Microsoft Defends Activision Blizzard Acquisition, Claims Studio Makes No “Must Have” Games

Microsoft claims that Activision Blizzard doesn’t make any unique or “must have” games for it to be considered a legal threat to competition.

In its letter to the Commerce Commission in New Zealand, Microsoft defends its bid to acquire Activision Blizzard by tackling concerns raised regarding competition in those markets where the company operates.

According to the software giant, there is nothing unique about the video games developed and published by Activision Blizzard that is a “must have” for rival PC and console video game distributors that could give rise to a foreclosure concern. Microsoft further states that it has demonstrated that it is not withdrawing content from other platforms, having made multiple public statements that it will continue to make Call of Duty and other popular Activision Blizzard titles available on PlayStation through the term of any existing agreement and beyond. The company also plans to take similar steps to support Nintendo’s platform.

Additional justifications regarding the acquisition include other major publishers, including Tencent and Sony, which are now competing with Microsoft’s Xbox Game Pass via its new PS Plus subscription tiers. Valve and Epic Games are also seen as competitors by the software giant in a post-acquisition landscape.

Similarly, with respect to mobile games market, Microsoft claims that one of the key drivers of growth is the low barriers to entry. It states that significantly less capital investment is needed in the development of mobile games, as development teams are smaller and generally require less technological innovation. Furthermore, the software giant quotes prominent examples of successful mobile games developed and published relatively quickly with a low budget, such as the mobile versions of Minecraft and Flappybird, which were developed and published by a single individual.

Another interesting point to note is that the Call of Duty, World of Warcraft and Candy Crush franchises represented 82% of Activision Blizzard’s net revenue in 2021. It’s unlikely that Microsoft would want a decline in said revenue going forward by making them exclusive to the Xbox ecosystem.

Meanwhile, Sony has an entirely different take on Microsoft’s acquisition of Activision Blizzard, as well as the significance of franchises like Call of Duty.