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FNE clears acquisition of Activision Blizzard Inc. by Microsoft Corporation considering local assessment

29 / 12 / 2022

The FNE cleared in Phase 1 the acquisition of Activision Blizzard, Inc (“ABK“) by Microsoft Corporation (“Microsoft“), which was filed to the agency past July.

This acquisition will combine the activities of Microsoft – global provider of Xbox video game consoles, as well as developer and publisher of video games – with the activities of ABK – which is one of the world’s leading video game developers, thus generating horizontal and vertical overlaps.

Among other market data gathered during the investigation, the FNE executed a consumer’s survey to Chilean consumers of videogames, which supported the fact the merger would not raise either horizontal nor vertical concerns in Chile.

In its horizontal analysis, the FNE ruled out the transaction would raise competition concerns on the grounds of low combining market shares and due to the presence of an important number of competitors in the videogames market.

In its vertical assessment, the FNE firstly considered the possibility of Microsoft restricting the distribution of ABK content -mainly its most popular franchise, Call of Duty- from rival consoles, in particular PlayStation.  However, the FNE was able to conclude that, in Chile, other players such as Electronic Arts, Take Two, Ubisoft and Epic Games exert competitive discipline on ABK. In addition, Call of Duty was not found to be as relevant for the Latin American region, as it would be for the rest of the global regions.

The consumer survey showed that in the event that Call of Duty were not to be available on a player’s preferred console, they would switch to a different game rather than switching to a different gaming platform. This result, in consistency to other relevant data confirmed the FNE’s conclusion that an input foreclosure would not prevent Microsoft’s rivals from participating in the Chilean market.

The FNE also discarded the concerns that the market would ‘tip’ in favour of the merged entity, since local data showed that ABK’s video games were not found to be the most relevant for local consumers, being other players greatly preferred by Chilean consumers.

Finally, in relation to the concerns of customer foreclosure, the FNE was able to conclude that Microsoft does not have incentives to stop demanding video games published by third parties, mainly considering the great dynamism shown by the market in terms of new entry of relevant players.


The Parties

 Microsoft is a globally active company with activities in different technology segments. For the present analysis, it was important to consider that Microsoft: (i) develops, publishes and distributes video games for computers, consoles and mobile devices; (ii) markets the Xbox console, which includes different generations of that device that have been launched to date, and also engages in activities related to digital graphic advertising; (iii) offers subscription services to video game catalogues developed by itself and third parties, and cloud gaming; and (iv) develops and sells the Windows software and operating system.

Activision Blizzard is a developer and publisher of video games for computers, consoles and mobile devices through three business units, namely Activision Publishing, Inc., Blizzard Entertainment, Inc. and King Digital Entertainment. The main titles marketed by ABK include Call of Duty, as well as other games such as Crash Bandicoot, World of Warcraft and Candy Crush.