Microsoft Says It’ll Still Be a Smaller Game Company Than Sony After Activision Deal

Microsoft’s chief executive officer Satya Nadella has said that his company will still be number three in the games industry even after its acquisition of Activision Blizzard is completed, should the U.S. Federal Trade Commission greenlight the deal.

Nadella made his comments during an interview with Financial Times, where he was quizzed about the deal being scrutinized by regulators to determine if it harms competition. While he acknowledges that the acquisition will be under a microscope, Nadella seems confident that it’ll go ahead because of Xbox’s third position in the games industry.

Sony vs Microsoft: Is Activision Blizzard deal anti-competitive?

It’ll be a while before the FTC makes its decision, but for now, Microsoft seems to be in the clear. Or at least that’s what analysts and Nadella think. “At the end of the day, all the analysis here has to be done through a lens of: ‘what’s the category we’re talking about, and market structure?’” Nadella told Financial Times. “Even post this acquisition, we will be number three with sort of low-teens share [of the video games market]. We will be a bit player in what will be a highly fragmented place.”

Microsoft insists that its acquisition of Activision Blizzard has to do with the development of the metaverse as opposed to pulling games off of rival platforms. However, Nadella has a different tone than Xbox CEO Phil Spencer, who immediately assured Sony that he wants to keep Call of Duty on PlayStation. Nadella is of the view that given Microsoft’s position in the market, it shouldn’t have to “make any formal concessions” to have the acquisition approved.

Opinion: The Xbox Activision acquisition can’t be stopped

Zarmena writes… As I’ve said before, the Xbox Activision deal will irk authorities, but it’s unlikely that they’ll succeed in blocking the acquisition. For starters, Microsoft has done its homework and Nadella isn’t wrong when he says that Microsoft being third in the games market makes the case for this deal even more compelling. Secondly, Microsoft knows that if this deal is seen as anti-competitive, FTC will have to apply the same rules to the entire tech industry, which it’s unlikely to do. Only time will tell what’s going to happen in 2023.

In other news, Naughty Dog has confirmed that it has three projects in development, and Godfall studio Counterplay is working on a new IP.

[Source: Financial Times]

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