Microsoft’s proposed acquisition of Activision Blizzard has a major hurdle to overcome before it can be approved, with the United Kingdom’s Competition and Markets Authority (CMA) having blocked the deal, but more recently, the European Commission did end up approving it.
In the aftermath, a speech by European Commissioner for Competition Margrethe Vestager has been published, where she explains the regulatory body’s reasoning for approving the deal- with one crucial factor being the massive advantage PlayStation already has over Xbox in terms of marketshare in Europe.
According to Vestager, PlayStation console sales in the region are roughly four times as high as those of Xbox, and only in very particular market segments does that gap grow smaller- like with shooters, where the overall marketshare increases to over 20% for Microsoft and Activision.
“An important finding was that the overall market share for Microsoft and Activision was generally low in Europe,” Vestager said. “It’s only when you look at specific segments like ‘shooter games’ that you get to above 20%. And for consoles, Sony sells about 4 times more PlayStations than Microsoft sells Xboxs.”
“With this context, we did not think the merger raised a vertical issue. I am told Call of Duty is a very popular shooter franchise,” she continued. “But we found that Microsoft would probably not shoot itself in the foot by stopping sales of Call of Duty games to the much larger PlayStation player base. Our colleagues at the CMA agreed with us and ultimately reached the same conclusion.”
As for Microsoft’s struggle to get the deal approved in the UK, the company has lodged an appeal against the CMA’s decision, though it remains to be seen how long the wait for a final resolution will go on.