Chile approves Microsoft Activision Blizzard merger

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Microsoft has secured another approval for its proposed $68.7 billion acquisition of Activision Blizzard.

Last week, Chile's Fiscalía Nacional Económica – the National Economic Prosecutor's Office – cleared the merger following a phase one investigation of its potential impact.

In its statement, translated by Google, the FNE ruled out the possibility that the deal would "substantially reduce competition," based on the evidence it received, its analysis of the market, and the preferences of video game consumers in Chile.

The regulator believes that, should the merger be completed, there will still be plenty of competition in the video game space.

It also said Microsoft and Activision are unlikely to pull Call of Duty from other formats due to the competitive pressure from other publishers such as Electronic Arts, Ubisoft and Take-Two, as well as Microsoft's rivals Sony and Nintendo.

It also noted the relevance of Call of Duty in Latin American markets is "comparatively less than in other regions of the world."

The FNE said the "significant income" from PlayStation would discourage Microsoft from making Call of Duty exclusive

Finally, the FNE also considered it unlikely that consumers will change which console they own in order to continue accessing Call of Duty – something Sony has previously voiced concerns about. A survey of Chilean consumers suggested the number of people who would do so would be low.

The FNE added that the "significant income" generated by PlayStation versions of Call of Duty would also discourage Microsoft and Activision Blizzard from making it exclusive to the former's ecosystem.

In a statement issued to GamesIndustry.biz, Activision Blizzard said: "We are pleased that Chile’s Fiscalía Nacional Económica (FNE) has now approved our acquisition by Microsoft, joining regulators elsewhere that have already recognized the pro-competitive impacts of the deal.

"As we have said from the outset, a combined Microsoft-Activision Blizzard will enhance competition, drive innovation, and increase benefits for players, developers, and the global gaming community. As responsible regulators review the facts, we expect more approvals like the one from Chile.”

In addition to Chile, the merger has already won approval in Brazil and Saudi Arabia, but faces considerably more scrutiny in the US, UK and EU.

The Federal Trade Commission, the US regulator, has presented the biggest challenge so far, filing a lawsuit last month in an attempt to block the deal.

While the trial is set for August, Reuters reported that a pre-trial hearing will be held today (January 3, 2023).

The FTC's principal concern was over Microsoft gaining exclusive access to Call of Duty, as well as Activision Blizzard's other titles. Both the platform holder and publisher insist the deal will benefit both the industry and consumers, with Microsoft proposing a ten-year deal that guarantees Call of Duty would still release on PlayStation devices.

It also promised ten years of Call of Duty on Steam, as well as Nintendo's consoles.

In the wake of the FTC's lawsuits, we spoke to legal experts who told us Microsoft is likely to prevail in this year's trial.

Meanwhile, the European Commission and UK regulator the Competition and Markets Authority continue their own in-depth, phase two investigations.

The EU is currently surveying games companies about concerns over the proposed acquisition.

The public response to the CMA's enquiries showed that 75% of respondents were in favour of the deal going through. Around 20% of responses were excluded for abusive content, among other reasons.

You can follow the regulatory challenges Microsoft and Activision Blizzard face in our extensive primer.

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