Antitrust authorities are increasingly questioning Microsoft's takeover of video game developer Activision Blizzard.
On Tuesday evening, the EU Commission announced that it would conduct a more in-depth review of the takeover.
Gregory Bruner
Editor in Business.
Follow I follow
In doing so, she follows the UK competition authority, which began scrutinizing the $69 billion merger in December.
In both cases, the complaint is that the transaction could restrict Microsoft's access to high-quality games in its ecosystems and impair competition.
Sometimes it's about sovereignty over the highest-selling individual publications of the medium;
especially the titles of the first-person shooter series "Call of Duty" are mentioned.
The latest installment in the series, Modern Warfare 2, broke sales records, raking in more than $800 million across multiple platforms this past weekend shortly after its release - while the rest of the market is slacking off in the wake of inflation and crises.
Above all, Microsoft's main competitor in the market for game consoles and game streaming, Sony, is threatening to get nothing more of this cake.
Is Microsoft outperforming the competition?
The big question in the room is whether Microsoft would still release titles like "Call of Duty" or "Overwatch" on other providers' platforms after the takeover.
Basically, it is about the sales of software as well as proceeds from cloud and streaming offers, through which the games can be accessed.
However, a foreclosure could also result in a second-round effect that many players would decide against the platforms from other manufacturers.
This would not only concentrate the sales of software at Microsoft.
Hardware sales, especially Sony's Playstation, are also likely to suffer from the takeover.
Trapped in the ecosystem
Phil Spencer, head of Microsoft's gaming division Xbox, recently promised to keep Call of Duty on the Playstation for as long as it exists, even after the takeover.
Sony, on the other hand, fears significant damage to itself and the competition in general should Microsoft gain control of the titles.
Spencer, on the other hand, countered that you would cut yourself in the flesh if you stopped selling Call of Duty on the currently dominant Playstation platform.
In addition to the console and streaming markets, the EU Commission also sees competition for PC operating systems at risk.
So far, titles from Activision Blizzard such as "Overwatch" and "World of Warcraft" can also be played on Apple's operating systems.
In the event of a takeover, Apple users' access to these titles would be in question.
The same applies in the market for mobile games, where Activision Blizzard is also a major player with titles like "Candy Crush Saga".
Apple's iOS mobile operating system could also be threatened.
Decisions expected in spring
The procedure was registered with the EU Commission on September 20, 2022.
By March 23, 2023, it must have made a decision on the matter.
A decision in the UK should also be available next spring.
The announcement by the EU Commission put a damper on the stock exchange.
Activision Blizzard shares were down around 0.5 percent on Wednesday morning.
Microsoft plans to pay $90 per Activision Blizzard share as part of the acquisition.
At a price of 72 dollars on the Nasdaq technology exchange, it is currently well below the takeover price.
That could be a sign that the markets don't really trust the deal to close.
Incidentally, games aren't the only sore point Microsoft has to deal with at the moment.
A group of cloud service providers filed a complaint with the European Commission on Wednesday against Microsoft's licensing practices that disproportionately attract customers to Microsoft's cloud infrastructures, financial service Bloomberg reported.