UK competition regulators to re-examine Microsoft/Activision Blizzard deal: Video Games Industry Memo, 24/08/2023
Activision acquisition saga rumbles on in the same week that a legendary voice actor steps down from an iconic role
UK competition regulator to examine new version of Microsoft/Activision Blizzard deal after Ubisoft step in.
Charles Martinet will no longer be the voice of Mario.
Mad British comedy game Thank Goodness, You’re Here! catches the eye at gamescom.
The big read - New version of Microsoft and Activision Blizzard deal goes under the microscope in the UK
They thought it was all over…well, it wasn’t quite in the end.
Microsoft’s attempt to acquire Activision Blizzard drags on into the Autumn after the UK Competitions and Market Authority (CMA) decided to re-investigate the deal following a regulator enforced restructure.
A new player has entered the game
Earlier this week, the CMA announced that it had blocked the initial proposal from Microsoft to acquire Activision Blizzard but that it also said that it was launching a Phase 1 investigation into a new version of the deal presented to it this summer.
Microsoft has offered build on its promises to license out Activision Blizzard content to cloud gaming providers further by handing the rights to administering that process to Ubisoft.
Over the next 15 years, Ubisoft will manage cloud gaming providers access to both existing Activision content and new releases outside of the European Economic Area (EEA). In return, they’ll give Microsoft a sack of cash up front and some ongoing pocket money in the years ahead to act as an independent third party guarantor for the deal.
The hope is that this will clear the way forward for the acquisition to be approved by 18th October, which is the CMA’s deadline for the completion of its new Phase 1 investigation.
Independence play
The announcement this week is another plot twist to this ongoing saga. Most people assumed that the deal would sneak through by the 29th August - the CMA’s previous deadline to approve or block the deal - and no-one saw Ubisoft getting involved in the cloud rights.
However, if you read between the lines, you can see that the new deal offers a route to a possible ‘win-win’ situation for both the CMA and Microsoft.
For Microsoft and Activision Blizzard, divesting the cloud game rights to Ubisoft demonstrates that it has, in theory, addressed the CMA’s chief concern with the deal which was its concern that it would have to closely check whether Microsoft was enforcing the terms of its licensing deal for a decade.
And while it seems on paper substantial enough to allow the CMA to look at the deal again, the cost of divesting to Microsoft is receiving a bit of cash in return for some minor inconvenience - a reasonable trade off to get the deal through.
Reverse-ferreting
As for the CMA side of the equation, it benefits from the new proposal because it allows it to extricate itself from a mess of its own making.
By being the only major competition regulator to reject the deal on cloud gaming concerns, the CMA had found itself uncomfortably isolated from the international consensus around the deal.
This was especially true when the European Commission and Judge Corley, who oversaw a court battle between the Federal Trade Commission and Microsoft over the deal, said the same deal it rejected improved competition in the cloud gaming space.
The new deal offered has therefore allowed the CMA to take a public stance that it was right to reject the deal, which it did so a little bit chippily in the press release.
But it now also has plenty of space to approve the deal on the basis of the changes, allowing it to present its tougher - but largely misguided - course of action as a cause for celebration.
What next?
The multi-billion dollar question is whether this finally goes through in October? Sarah Cardell, who heads up the CMA, was keen to stress that the decision to review the new proposal was not a “green light” for it to go through.
Nevertheless, our assessment is that it probably will. While the CMA could be liable to a change of heart or instigating a surprise Phase 2 investigation, sources close to VGIM indicate that this is likely to signal the beginning of the end.
So yes, we do agree with Sarah Cardell that this deal hasn’t been green lit just yet. But after months of uncertainty, we think it is - at the very least - finally taking on an emerald hue in the UK.
News in brief
Opening night dive: gamescom’s Opening Night Live event was disrupted by a stage invader who said “Bill Clinton wants to play GTA VI.” We all want to play GTA 6, Bill, but disrupting Geoff Keighley mid-flow with the help of an interloper is no-way to go about it.
Assuming (in)direct control: PlayStation has confirmed that its new Remote Play powered handheld, the PlayStation Portal, launches later this year. The price point seems competitive but its limitation to homes with an already on PlayStation 5 feels…a little terminal (note: not intended as a pun initially but let’s roll with it).
Unintended consequences: Indie game Luck be a Landlord has written a scathing post about Google Play’s decision to prevent his game from releasing in 13 countries due to its satirical slot machine mechanics violating gambling law. The decision is partly due to cultural conservatism but is also an unfortunate offshoot of industry agreeing to 18 rate all games with any simulated gambling to try to deal with concerns over loot boxes.
Roblox gambling ring: Speaking of things that aren’t gambling, Roblox has become the subject of a class action lawsuit in the US from parents who have accused it of enabling illegal gambling of Robux, Roblox’s in-game currency, via third party sites. Roblox rejects the accusation saying the sites are not affiliated with the game or company and are breaching its platform policies.
Eight strikes and you’re out: Last week, Microsoft announced a new eight strike system to help the community understand how bad behaviour can lead to them being kicked off the platform. Interestingly, only 1% of players receive a temporary suspension and only a third of those who are suspended receive a second ban at any point.
Blast off: Finally, Rocket Science has announced it is opening a new office in Cardiff which is interesting for three reasons: i) growing the Welsh games industry, ii) Government support for the venture and iii) puts another co-development games company into the UK games scene.
Ins and outs
A big one this week, with Charles Martinet stepping down from his role as the voice actor for Mario. He will instead take on the role of Mario Ambassador, presumably posted to the UN on behalf of the Mushroom Kingdom…Ben Kvalo and Rob Martin have unveiled a new publishing company called Midwest Games. Jennifer Corbett, previously at CrunchyRoll, also joins…and on the jobs front, Space Ape Games is looking for a new CMO with Simon Hade is advertising for the role via his Linkedin profile…
Events and conferences
PAX West, Seattle - September 1st - September 4th
XDS, Vancouver - September 6th - September 8th
PG Connects, Helsinki - September 11th - September 12th
WASD, London - September 14th - September 16th
Tokyo Game Show, Tokyo - September 21st - September 24th
Games for your perusal - gamescom 2023 edition
The biggest European games trade show, gamescom, has been taking place this week. So instead of our usual release round-up, we’ve picked out four games from the show that stood out to us.
Thank Goodness You're Here! - Bonkers British comedy game from the publishers of honking hit Untitled Goose Game.
Cyberpunk 2077: Phantom Liberty - Free game fixing update with new Idris Elba tinged content received a final trailer before release next month.
Hyenas - Creative Assembly’s long touted multiplayer shooter has been playable in the sweaty Koelnmesse halls.
Dark Forces - Remastered version of classic FPS coming soon to PC and console.
Before you go…
The new Mortal Kombat game has an audio description function for its fatalities and it is more grim to listen to than The Joe Rogan Experience.