deal, and one that opposed it, focused only on cloud gaming. We saw the UK say that the deal was bad for cloud gaming while others stated that a 10-year licensing deal for cloud gaming services that Microsoft agreed to made everything all better. As we looked over the approvals and oppositions this odd focus on what represents less than 1% of the gaming market seemed so out of place that started to feel that the opposition was just a token resistance and the deal (which is a bad thing) was just going to get rubber stamped.

Well, it seems that the Federal Trade Commission also believes that this deal is not just about cloud gaming, but about Microsoft’s ability to starve its competitors (namely Sony) of content. According to the public version of the FTC’s filing they believe “Microsoft’s ownership of Activision would provide Microsoft with the ability to withhold or degrade Activision content through various means, including manipulating Activision’s pricing, degrading game quality or player experience on rival offerings, changing the terms and timing of access to Activision’s content, or withholding content from competitors.”

The fears of the FTC seem very justified considering the threats that Activision have made recently to the UK. The simple fact that Microsoft and Activision both hinted that they might just not allow content for the whole of the UK is the deal was not approved is one of those “red flags” that people talk about. If they can remove games for an entire country starving out Sony is a small thing. I have not had the chance to review the entire redacted public FTC filing, but what I have seen is pretty solid in terms showing how bad this deal is for competition (regardless of what some in the press are saying). After all the threat of denying content, admissions that Microsoft cannot compete with Sony using “normal means” and pat behavior generally point to future abuse of their dominant position if Microsoft gets their hands on the Activision/Blizzard catalog.

Microsoft and Activision could face a serious uphill battle here with their acquisition. The FTC, by focusing on real competition and not cloud gaming, has put Microsoft and Activision into corner. They were able to easily get others to ignore the elephant in the room by waving cloud gaming around. This time that is not part of the argument so it will be hard to try and leverage a 10-year cloud gaming license as proof of their desire to compete in the market. It will be interesting to follow this one through to conclusion.

Read 608 times Last modified on Thursday, 22 June 2023 11:44

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