“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 give rise to a foreclosure concern,” Microsoft writes. The filing was first spotted yesterday by Rock Paper Shotgun (who understandably referred to the statement as a “weird flex, but okay”).
While it might appear at first like Microsoft is testing the type of reverse psychology that Tom Sawyer used to get his friends to do his chores, the filing provides additional context. When Microsoft mentions “foreclosure concerns,” it’s specifically referring to post-acquisition Activision’s ability to foreclose other game distributors from accessing the content they need to participate and compete in the market—a major concern for those wary of the potential merger. From Microsoft’s perspective, the filing is meant to reassure the Commission that the acquisition wouldn’t disrupt industry competition. By saying none of Activision’s games are all that important, it’s displaying (or at least feigning) confidence that other distributors will continue to be able to compete…albeit in kind of a weird way.
(Photo: Activision Blizzard)
Though almost half of the filing is spent explaining the intricacies of the video game market to the Commission, the other half attempts to defend Microsoft from horizontal competition concerns. Microsoft argues that due to the market’s fragmented nature, it couldn’t develop what most of us would consider a monopoly; post-transaction, plenty of “industry heavyweights” would remain, along with “a vibrant long tail of smaller competitors.” The company points to Tencent (which owns Riot Games and has a stake in Epic Games) and Nintendo before digging into Sony’s murky waters.
Despite Sony’s despair regarding Microsoft’s potential acquisition of Activision, Microsoft reminds the Commission that Sony owns Naughty Dog and has recently acquired Bungie, further cementing its place as the second largest player in the industry. Later on in the filing, Microsoft speculates that Sony will remain a particularly rigorous competitor in relation to subscription services—something Activision only offers in-game.
Speaking of Sony (which insists that Call of Duty, one of Activision’s top franchises, is an unreplicable “blockbuster”) Microsoft’s filing makes mention of its commitment to keeping Call of Duty multi-platform: “Microsoft 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.”
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