The Potential Impact of a Failed Xbox Activision Deal on Competition

The proposed acquisition of Activision Blizzard by Microsoft has been the talk of the gaming industry for a while now. However, there is always the possibility that the deal may fall through, and this raises the question of what would happen if that were to occur. In this article, we will explore the potential impact on competition if the Xbox Activision deal fails to go through.

Microsoft’s Plan to Build a Universal App Store

One of the primary reasons why Microsoft is interested in acquiring Activision is to gain a foothold in the mobile gaming industry. Like we have discussed earlier, Microsoft wants to strengthen its user base with its own store. With a universal app store, Microsoft hopes to challenge the dominance of Apple and Google in this space.

However, if the deal falls through, Microsoft’s plans for a universal app store could be delayed or potentially scrapped entirely. This would have an impact on competition law as it could reinforce the duopoly of Apple and Google in the mobile app space.

As mentioned above, the European Union lawmakers have adopted the Digital Markets Act, which requires Apple and Google to allow third-party app stores to compete on an equal footing. If Microsoft is unable to create a successful universal app store, the potential for competition in this market would be significantly reduced.

The Impact on Activision

Furthermore, the failure of the Xbox Activision deal could have implications for Activision Blizzard itself. While the company is successful and would likely continue to be so, being acquired by Microsoft would provide a level of stability that may be lacking without the deal.

Additionally, Microsoft is known for being more labor union-friendly than other big tech companies, which could be a positive for Activision Blizzard’s employees.

From a competition law perspective, the potential benefits of the deal would need to be weighed against any potential anti-competitive effects. While some may argue that the acquisition could lead to a consolidation of power in the gaming industry, others see it as an opportunity to create a more competitive environment in the mobile gaming space.

Conclusion

It is not uncommon for regulators to consider the pro-competitive benefits of a deal when making decisions. In this case, Microsoft’s plans for a universal app store could be seen as a positive for consumers, as it would provide an alternative to the current duopoly.

However, if the deal falls through, regulators may need to explore other ways to encourage competition in the mobile gaming market. The failure of the Xbox Activision deal could have implications for both Microsoft and Activision Blizzard, as well as the mobile gaming market as a whole.

The potential impact on competition law would depend on how the failure of the deal is handled and whether regulators see the benefits of the proposed acquisition as outweighing any potential anti-competitive effects. It will be interesting to see how this situation develops in the coming months and what impact it will have on the gaming industry.

Source: Destin