Microsoft’s acquisition of Activision Blizzard could spell trouble for SONY?

2022-04-28 0 By

Microsoft’s $68.7 billion acquisition of Activision Blizzard would be the biggest acquisition in gaming history.In particular, Sony, which owns the PlayStation platform and is Microsoft’s biggest rival to XBox, saw its share price plummet by 12.79% in a single day, wiping $20 billion off its market value, the biggest drop since the 2008 financial crisis.The acquisition, which is expected to close in 2023, will put Microsoft in third place behind Tencent and Sony.The impact on Sony’s market value comes from the fact that, generally speaking, after game console companies acquire game developers, they will monopolize games for their own platforms.Activision Blizzard owns blockbuster IP titles such as Call of Duty, Overwatch and Diablo, which are likely to become XBox-only titles once the Microsoft-Activision deal closes.And pulling out of the PlayStation would have a significant impact on Sony’s gaming revenues.Recently, game console companies have gradually “Netflixized”, that is, games in the cloud, and adopted a subscription model. For example, Sony PlayStation Plus users can play all games in the cloud for a monthly fee of $5 to $10.Microsoft also offers XBox Game Pass for $16 a month.There are currently 47.5 million Sony PlayStation Plus subscribers and 25 million Microsoft XBox Game Pass subscribers (as of Jan. 18).A deal with Activision Blizzard could be Sony’s ace in the hole?Sony left open the possibility that Microsoft could buy Activision Blizzard, but said it hoped the deal would not affect Sony’s existing partnership with Activision Blizzard and maintain activision Blizzard’s commitment to multiple platforms.Phil Spencer, chief executive of Microsoft’s games business, also assured activision Blizzard gamers on the PlayStation that activision Blizzard’s agreement with Sony would be honoured.However, What Spencer meant was vague. He could also have meant that “existing games” like Call of Duty: Modern Battlefields on PlayStaion would not change, and whether the new games would be covered by activision’s agreement with Sony.This part needs further development and interpretation.If Activision Blizzard’s agreement with Sony says, “All Activision Blizzard games will be available on PlayStaion indefinitely,” it’s unclear whether Microsoft would still decide to buy Activision Blizzard.Whether or not activision Blizzard’s new games make it to PlayStaion is likely to be the focus of the deal.Microsoft can’t buy it!At the same time, the success of Microsoft’s acquisition of Activision Blizzard may depend on the attitude of the U.S. government.Since taking office, the Biden administration has focused on strengthening the review of technology mergers and acquisitions.Microsoft’s activision blizzard deal announcement came as Federal Trade Commission chair Lina Khan and Assistant Attorney General Jason Kanter said they would review merger guidelines to examine similar mega-mergers.Media analysts say regulators are not only concerned about Microsoft’s market share, but also about consumer protection and user data acquired through Microsoft’s acquisition.Will Microsoft, which is particularly active in the development of the meta-universe, acquire activision Blizzard to gain huge market influence in the gaming platform, personal computer, cloud computing market and mobile market, and control users’ key biometric and privacy information?In addition to the U.S., European antitrust authorities are also expected to weigh in on the technology deal to see if Microsoft’s acquisition of Activision Blizzard would unfairly compete with rivals in other gaming industries.Microsoft, which doesn’t expect the deal to close until 2023, is likely anticipating a long regulatory review.